Standards of Review of the Host State’s Conduct in Investment Arbitration Law

In cases regarding investment, the first duty of an arbitrator is to consider whether the action by a State hosting property of a foreign investor, is in breach of its international agreement-based obligations or not. The duties of the host state are usually broad in wording which makes it difficult for arbitrators to investigate and settle such cases. In this line, the approach that is taken to assess a breach of state's obligation with regards to the protection of foreign investors to a great extent is similar with the methods employed in other legal cases. The aim of this article is to examine and analyze the effectiveness of such methods in order to test their applicability in international investment arbitration. Since the measures taken by host state are considered as the administration of its sovereignty against a foreign investor and the decision of the international investment arbitration, this article concludes that the legal regime for international investment arbitration calls for particular elements that brings about a distinct regulating regime as well as the application of special standards of review.