Progressive Reform of African States’ Investor-State Dispute Settlement policy: A Proposal for a Pan-African Investment Court

This chapter provides a framework to rebalancing the socio-economic and investment regulatory relationship between African States and investors in international investment law, through the proposal for a hybrid pan-African Investment Court, and provision of a prototype structure for the Court, as the adjudicatory mechanism in Investor-State Dispute Settlement (ISDS). This is motivated by the legitimacy crisis of ISDS, a notion that the system is incompatible with democratic values, and therefore, at variance with the United Nations Sustainable Development Goals 2030, and African Union Agenda 2065. This proposal is significant because of the need to remedy the socio-economic challenges of African States through the restoration of rights of States to regulate for sustainable development. African States have recently created an architecture for regulating foreign investment through the African Continental Free Trade Area Agreement (AfCFTA), and its Draft Protocol on Investment, which has given the momentum for the fundamental reform of ISDS, in order to preserve and safeguard national interests in line with the United Nations Sustainable Development Goals.

Findings on the ‘African experience’ in ISDS through the study of Egypt, Tanzania, and South Africa, are the motivations behind the recommendation for an Investment Court System (ICS). The outcomes shows that ISDS has transformed from a tool for socio-economic development, to instead limit the legitimate exercise of democratic powers by African States to regulate in national interest, and therefore, hinder the development of policy initiatives for sustainable development. This finding supports the conclusion that investor-State arbitration is no longer fit for purpose in driving the economic objectives of African States. The viability of this proposal was conducted through the evaluation of existing Court Systems such as the International Court of Justice and Arab Investment Court, which outcomes were adapted to create a prototype Investment Court System for Africa. It is predicted that this proposal will help to resolve the legitimacy crisis of ISDS, through balanced investment protection and restoration of rights of States to regulate for sustainable development.