Symposium on International Investment Law & Contemporary Crises: Beyond Empire – lobal Economic Governance and Investor-State Dispute Settlement in the Banking and Finance Sector

[Güneş Ünüvar is a Senior Lecturer (Associate Professor) at the University of Exeter Law School (as of June 2026), and an Associate Fellow at the Academy of International Affairs Nordrhein-Westfalen in Bonn, Germany. He also serves as the Managing Editor of the Journal of World Investment & Trade (Brill) and as Legal Advisor to the Moon Village Association]

Introduction: The Report

In March 2025, the British Institute of International and Comparative Law (BIICL) published its Empirical Study on International Investment Law Protections in Global Banking and Finance (“BIICL Report” or the “Report”), the most comprehensive examination to date of investor–State dispute settlement (ISDS) in one of the most politically charged domains of global economic governance. The study analyses 149 publicly known investment disputes arising from:

“actions taken during and in response to financial crises, government interventions in financial institutions, and legislative changes affecting financial contracts”.

(p. 11)

It catalogues the nationality of claimants and respondents, the legal arguments advanced, and the outcomes reached by arbitral tribunals, juxtaposed with the type of financial investment in question (i.e. financial institutions or financial instruments).

While not explicit, the report is careful to delineate its purpose. It does not appear to take a normative position on the desirability of ISDS in the banking and finance sector. Instead, it seeks to provide an empirical basis for understanding how the system functions in practice, and how it interacts with broader processes of global financial governance. This framing reflects the report’s intention to describe rather than to reach a judgment, yet by doing so it inevitably reveals the system’s contours and invites others to reflect upon their implications.

Those contours are striking. According to the study, investors from the Netherlands, the United States, the United Kingdom, Austria, Switzerland, and France account for more than half of all known claims (p. 25), while the most frequent respondent States include Argentina (12 cases), India (8 cases), and Croatia (7 cases), alongside others such as Czechia, Venezuela, and Mexico (p. 22). The report also observes that “investor-State disputes in the banking and finance sector have not arisen uniformly over time but instead often occur in distinctive clusters, provoked by external events” (p. 13). These “external events” are typically, though not exclusively, governmental responses to impending or actual financial crises, such as the Argentine collapse of 2001–2002 or the global financial crisis of 2007–2008.

Even presented without any normative judgment, this empirical reality resonates with one of the most persistent critiques of ISDS: that it operates as a mechanism of neocolonial governance (see, for instance; here, here, and here). Across its many iterations, this critique holds that investment treaties and ISDS mechanisms enable capital-exporting states and financial actors, concentrated in the so-called ‘Global North’, to impose legal discipline on states struggling with crisis, as well as economic and social dislocation. Yet the report’s findings also reveal that this North–South duality is simplistic. Capital today is deeply transnational and increasingly polycentric; domestic politics often shape the regulatory responses that give rise to claims; and the system’s architecture, though historically “Northern,” is now sustained by a broader constellation of actors. This is also evident from the recent (though not yet dominant) increase in treaty claims against Global North states by Global South investors (p. 29). This complexity renders banking and finance disputes a uniquely revealing lens through which to examine the enduring and transforming coloniality of investment law, and of international law more broadly.

The Neocolonial Critique of ISDS

To understand why banking and finance disputes sharpen the critique of the “Empire,” one must trace their historical lineage. Colonial domination was as much about the governance of credit as it was about territorial control, particularly within the context of the so-called quasi-colonial relations. In the nineteenth and early twentieth centuries, imperial powers imposed debt commissions and fiscal oversight bodies on indebted states, from the Ottoman Public Debt Administration (Düyun-u Umumiye) to Egypt’s Caisse de la Dette Publique. These institutions subordinated domestic fiscal policy to foreign creditor interests, overseeing revenue collection and budgetary priorities in exchange for financial “stability.” In international economic law, most early debates around the use of force ultimately circled back to debt collection and the gunboat diplomacy employed by European empires to secure repayment.

The core of the neocolonial critique is that investment arbitration (including, but not limited to, the banking and finance sector claims) performs a structurally similar function today. It extends legal protection not merely to tangible assets or discrete investments but, more critically, to the fundamental instruments of a state’s economic sovereignty: decisions on sovereign debt restructuring, currency policy, emergency bank resolutions, and restrictions on capital flows. It renders macroeconomic decision-making itself a matter of legally enforceable investor rights. This does come with a caveat: the report finds that around 35% of decisions on the merits favoured states (p. 35), and arbitral tribunals did not shy away from scrutinizing the police powers of states (Annex D) and, on a number of occasions, refusing to “do away with [states’] right to regulate” (Invesmart v Czech Republic, para. 498). Notably, cases where the disputed measure was an ‘emergency intervention’, states appear to have prevailed (9 cases out of 14 examined), hinting at arbitral tribunals’ tendency to defer to states’ sovereign prerogatives.

Still, even if tribunals do not ignore sovereign prerogatives outright, the very fact that these macroeconomic decisions are open to arbitral scrutiny lies at the core of the systemic critique. It is this international justiciability of economic sovereignty that risks producing a regulatory chill, the proponents of this critique argue; deterring some states, especially those facing acute financial pressures, from taking timely and necessary action out of fear of investor claims. The consequences of adverse awards (still 65% at the merits phase), or even the initiation of arbitral proceedings, can be severe economically and politically. They can easily affect sovereign credit ratings, alter the dynamics of debt restructuring, and might shape access to future financing.

The Crises and the Human Cost

The ultimate, essential task is to distinguish between the respondent state as an institutional actor and the people it purports to represent: the communities, workers, and citizens who lack the means to insulate themselves from the consequences of financial crisis. In much of the discourse, states and their populations are treated as a single entity, positioned collectively against the foreign investor on a binary scale of interests, often simplified as “public” versus “private.” That moral geometry can be misleading. Host states are not always defenders of the common good forced into tragic choices; nor are foreign investors the sole agents of exploitation. Domestic authorities, too, can be complicit in perpetuating conditions of inequality or mismanagement that precipitate financial collapse.

These crises were not exogenous shocks alone. Domestic policy misjudgments are capable of compounding structural dependency. Host states are therefore not categorically blameless, even in cases where they may have prevailed against the claimant investors; yet, their agency operated within a constraining global framework. States are well capable of acting selfishly or shortsightedly, but the system that translates those actions into international legal responsibility remains anchored elsewhere. Recognising this complexity does not absolve the structural asymmetries that condition state behaviour but it rather clarifies that the fault lines of the systemic shortcomings run both vertically (between states) and horizontally (within them).

What pins ISDS back to reality is to acknowledge that the consequences extend beyond legal liability. Banking and finance disputes reverberate through societies, shaping the lived experiences of ordinary people. In Greece, the austerity measures that accompanied debt restructuring and drew investor claims coincided with deep cuts to pensions and public services. In Cyprus, the 2013 bail-ins that provoked arbitration erased the savings of thousands of depositors. In Argentina, policies designed to restore investor confidence deepened poverty and inequality. These human costs remain largely invisible in arbitral proceedings, which focus on legal arguments and financial valuation, oscillating on a two-dimensional plain between the claimant and the respondent. Their invisibility, however, is itself symptomatic of the system’s coloniality: a legal order finely attuned to the grievances of capital but largely indifferent to the suffering of populations.

Concluding Remarks

The Empirical Study on International Investment Law Protections in Global Banking and Finance, much like BIICL’s other empirical reports, is a mirror, and it reflects the evolving geography of global finance and the persistence of structural problems within it. What emerges is a portrait of an ostensible neutral system that runs the risk of reproducing the hierarchies of its historical inheritance. Banking and finance disputes are not marginal examples, as similar concerns cut across different sectors, including energy and mining. What sets them aside is that these disputes arise in moments of particular sovereign fragility and convert economic crisis into a field of transnational legal risk.

Yet the picture is not one of simple, one-sided domination, as host states are neither infallible nor uncorruptible. Still, the deeper architecture of the regime (the treaties, institutions, and enforcement mechanisms) remains overwhelmingly authored, hosted, and administered by developed economies. At its heart, still, this is as much a story about investment as it is about the people and societies that live with their consequences. When governments hesitate to act in a crisis, the law is no longer abstract, no matter how much arbitral proceedings may choose to disregard these monumental lived experiences. The challenge, then, is to imagine a system of global economic governance that protects investment without punishing vulnerability.