FORUM - An Introduction to Investment Treaty Law and Arbitration

Unlike trade in goods, where traders can stop trading at any time or redirect their sales, investment usually involves long term transfers of capital, potentially leading to long term benefits. Take building a power plant: an upfront investment is required, with the prospect of long term operation and profits running over many years, but it may take years before the initial investment has been paid off and the operator begins to turn a profit from the investment. Investment can be crucial in building and running basic infrastructure, for example, by setting down pipelines, generating energy, and arranging for proper waste disposal. During periods of aggressive privatization in the 1990s, many developing and middle income countries turned to foreign corporations to finance investments, including in public infrastructure. Sometimes foreign corporations expressed concern about investing because of the possibility of government mistreatment, such as host governments nationalising their assets without paying compensation, or discriminating against them either de jure or de facto.