he present Article addresses three distinct issues that are central to the critique of investment treaties and arbitration. First, it discusses the virtues of granting investors an independent right to initiate dispute settlement directly against the host state instead of forcing them to rely either on dispute resolution in domestic courts or on interstate dispute resolution. Second, this Article shows how investment-treaty arbitration takes into account private and public interests in deciding whether state conduct has violated the rights granted to investors under investment treaties. It thus argues that concepts related to investors' rights, such as fair and equitable treatment or the concept of indirect expropriation, do not establish rights that unilaterally favor investors over states. Third, this Article addresses the relatively recent critique of whether arbitration, as compared to a permanent court with tenured judges, vitiates the legitimacy of international investment law. It explains the institutional choice in favor of arbitration, analyzes the independence and impartiality of arbitrators and shows which control mechanisms preclude the arbitral mechanism from becoming a source of pro-investor bias. Finally, the Article concludes by pointing to strategies by which the present system of investment-treaty arbitration can, and increasingly does, accommodate the legitimate concerns of nonparties to the proceedings. Such strategies, it is argued, do not require a radical redesign of the entire system, but can be integrated into the existing system of international investment law and arbitration. In sum, this Article argues that investment treaties and investor-state arbitration constitute a legitimate vehicle for structuring and stabilizing foreign investment activities.