Sovereign wealth funds and bilateral investment treaties’ new models: Issues, new trends and State practice

Sovereign wealth funds (SWFs) are not new players in financial markets. Recently, however, they have come under increased scrutiny because of their increasing number, their collective wealth, and the growth of their investment activities in developed-country economies. This chapter explores the application of the current regime of international investment law to SWFs, focusing on bilateral investment treaties (BITs) concluded by the States that represent the home jurisdiction for the world’s 15 largest SWFs. There are five sections to this chapter. Following the introduction, Section 2 provides a brief overview of the international investment law regime, including its core disciplines. Section 3 considers treaty practice with respect to the entrance provisions of a BIT that may be used by an SWF to gain access to its substantive protections. Section 4 considers treaty practice regarding the relevant exit provisions of a BIT that permit host States to derogate from their treaty obligations and Section 5 provides concluding remarks.