Investor State Arbitration in the era of economic nationalism

The rise of economic nationalism and the assertiveness of state sovereignty in global trade and investment regimes have been major factors in the dramatic change of the Investor-State Arbitration (ISA) environment in the past several years. In order to ensure that host nations comply to international investment agreements and bilateral investment treaties (BITs), ISA has traditionally acted as a tool to shield foreign investors from unjust treatment. A growing number of factors, including protectionist measures, reshoring efforts, and national economic interest prioritizing, have cast doubt on the impartiality, efficacy, and legality of ISA procedures. Focusing on the ways in which economic nationalism affects the creation, interpretation, and enforcement of investment treaties, this article investigates the changing dynamics between state autonomy and the protection of foreign investments. It uses important case studies and current arbitral rulings to show how investor rights conflict with public policy goals including social welfare, environmental preservation, and national security. It also evaluates changes that are now taking place inside organizations like UNCITRAL and ICSID, which aim to strike a balance between investor safeguards and more state oversight and openness. This study examines the relationship between domestic regulatory power, international arbitration, and political economy to determine if state-centered dispute mechanisms are going to replace investor-state dispute settlement (ISDS) or if ISDS can adjust to the new global order. Economic nationalism is reshaping investment arbitration, according to the results, which call for a new system that is more fair, open, and respectful of sovereignty in order to settle conflicts in the international investment ecosystem.