Thank you very much.
I'll try to be concise.
First, I'll address the initial point you raised, which concerned the political context. As it happens, ISDS was expanded around the time the Berlin Wall fell. However, these treaties and the idea of joint arbitration largely preceded all that. For example, the ICSID Convention was adopted in the mid-1960s, when the European bilateral investment treaties were negotiated and signed starting in the late 1950s and in the 1960s and 1970s.
Why was ISDS not implemented? The first case dates back to 1990 and involved Sri Lanka. Then another case concerned Zaire, as it was called at the time, in 1997. Lastly, yet another case was brought against Canada in 1998.
As Mr. Fortier said, the fundamental feature of arbitration is the parties' consent to it. However, one of the characteristics of ISDS is the dissociation of consent. In short, the states give their consent in advance, whereas investors do so when they file a claim.
Until it was tested, it was unclear whether the technique was consistent with the ICSID Convention, for example. Ultimately, the successful resolution of two or three cases showed that it worked and that the state didn't need to grant authorization on a case-by-case basis. So arbitration took off.
More treaties followed. I'm not an economist, but I've read around the topic and studied the matter, and I believe this happened at a time when developing countries were tapping out and genuinely needed foreign capital. They completely changed their approach to foreign investment and began to promote bilateral investment treaties precisely so they could attract the investment they needed in order to develop. That was the economic reality of the time.
As for a return to politicization, I would have liked to discuss it, but my speaking time is limited. Is ISDS suited to all disputes? That's the question. Should certain disputes be resolved at the state level instead? That's a legitimate question. Beyond a certain amount of damages, doesn't a dispute become too big to be resolved that way? It's an open question.
Then there are cases in which decisions aren't enforced. As someone said, decisions are binding. However, if a state doesn't wish to offer compensation, it must have goods that can be seized. Politicization is therefore still possible. If the ISDS system doesn't work, the state of nationality comes back, reappears and may intervene.
Another way in which the process may be repoliticized is through intervention by the state of nationality, which is not a party to the dispute. It may intervene in two ways, either through arbitration proceedings, if it wishes to raise a point of law in treaty interpretation, for example, which regularly occurs. In some instances, it may agree with the state concerned by the claim against its own investor that, for example, “indirect expropriation” does not mean that in such a case. This is a form of repoliticization.
Or else the states may agree....