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Book Reviews471
Rudolf Dolzer and Christoph Schreuer .
Principles of International
Investment Law . New York : Oxford
University Press , 2008 . Pp. xliii, 433.
Hardback ₤ 60. Paperback ₤ 25. ISBN
9780199211760 .
International investment law is one of the
fastest-growing areas of international law
today. Only a decade ago, the current surge
in investor – state arbitrations, having cumu-
lated in approximately 300 investment treaty
disputes,
1 was beyond imagination. At the
same time, investment treaties enshrine prin-
ciples of international investment law, rather
than hard and fast rules. Almost unavoid-
ably, international investment law therefore
became coined more by the dispute settlement
activities of arbitral tribunals which enter-
tain claims between foreign investors and
host states brought under investment treaties
rather than by diplomatic exchange, inter-
governmental negotiation, and inter-state
treaty-making. Similarly, international invest-
ment law transpires and develops more in view
of arbitral precedent and case law than on the
basis of traditional textual approaches to treaty
interpretation. Nonetheless, applying invest-
ment treaties in practice as well as studying
and understanding the fi eld not only requires
knowledge about the jurisprudential develop-
ments but also demands awareness of the his-
toric, economic, and customary international
law context of foreign investment activities.
The present book, written by two of the
most eminent scholars in international
investment law with decades of experience
in practice and academia, does exactly this
in 10 clearly structured and concisely writ-
ten chapters. While focusing in its core on the
substantive principles of investment protec-
tion, the rights and obligations contained in
investment treaties, and the reading that arbi-
tral tribunals have given to them, it starts out
by embedding the discussion into a thorough,
yet concise, review of the larger economic,
historic, and political framework which is
necessary to gain a deeper understanding of
international investment law as a fi eld (at Ch.
1). It continues by analysing the specifi cities
of interpretation of investment treaties, men-
tioning in particular the strong infl uence of
precedent and the temporal aspects of applica-
tion of investment treaties (at Ch. 2). Subse-
quently, the threshold elements which open
the scope of application of investment treaties
are discussed, namely the notions of investor
and investment as they are applied by invest-
ment tribunals (at Ch. 3).
After an informative, but brief, diversion
on investment contracts (at Ch. 4), the book
delves into its main subject: the scope and
interpretation of the substantive principles of
international investment law. It fi rst touches
briefl y on the rules on admission and estab-
lishment which have, because of the usually
limited obligations states have assumed in
this context, not given rise to much case law
(at Ch. 5). Yet, the chapter’s section on the
requirement that investments have to com-
ply with the host state’s law in order to enjoy
protection is well developed. Chapter 6 then
focuses in depth on the provisions concern-
ing expropriation. The authors mention not
1 UNCTAD, Latest Developments in Investor –
State Dispute Settlement (2008) , available at:
www.unctad.org/en/docs/iteiia20083_en.pdf ,
at 1 – 2.
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472 EJIL 20 (2009), 447 – 485
only the right to expropriate and its restric-
tions; they equally discuss at length the more
diffi cult issue of determining the domain of
indirect expropriations, i.e. interferences with
a vested property right which do not directly
affect the title, but the value and use of prop-
erty. Chapter 7, in turn, addresses the other
substantive standards of treatment which
form part of the usual canon of investment
treaty protection and regularly appear in
investor – state arbitration. It includes, inter
alia , in-depth discussions of the standards
to provide fair and equitable treatment and
full protection and security, analyses the
scope and function of umbrella clauses and
clauses prohibiting arbitrary and discrimina-
tory treatment, and dissects the provisions
on non-discrimination contained in invest-
ment treaties, i.e. national treatment and
most-favoured-nation (MFN) treatment. The
same chapter also discusses the impact that
emergencies and a state of necessity have on
investment treaty obligations. This chapter
is complete, concise, and comprehensive and
conveys a clear and practical picture of how
investment treaties and the rights they grant
to investors are implemented in practice.
Subsequently, the book discusses the rela-
tively complex and not yet fully resolved issues
surrounding state responsibility and attribu-
tion, in particular as regards state entities
other than state organs (at Ch. 8), and gives
a brief introduction to political risk insurance
(at Ch. 10). Finally, the book contains a very
elaborate section on the dispute settlement
mechanisms under investment treaties with
a detailed discussion of investor – state arbi-
tration and the various issues which are of
interest in this context, such as the applica-
tion of MFN clauses to questions of procedure
and jurisdiction, the review and annulment of
arbitral awards, or the relationship between
domestic courts and tribunals (at Ch. 10). This
section is written so that it gives both an intro-
duction to those not familiar with investment
arbitration and valuable overview of current
and contentious issues regarding investment
treaty arbitration to the more experienced
reader. At the very end, the book presents
an extensive annex which contains the most
important legal texts in the fi eld of interna-
tional investment law, including the ICSID
Convention, the Energy Charter Treaty, the
NAFTA, and the model bilateral investment
treaties (BITs) of China, France, Germany, the
UK, and the US. These annexes not only make
the practical work in investment treaty arbi-
tration easier, they also allow a comparison of
those model BITs which are most infl uential
and illustrate the different emphases states
put in their investment treaty practice.
The principal approach the book takes
is to view most of the questions it addresses
through the practice of arbitral tribunals
and the way they have concretized the often
vague standards of international invest-
ment law without losing sight of the historic
development. Thus, it often introduces the
fate certain treaty provisions had on their
way to becoming part of the standard arsenal
of investment treaties and accounts for dif-
ferences in the treaty practice of states as
regards, for instance, rules on admission and
establishment or fair and equitable treat-
ment. Furthermore, the book also gives an
accurate and objective account of differences,
divergences, and confl ict in investment juris-
prudence, for example with regard to the
almost notorious topic of umbrella clauses.
Commentary on which side of two coins in
investment jurisprudence is preferable and
why is, however, rather rare. Instead, the
authors remain in the tradition of an objec-
tive treatise which attempts to describe,
order, structure, and classify rather than
develop an independent theory of interna-
tional investment law.
While the authors manage to describe the
rather voluminous investment jurisprudence
in an accurate and concise fashion, the inevi-
table pitfall of such an approach is the constant
need for both readers and authors to keep up
to date with newly appearing arbitral awards.
While the fast-moving pace of investment law
leaves little alternative, summarizing ana-
lyses at the end of each section in an attempt
to provide a Rechtsdogmatik of international
investment law would have been helpful, in
particular to non-expert readers and students.
Similarly, further references to the growing
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Book Reviews473
and more specifi c literature would have been
welcome. These aspects should, however, not
detract from the great value this book brings,
not only as an introduction to students, but
also as a valuable tool for researchers and
practitioners. In any event, the way invest-
ment jurisprudence has developed so far,
going back and relying on the foundational
cases, which are without fail discussed in
Dolzer/Schreuer, suggests that even without
constant updates this book will provide a last-
ing account for anybody interested in inter-
national investment law. At the price of £25
for the paperback edition, this book is bound
to become the primary teaching material for
international investment law in law schools
around the world.
Stephan W. Schill , Dr. Jur.
International Arbitration Law Clerk to The Hon.
Charles N. Brower, Arbitrator, 20 Essex Street
Chambers, London
Email: schill@nyu.edu
doi: 10.1093/ejil/chp019
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