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Abstract

This article argues that the legal analysis of international investment law and arbitration should focus not on treaties, rules or cases, but on certain conceptual positions on specific questions that act as 'micro-drivers' of the dynamics of the entire system. The main contention is that the very same investment law architecture may operate very differently as a result of such micro-drivers or, more specifically, of the accretion and alignment of a range of conceptual positions adopted by tribunals and, to a lesser extent, argued by counsel or in academic writings. Such conceptual positions arise in some relatively undefined yet critical areas in the topography of international investment law and arbitration (eg the definition of investment, the assessment of the legality of investments, reliance on the economic reality of an investment scheme, the connections between treaty and custom in investment regulation, among many others). Such conceptual variation with respect to relatively undetermined issues is an ordinary occurrence in any body of law. What is, however, noteworthy in international investment law and arbitration is the magnitude of the impact of such minor variations when some of them are aligned. To borrow the suggestive image of the so-called 'butterfly effect', it is not just the flapping of a butterfly's wings that is shaping the system, it is the fact that too many butterflies are flapping their wings in the same direction.

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