INVESTOR-STATE DISPUTE SETTLEMENT AT A CROSSROADS

This article discusses that Investor-state dispute settlement (ISDS) allows foreign investors to sue host states before international arbitral tribunals, and it has become one of the most contested mechanisms in international economic law. Critics point to regulatory chill, inconsistent awards, a small and repeat-appointed pool of arbitrators, high costs and a structural asymmetry that gives rights to investors and obligations to states. This article argues that these familiar legitimacy problems are now being sharpened by a less visible actor: the third-party funder, who finances claims in exchange for a share of the award and whose identity and influence are often hidden from the respondent state and the tribunal.