Comparison of Diplomatic Protection for Alien Property and Investment Arbitration

Abstract

Almost forty years after Barcelona Traction, the ICJ again dealt with shareholders’ rights under international law in the context of diplomatic protection. In recent years there is a significant increase of the number of the investment treaty. Investors tend to bring international investment arbitration against host states to settle the disputes between them. People will concern about whether the role of the diplomatic protection has already faded or outmoded. However, under the situation where treaty regimes do not exist or have been proved inoperative, diplomatic protection as the last resort still plays an important role in protecting investment. Diplomatic protection and investment treaty arbitration are two legal mechanisms which have their own distinct legal characteristics. This accordingly leads to the fact that when courts and tribunals seek to achieve a result that is in accordance with justice through the application of these legal mechanisms, different results and consequences will arise although the facts of the case remain the same. Both of them cannot replace each other.