Iranian Bilateral Investment Treaties : Substantive Principles and Standards

There are over 3000 bilateral investment treaties in force which suggest that they have an important role in terms of promotion and attraction of foreign direct investment (FDI). This article expounds the substantive investment protection standards contained in Iranian BITs including admission, treatment standards, expropriation standards and dispute resolution procedures which are the common denominators in investment treaties. The underlying theme behind the Common Denominator Paradigm is development of an investment friendly regime, the core components of which are free admission, fair treatment, non-expopriation and access to international arbitration. This is in contrast to the "dominant theory" which is recognised by the proponents of the Perry-Kessaris Paradigm which articulates that a location with a "sound legal system" is attractive for FDI activities. The author makes the argument that a country without an ideal legal system may still be attractive for FDI activities if it has an investment friendly regime. International harmonisation of investment laws provides a solution to oil-rich countries with an underdeveloped legal system. Therefore, the common denominators are the building blocks for development of an "international sound legal system" for foreign direct investment