Sacrificing Judicial Sovereignty for Credibility: An Examination of International Arbitral Awards and Dispute Settlement Provisions under Bilateral Investment Treaties in Developing Countries

Over the years, international arbitration has gained global recognition as the preferred means of resolving investors-state disputes (ISDs)1. Bilateral Investment Treaties (BITs) contain provisions promoting international arbitration of ISDs under the pretext that they serve as an investment incentive to entice foreign investors. Although research efforts have advanced our knowledge on the international arbitration of ISDs, there has been surprisingly no investigation of the impacts of international arbitration of ISDs on the judicial sovereignty of developing host states. This paper sets out to investigate the impacts of international arbitration of ISDs as promoted by BITs on the judicial sovereignty of developing host states. We assume that ISDs settlement provisions under BITs operate to deprive developing host states of their judicial sovereignty over disputes between foreign investors and host States. A doctrinal analysis of primary data in the form of arbitral awards and BITs' provision on the international arbitration of ISD with particular focus on BITs to which Cameroon is a party; and secondary data reveals that the international arbitration of investor-state disputes which BITs promote, is gradually depriving host states' judicial institutions of their rights to resolve investment disputes involving foreign investors. Finally, the article recommends some possible ways through which this loss of judicial sovereignty can be prevented.

Keywords: Bilateral Investment Treaties, Investor-State Disputes Settlement Provisions, Developing Host States, Judicial Sovereignty, International Arbitration.