Abstract
One of the most controversial debates in international investment law concerns the extent to which investment disputes should be internationalized or localized, that is to say, the extent to which international law or local (domestic) law should be applied to decide a dispute. An additional issue is the extent to which international law prevails over domestic law in the investment law context. The ICSID Convention represents a unique entry point into this dispute given that it explicitly regulates the law applicable in ICSID arbitrations through Article 42. In order to determine the role of international and local law under Article 42 of the ICSID convention, this article adopts a quasi-originalist approach focusing on the intention and understanding of the drafters as its lodestone and looking at the travaux preparatoires of the Convention, as well as other contemporaneous or near-contemporaneous sources in order to establish this. It also notes that the oft-overlooked doctrines of the New International Economic Order are an important part of the context of the ICSID Convention and failure to realize this has led to significant misinterpretation of the Convention. It finds that the dominant view of discarding host State law under Article 42 in favor of international law was neither intended by the drafters of the ICSID Convention nor was it their understanding of it. Instead, it finds that the drafters intended, and understood the ICSID Convention to require, the default application of host state law as part of a complex and nuanced interpretative process which would usually result in an outcome that respected both international and host State law.