Historically, foreign enterprises wronged by a government in whose territory they invested had to seek redress in the domestic law and courts of that host state. If that yielded no justice, the investor could appeal only to its own government to seek relief on its behalf. Such an exercise of "diplomatic protection" was purely a matter of realpolitik, dependent on the political will and power of one sovereign government to exert economic pressure on another to protect the private interests of one of its nationals. After the Second World War, the drive towards a rules-based system of international relations, as well as the decolonisation of Africa and Asia, led to the development of modern international investment law. Many developing countries were anxious to attract capital from foreign investors, who, in turn, wished to secure their investments from political and judicial unpredictability. These governments thus consented to be bound by a set of international standards for the trea...

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