Investor State Dispute Settlement and Pakistan: Balancing Sovereignty, Investment Protection, and UNCITRAL Reform
Abstract
Investor state dispute settlement has put Pakistan at the forefront of elaborate and often expensive international arbitrations involving foreign investors against state actions, pursuant to bilateral and multilateral investment treaties. High profile cases like Reko Diq and Karkey have generated billions of dollars in awards and settlement obligations which have led locals, politicians, and commentators to question their country's sovereignty, regulatory autonomy and the legitimacy of the ISDs system. Meanwhile, Pakistan has need of its own to invest in infrastructure and boost economy growth, and investors have expectations of effective legal safeguards, such as arbitration. This article locates the experience of Pakistan in the wider context of the ongoing reform efforts in the UNCITRAL Working Group III, examines how the state has historically engaged with treaty regimes in Pakistan, and seeks answers to the question of whether a ‘mediation-first arbitration-last' model may be able to balance sovereign policy space with effective investment protection. It ends with a group of policy suggestions and priority areas for further empirical and doctrinal research.
Keywords: Investor state dispute settlement, ISDS, Pakistan, UNCITRAL Working Group III, Reko Diq, sovereignty, investment protection, mediation
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