There was a massive proliferation of bilateral investment treaties in the 1990s. A World Bank study stated that in 1994 there were over 700 such treaties. By the end of the millennium, the figure had moved towards 2,000 treaties. It has now exceeded that mark. Many more are in the process of being negotiated. Obviously, states which participate in the making of these treaties consider them to be necessary for a variety of reasons. Their significance needs assessment. Despite the increase in the number of bilateral investment treaties, there is as yet no possibility of agreeing a multilateral agreement on investment. The reasons for this also need to be explored.

Introductory survey

In the 1980s, bilateral investment treaties were considered a rather recent phenomenon in the international investment scene. They seek to set out the rules according to which the investments made by the nationals of the two states parties in each other's territory will be protected. Writers are divided as to the effect of these treaties. Some writers believe that these treaties give ‘important support for those standards of customary international law which had seemed to be slipping away’. For such an assessment to be made, one must be convinced as to the existence of a customary international law in the field covered by bilateral investment treaties. It is doubtful whether there was much customary international law on the point. The existence of such customary international law is difficult to establish, as a large part of the world community of states objected to the creation of such customary law, particularly during the early decades of bilateral investment treaty practice.