The variation of countries’ industrial policies and political strategies in a multipolar world brings the investor-state dispute settlement (ISDS) regime to a crossroad. Backlash to the inconsistency, non-transparency, partiality and unfairness of the ISDS regime results from the states’ changing interests and policy priorities, including the rising awareness of democracy. In pursuing the benefits of multilateralism, a multilateral investment court can serve as an alternative to the current investment arbitration regime. States need to clarify the scope of consent based on their political economic considerations. Substantial investment protection standards can be different, whereas the principle of proportionality can serve as an approach to the balance between investment protection and states’ policy arrangements. Meanwhile, there should be efforts to align the interpretation and application of key provisions, possibly through interpretation notes and an appellate body that reviews arbitral decisions, to generalise implicit consensus and to broaden collective acceptance of the regime.

I. Introduction
II. Legitimacy Crisis of the ISDS Regime
    A. Inconsistency of Arbitral Awards
    B. Selection of Arbitrators
    C. Transparency
III. Political Economy of the ISDS Regime
    A. States’ Interests in Foreign Investment
    B. Globalisation, Democracy and Sovereignty
IV. Rethinking the ISDS Reform Options
    A. Consent Base
    B. Towards Legitimate Consistency
V. Conclusion

• Shuping Li(Ph.D. candidate in law at the University of Hong Kong) Corresponding Author
• Wei Shen(KoGuan Distinguished Professor of Law at Shanghai Jiao Tong University Law School)