Property sets out the ways in which society allocates, governs, and enforces rights and duties among persons with respect to resources. The boundaries of property are constantly changing. They influence and are influenced by social, economic, and political shifts. Nowadays, in view of ever-intensifying foreign investments and other cross-border ventures, the institution of property may face its greatest challenge ever: the transition from a largely domestic legal construct into one that accommodates globalization.
Bilateral investment treaties (BITs) appear to offer an ideal solution for the protection of foreign investors’ property rights in the broad range of assets that BITs typically consider to be “investments”: land, chattels, intellectual property, securities, intangibles, and so forth. BITs regularly include certain standards for the protection of foreign investments, such as “fair and equitable treatment,” and provide investors with standing in international law and direct claims vis-à-vis the host country. The alleged promise of BITs lies in reducing uncertainty and enhancing the credibility of states’ commitments to protect property rights.
“Explosion” is a term often used to describe the growth trend in the number of BITs. The numbers are staggering even to people familiar with the field; no fewer than 2,676 BITs had been concluded by the end of 2008, and virtually every country has been a party to at least one agreement of this type. If everybody has them, then one might think that BITs must be doing something quite beneficial. As we point out in this Article, however, BITs may do a lot, but their effect on securing cross-border property rights is far from clear.
Our main source of skepticism regarding the ability of BITs to systematically promote the protection of property rights beyond property law’s traditional boundaries lies in our argument that the notion of property is significantly more complex than first meets the eye. The gradual move to what we term “property discourse” to protect foreign investment under a BIT regime consequently may become complex and uncertain. This Article breaks ranks from conventional wisdom by identifying the intricacies of BIT property protection and pointing to heterogeneity as a central feature of property. Unlike the paradigm that seems to guide the creation of BITs, which emphasizes certainty and credibility, we argue that once property jurisprudence is introduced into BITs, the complex features of property law follow.
We demonstrate the ways in which property rights and duties regularly implicate numerous, often heterogeneous parties, whose interests may be tightly intertwined in the same piece of property. In addition, the public aspect of property rules—touching on expropriation and regulation—is not entirely detached from the private law of property. Consequently, a property regime, with its in rem traits and cross-field effects, may be difficult to sustain when a specific BIT or a tribunal applying it takes out one piece of the puzzle to resolve an isolated investor-state dispute. We thus argue that to properly meet their goals, cross-border investment mechanisms must come to terms with the entire array of jurisprudential dilemmas that characterize property systems.