LL4E7      Half Unit
International Investment Law and Arbitration

This information is for the 2023/24 session.

Teacher responsible

Oliver Hailes


This course is available on the LLM (extended part-time), LLM (full-time) and University of Pennsylvania Law School LLM Visiting Students. This course is available with permission as an outside option to students on other programmes where regulations permit.

Students with no previous background in public international law may find it helpful to consider consulting a standard textbook such as M. Evans (ed.), International Law (OUP, 5th ed., 2018) or J. Crawford, Brownlie’s Principles of Public International Law (OUP, 9th ed., 2019).

This course has a limited number of places and demand is typically high. This may mean that you’re not able to get a place on this course.

Course content

Investment treaties are instruments of economic governance at the centre of policy debates and the practice of international arbitration. After the Second World War, many States agreed to minimum standards of conduct towards foreign investors to promote capital inflows. Today, the standards contained in nearly 3,000 bilateral treaties (or chapters in trade agreements) serve to delimit a State’s rights in the economic domain from its responsibility to make reparation for losses suffered by investors, usually in the form of compensation. These treaties typically include each State’s consent to arbitration on the notice of any protected investor, known as investment treaty arbitration or investor-State dispute settlement (ISDS). With around 1,500 cases, investment treaty arbitration has become an important vehicle for the evolution of public international law. At the same time, diverse voices have protested the alleged chilling effect of large compensation awards on public interest regulation, not least amid the renewable energy transition.   

This course evaluates the many roles played by investment treaties and their arbitration in protecting foreign investment, shaping public policy, supporting economic development, and influencing international law. We begin by highlighting some of the historical, political and economic forces that drove newly independent States to adopt treaties that combined standards of sovereign conduct with a standing offer for private individuals to access arbitration. Next, we discuss the application of treaties by tribunals, focusing on the scope of their jurisdiction and the interpretation of standards such as fair and equitable treatment and compensation for expropriation. Then we examine the defence arguments of host States, techniques of arbitral deference towards policy judgements, and the enforceable remedies available to successful claimants. Finally, we consider the arguments for and against ISDS, reform proposals for substantive treaties and arbitral procedure, and future options for the settlement of foreign investment disputes.


This course is delivered through weekly two hour seminars totaling a minimum of 20 hours in the Autumn Term. Students will have two additional hours in the Spring Term. This course includes a Reading Week in Week 6 of Autumn Term.

Formative coursework

One 2,000 word formative essay during the course.

Indicative reading

Reading lists will be provided for each seminar on Moodle. Essential readings combine primary source materials along with  secondary materials to help students navigate the topics. The course will assign political economy and history readings to supplement select topics.  Where possible, readings will include relevant videos and podcasts to enhance student learning.

Indicative textbooks include: C.L. Lim, et al., International Investment Law and Arbitration (2021); J. Bonnitcha et al., The Political Economy of the Investment Treaty Regime (2017); M. Sornarajah, The International Law on Foreign Investment (2021); C. McLachlan, et al., International Investment Arbitration: Substantive Principles (2017).


Exam (100%, duration: 2 hours, reading time: 15 minutes) in the spring exam period.

Key facts

Department: Law School

Total students 2022/23: 20

Average class size 2022/23: 20

Controlled access 2022/23: Yes

Value: Half Unit

Guidelines for interpreting course guide information

Course selection videos

Some departments have produced short videos to introduce their courses. Please refer to the course selection videos index page for further information.

Personal development skills

  • Communication
  • Specialist skills