Reconciling Investment Protection with the Right to Regulate? - Investor Obligations as a Means of Rebalancing the Investment Treaty Regime
(2026) JURM02 20261Department of Law
Faculty of Law
- Abstract
- International investment law has traditionally been structured around the protection of foreign investors and investments. Through investment treaties, investors are granted substantive rights and procedural standing to bring claims
against host states, while obligations are imposed primarily on states. This
structure has contributed to concerns that investment law may restrict states’
ability to regulate in the public interest, particularly in areas such as public
health, environmental protection and human rights. Against this background,
this thesis examines whether investor obligations can function as a mechanism for reconciling investment protection with states’ right to regulate in the
public interest.
The thesis applies a... (More) - International investment law has traditionally been structured around the protection of foreign investors and investments. Through investment treaties, investors are granted substantive rights and procedural standing to bring claims
against host states, while obligations are imposed primarily on states. This
structure has contributed to concerns that investment law may restrict states’
ability to regulate in the public interest, particularly in areas such as public
health, environmental protection and human rights. Against this background,
this thesis examines whether investor obligations can function as a mechanism for reconciling investment protection with states’ right to regulate in the
public interest.
The thesis applies a doctrinal legal method, combined with conceptual analysis and reform-oriented evaluation. It first examines how the tension between investment protection and the right to regulate is conceptualised within
international investment law. It then analyses selected arbitral awards in
which investor obligations and counterclaims have been addressed, focusing
on how such obligations have been recognised and applied in practice. Finally, it examines ongoing reform efforts, especially the work of UNCITRAL
Working Group III on counterclaims.
The thesis finds that investor obligations constitute a viable mechanism for
reconciliation, but only to a limited and conditional extent. Their main significance lies in their ability to bring investor conduct into the same legal framework as investor rights and state regulatory authority. In arbitral practice, investor obligations have been most effective where they are grounded in an
express treaty provision or in domestic law capable of being applied by the
tribunal. Counterclaims are particularly important because they provide a procedural avenue through which respondent states may invoke investor misconduct within the same proceedings as the investor’s claim.
At the same time, investor obligations are not yet a settled or general feature
of international investment law. Their effectiveness depends on a sufficiently
clear legal basis, consent, jurisdictional and admissibility requirements, and
procedural mechanisms capable of giving them practical effect. The reform
efforts examined in the thesis confirm this cautious development. UNCITRAL Draft Provision 10 may strengthen the procedural possibility of
counterclaims, but it does not itself create substantive investor obligations.
The thesis therefore concludes that investor obligations should be understood
as a meaningful but limited reform tool. They do not limit the protective function of investment treaties, nor do they remove the constraints that investment
law places on states. However, by allowing investor conduct, public-interest
regulation and investment protection to be assessed together, they may contribute to a more balanced investment treaty regime. (Less)
Please use this url to cite or link to this publication:
https://lup.lub.lu.se/student-papers/record/9227616
- author
- Ekström, Arvid LU
- supervisor
- organization
- course
- JURM02 20261
- year
- 2026
- type
- H3 - Professional qualifications (4 Years - )
- subject
- keywords
- International Investment Law, International Economic Law, The Right to Regulate, Public Interests, Investor Obligations, Counterclaims
- language
- English
- id
- 9227616
- date added to LUP
- 2026-06-15 09:27:10
- date last changed
- 2026-06-15 09:27:10
@misc{9227616,
abstract = {{International investment law has traditionally been structured around the protection of foreign investors and investments. Through investment treaties, investors are granted substantive rights and procedural standing to bring claims
against host states, while obligations are imposed primarily on states. This
structure has contributed to concerns that investment law may restrict states’
ability to regulate in the public interest, particularly in areas such as public
health, environmental protection and human rights. Against this background,
this thesis examines whether investor obligations can function as a mechanism for reconciling investment protection with states’ right to regulate in the
public interest.
The thesis applies a doctrinal legal method, combined with conceptual analysis and reform-oriented evaluation. It first examines how the tension between investment protection and the right to regulate is conceptualised within
international investment law. It then analyses selected arbitral awards in
which investor obligations and counterclaims have been addressed, focusing
on how such obligations have been recognised and applied in practice. Finally, it examines ongoing reform efforts, especially the work of UNCITRAL
Working Group III on counterclaims.
The thesis finds that investor obligations constitute a viable mechanism for
reconciliation, but only to a limited and conditional extent. Their main significance lies in their ability to bring investor conduct into the same legal framework as investor rights and state regulatory authority. In arbitral practice, investor obligations have been most effective where they are grounded in an
express treaty provision or in domestic law capable of being applied by the
tribunal. Counterclaims are particularly important because they provide a procedural avenue through which respondent states may invoke investor misconduct within the same proceedings as the investor’s claim.
At the same time, investor obligations are not yet a settled or general feature
of international investment law. Their effectiveness depends on a sufficiently
clear legal basis, consent, jurisdictional and admissibility requirements, and
procedural mechanisms capable of giving them practical effect. The reform
efforts examined in the thesis confirm this cautious development. UNCITRAL Draft Provision 10 may strengthen the procedural possibility of
counterclaims, but it does not itself create substantive investor obligations.
The thesis therefore concludes that investor obligations should be understood
as a meaningful but limited reform tool. They do not limit the protective function of investment treaties, nor do they remove the constraints that investment
law places on states. However, by allowing investor conduct, public-interest
regulation and investment protection to be assessed together, they may contribute to a more balanced investment treaty regime.}},
author = {{Ekström, Arvid}},
language = {{eng}},
note = {{Student Paper}},
title = {{Reconciling Investment Protection with the Right to Regulate? - Investor Obligations as a Means of Rebalancing the Investment Treaty Regime}},
year = {{2026}},
}