The current system of investor state dispute
settlement (ISDS) in investment agreements
emerged in the 1960s.
Before, investment was
mainly protected through „diplomatic
protection“, i.e. Investors’ home countries
helped to settle disputes (the disadvantage
being that private investors’ problems could
turn into diplomatic frictions). 15
ISDS as part of investment agreements allows
investors to directly bring disputes against host
Investment agreements typically refer
to different sets of arbitration rules, e.g. ICSID
(World Bank) or UNICTRAL (UN) to enforce
obligations contained in BITs.