Once BITten, twice shy?: The uncertain future of ‘shared sovereignty’ in investment treaty arbitration

Over the past half-century, but particularly in the last two decades, states have signed a considerable number of bilateral investment treaties (BITs), as well as a smaller number of bilateral and regional free trade agreements containing provisions on investment protection. These agreements are primarily enforced through an arbitration process known as investor–state dispute settlement. As a result, in nearly every country in the world some sovereign authority has been transferred from the national/public sphere (local courts) to the international/private sphere (investment treaty arbitration). In this article it is argued that although states agreed to ‘share’ some of their sovereignty with arbitrators, they did not intend to cede the degree of authority that these private actors would eventually claim to possess. Many states are now taking efforts to rein in arbitrators, with states that have been ‘BITten’ in arbitration leading the charge.