Investment treaty arbitration has been savaged for posing a threat to regulatory authority of host states. In this atmosphere, this paper examines the nature of the regulatory concerns that opponents of investment treaty arbitration have raised against investment treaty arbitration. Assuming that the regulatory concerns are derived from uncertainty and unpredictability lying at the heart of the current investment treaty arbitration regime, this paper discusses the pertinence and utility of carve-out clauses to alleviate the regulatory concerns in light of legal certainty and predictability. The carve-out clauses in regard to sensitive matters are expected to function as effective instruments to address the regulatory concerns in terms of legal certainty, predictability and political acceptability.
Asian International Arbitration Journal