Minimising the International Investment Tribunal’s expansive treaty interpretation : Is ‘renegotiation’ of investment treaties a better strategy for host developing countries?

In the investor-state dispute settlement (ISDS) system, international arbitration tribunals interpret investment treaties in ways that more often than not undermine the competing interests of investment importing developing countries. In a bid to overcome such interpretations, some host countries have resorted to stark options: terminating their bilateral investment treaties (BITS), denouncing International Investment Agreements (IIAs), and withdrawing from the international investment arbitration system - a trend set to continue. They are also in search of an alternate route that can shield them from invasive arbitral awards. This article seeks to find a better alternative. It undertakes a cost-benefit analysis of the termination of BITs and withdrawal from IIAs and ISDS from host developing countries' perspectives, particularly in the context of Bangladesh's experience in ISDS. It also examines the continuing effects on Bolivia despite its denouncement of and withdrawal from the International Centre for the Settlement of Investment Disputes (ICSID). Upon a strategic analysis of the available options, this article argues that the renegotiation of BIT provisions susceptible to expansive arbitral interpretations appears to be a better option than other stark options to ameliorate the adverse consequences that both Bangladesh and Bolivia experienced as host developing countries. Renegotiated treaties will go a long way in limiting arbitrators' wide discretionary power of interpretation and keeping host developing countries within the regulatory regime of international investment law.