Evolving Standards of Investment Protection – Reflections Following the Forty-Fourth ITF Public Conference

Introduction and Background

On 10 October 2025, the Forty-Fourth ITF Public Conference on 'Evolving Standards of Investment Protection: Recent Developments and New Trends' ('Conference') took place at the British Institute of International and Comparative Law ('BIICL'). The conference provided a comprehensive analysis of the latest developments in international investment law and investment protection standards. The conference speakers, comprising academics as well as practitioners, reviewed recent cases and new treaties and discussed significant developments and trends that impact investment protection. This blog post reflects on the discussions at the Conference and highlights five key issues and trends in international investment law and protection.

Trends in Investment Arbitration Cases

According to UNCTAD's latest update, the number of publicly known investor-State dispute settlement ('ISDS') cases reached 1,401 as of 31 December 2024. The pool of respondents now spans 135 States (and one regional economic organisation - the European Union) as of that date.

Historically, some States have been disproportionately exposed to ISDS cases. For example, the most frequent respondents included - Argentina (65 cases), Egypt (48 cases), Spain (58 cases) and Venezuela (65 cases). This highlights a pattern of repeated claims against particular jurisdictions.

In terms of investor origin, developed country claimants dominate. For instance, investors from the United States (234 cases), the Netherlands (135 cases) and the United Kingdom (120 cases) have filed the largest share of known investment arbitrations over the past decades.

This data points to a steady reliance on investment arbitration as a tool of investment protection, the concentration of claims against certain States, and the dominance of a relatively small group of home States for claimants. This background underscores the relevance of evolving standards of investment protection and how States and investors alike are navigating the ISDS landscape.

For completeness, given claims that ISDS is an especially investor-friendly dispute settlement process that results in a tendency for investors to win claims, it should be noted that UNCTAD's records do not provide strong or unequivocal support for this assertion. In fact, as of 31 December 2024, UNCTAD reports the following about treaty-based ISDS cases: 28.7% of cases were decided in favour of the investor; 38% of cases were decided in favour of the State; 17.3% of cases were settled; 13.5% of cases were discontinued; and 2.5% of cases were decided in favour of neither party (meaning that liability was found, but no damages were awarded). Whilst, as discussed further below, there are valid arguments that investment protection and ISDS require reform, the outcome of treaty-based ISDS cases have been decided so far does not squarely support the assertion that investors are more likely than not to win such cases.

Investment Protection under Current Investment Treaties

Despite the evolution of individual investment protection standards over the past two decades, the overall level of treaty protection remains largely unchanged from that provided in the early days of bilateral investment treaties. States have responded to the surge in investment arbitrations by refining treaty language, clarifying standards of protection such as fair and equitable treatment ('FET'), or issuing interpretive guidance, rather than fundamentally altering the substance of protections. While arbitral tribunals have oscillated between expansive and more restrained interpretations of standards like FET, these variations have not shifted the system's overall equilibrium.

Many older treaties, which remain in force or continue to apply through sunset clauses even post-termination, retain the traditional framework of investment protection, reflecting earlier drafting approaches that provide extensive protections without fully accounting for contemporary regulatory and policy considerations. Moreover, many newly negotiated investment treaties with more balanced provisions have yet to enter into force. As a result, the practical level of protection and exposure under international investment law today remains in line with that of the formative period of ISDS.

New Generation of Investment Treaties

While the existing network of investment treaties largely reflects traditional formulations, significant reform is evident in newer agreements that are expected to eventually transform the ISDS landscape. Although many of these modern treaties are not yet in force, they introduce more balanced approaches to investment protection and State sovereignty, including by incorporating explicit references to the right to regulate, environmental protection, labour standards and Sustainable Development Goals as guiding principles.

For instance, the EU-Canada Comprehensive Economic and Trade Agreement (CETA) narrows the FET standard, and strengthens the right to regulate for legitimate public policy objectives. Another example of a 'new generation treaty' is the EU-Vietnam Investment Protection Agreement (EVIPA). This also strengthens the States' right to regulate for legitimate public policy objectives, such as protecting public health, safety and the environment. The treaty also tackles the issue of treaty shopping (i.e. situations where companies incorporate a shell or mailbox company in a treaty Party solely to gain access to investment protection) by linking investment protection obligations to 'substantive business operations' in the definition of 'juridical person of a Party'. This implies that entities with only minimal presence in the host State may not benefit from investment protection.

Taken together, such 'new generation treaties' mark a deliberate shift toward modernising investment protection, aligning it more closely with sustainable development and public interest concerns, even though their practical effects are yet to materialise.

ISDS Holds States Accountable

Despite its flaws, the ISDS system remains one of the few mechanisms in public international law that provides an effective means of holding States accountable for breaches of their international obligations. Unlike many other areas of international law, ISDS offers investors direct access to neutral adjudication and binding decisions enforceable under the ICSID Convention  and the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards.

ISDS has developed a significant body of jurisprudence that clarifies States' obligations towards foreign investors, and encourages greater transparency, due process and regulatory predictability. While legitimate concerns exist about the consistency of ISDS decisions and outcomes, the cost of such cases and the alleged regulatory chill effect of investment protection, the response to these challenges should be reform, not abandonment. Discarding ISDS would risk removing one of the only functioning accountability frameworks that bridge private and public international law. The challenge, therefore, lies in refining the ISDS system to balance investment protection with States' right to regulate, rather than dismantling a structure that, at its core, has proven to work.

International Investment Law in the Wider System of International Law

The Conference reflected broad agreement that international investment law forms an integral part of the wider system of public international law, and must be interpreted in accordance with the Vienna Convention on the Law of Treaties ('VCLT'). Article 31 of the VCLT provides that treaties shall be interpreted in good faith, in the light of their object and purpose, and with due regard to 'any relevant rules of international law applicable in the relations between the parties'. This principle reinforces that investment treaties do not exist in a legal vacuum, but interact with other branches of international law, including international environmental law and international human rights law.

The International Court of Justice's 2025 Advisory Opinion on States' Climate Change Obligations affirmed this approach by stating that 'when several rules bear on a single issue, they should, to the extent possible, be interpreted so as to give rise to a single set of compatible obligations' (para 165). In this vein, in her Declaration, Judge Sarah Cleveland emphasised that international investment law should be interpreted consistently with other international norms (paras 21-22). This underscores a growing recognition that the future of international investment law lies in its coherence with the broader fabric of international legal obligations.

Conclusion

Although the Conference was convened to examine the evolving standards of investment protection, a recurring and unifying theme across the discussions was the reform of the ISDS system itself. The evolution of substantive protections, such as FET and expropriation, cannot be meaningfully separated from the procedural framework through which they are enforced.

Calls to tighten or clarify these standards have, in turn, driven reform of the ISDS system, as States seek to recalibrate the balance between investor protection and regulatory autonomy. The debates surrounding 'new generation treaties' and the right to regulate all point to an ongoing transformation of investment law and the ISDS framework. The future of investment law thus lies not in dismantling the ISDS system, but in reforming it to ensure legitimacy, accountability and coherence with broader international norms and sustainable development objectives.

Author:

Helin Laufer is a PhD in Law Candidate at the University of Cambridge. She is a former Editor-in-Chief of the Cambridge International Law Journal (CILJ), and is currently acting as a Consultant Editor for the CILJ.

This post has been cross-posted from the Cambridge International Law Journal (CILJ) Blog