Workshop on International Law, Natural Resources and Sustainable
Development
Natural Resource Disputes and ICSID Arbitration: What Role for the Public Interest?
Claire Buggenhoudt
Faculty of Law, University of Antwerp
In the last decades, trans-border investment has steadily increased. This increase in foreign
investment has led to a significant rise in disputes between foreign private investors and
host States, especially in the area of natural resource exploitation. What is more, foreign
investors increasingly bring these disputes to international arbitration mechanisms. By
opting for international arbitration between the State and the private party, rather than
domestic judicial mechanisms, investment treaties aim to counterbalance the legislative
power that the host State has over foreign investors. Despite its promises of impartiality and
independence this type of arbitration is, however, often criticised because it seems to
constrain the State’s power to protect public interest values such as environmental
protection. The reasoning underlying this critique is the arbitrators’ strong reliance on legal
principles developed in the context of commercial dispute settlement. The use of
commercial dispute settlement techniques allegedly keeps the arbitrators from considering
the wider interests of society in their decisions. In this paper, the decisions concerning
natural resource exploitation of the International Centre for Settlement of Investment
Disputes (ICSID) will serve as a case study to examine the role of public interest concerns in
international investment arbitration. It will study both the procedural and the substantial
principles applied in the ICSID decisions to determine how public interest concerns can be
given due consideration in the context of international investment law.