Exhaustion of Local Remedies in International Investment Law

This advisory bulletin from the IISD Best Practices Series examines the exhaustion of local remedies (ELR) requirement in international investment law, analyzing its customary origins, its general waiver in investment treaties, and the recent trend of states reintroducing mandatory local recourse to empower domestic legal systems.

• The customary international law rule of exhaustion of local remedies (ELR) is designed to protect state sovereignty by requiring individuals to attempt to find redress within a state's own domestic legal system before starting international proceedings.
• In international investment law, the ELR rule has been largely ignored because states often provide advance consent to international arbitration in treaties, and arbitral tribunals have typically allowed investors to bypass local courts even when treaties do not explicitly waive the requirement.
• There is a recent trend where some states are reintroducing mandatory requirements to pursue or exhaust local remedies in investment treaties to prevent the bypassing of domestic legal systems and to empower them.

APA

Brauch,, M. D. B. D. (2017). Exhaustion of Local Remedies in International Investment Law. International Institute for Sustainable Development. https://www.iisd.org/publications/guide/iisd-best-practices-series-exhaustion-local-remedies-international-investment

Chicago

Brauch,, Martin Dietrich Brauch,Martin Dietrich. Exhaustion of Local Remedies in International Investment Law. International Institute for Sustainable Development, 2017. https://www.iisd.org/publications/guide/iisd-best-practices-series-exhaustion-local-remedies-international-investment.

Wikipedia

{{cite report |last1=Brauch, |first1=Martin Dietrich Brauch,Martin Dietrich |title=Exhaustion of Local Remedies in International Investment Law |publisher=International Institute for Sustainable Development |date=31 January 2017 |url=https://www.iisd.org/publications/guide/iisd-best-practices-series-exhaustion-local-remedies-international-investment |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{brauch2017exhaustion, author = {Brauch,, Martin Dietrich Brauch,Martin Dietrich}, title = {{Exhaustion of Local Remedies in International Investment Law}}, institution = {International Institute for Sustainable Development}, year = {2017}, month = jan, url = {https://www.iisd.org/publications/guide/iisd-best-practices-series-exhaustion-local-remedies-international-investment}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }