Dispute resolution in investment treaties : balancing the rights of investors and host states

Bilateral and multilateral investment treaties permit investors to bypass the courts of their host States and have their investment disputes resolved through arbitration. Challenges e.g., by Phillip Morris to the Australian government plain packaging of cigarettes legislation, has caused a rethink of the appropriateness of arbitration as the means of resolving investor state disputes. New and better ways of balancing the rights of States to legislate in the public interest of their citizens on the one hand, and protecting investor property rights on the other are being sought out. This paper argues that the preferred way of achieving this needed balance is through the enactment of a general exception in the form of Article XX of GATT and Article XIV of GATS, which is incorporated into an international convention, and made applicable by incorporation to all bilateral and multilateral investment agreements.