I had a recent twitter exchange that baffled me at first, but eventually clarified something in the ISDS debate that I have come across before and found confusing.
Sometimes ISDS critics, including me, will say something along these lines: "Disputes between foreign investors and host governments can usually be handled in domestic courts." What I mean by this, and what I think others mean, is that many countries have domestic laws that offer something similar to some of the substantive protections in investment treaties, and foreign investors can rely on those domestic laws and bring a complaint in domestic court. For example, many countries have a domestic counterpart to international protections against expropriation without compensation, and also have due process-type standards that mirror the minimum standard of treatment. These laws could provide the basis for a domestic complaint.
From what I gathered in that twitter exchange, however, some ISDS supporters are interpreting "disputes could be handled in domestic courts" to mean that critics want to take out the procedural step of ISDS, but leave the substantive investment treaty protections in place and have them litigated in domestic court. In other words, the supporters think the critics are advocating domestic complaints based on treaty obligations such as expropriation, or minimum standard of treatment, or NT/MFN. The response of ISDS supporters to this perceived argument is that international law in domestic courts doesn't work that way in most legal systems, and you could not effectively litigate treaties in domestic court in this way.
(Maybe that's not what ISDS supporters are saying, but that's how I interpreted my twitter exchange).
With that in mind, let me just clarify. I am not suggesting, and I've never heard any ISDS critic suggest, that we should leave current investment treaty protections in place and litigate them in domestic courts instead of litigating them through ISDS. Rather, my view is that we should remove the substantive protections relating to expropriation (direct and indirect) and the minimum standard of treatment from investment treaties entirely, and rely on the domestic law equivalents to handle these kinds of issues (if some countries do not have such laws, an arbitration clause in the investment contract is a good alternative, although it would be even better if the domestic legal system added those protections). As for non-discrimination obligations such as NT and MFN, we can leave them in place in the treaties, but litigate them under state-state dispute settlement through the treaty itself (not in domestic courts).
That may or may not clarify things for others, but I think it helped me understand this particular issue better (assuming I understood that twitter exchange).
