International Investment Law and Dispute Resolution
Summary
International investment law establishes the legal framework governing the treatment of cross-border capital flows and the protection of foreign investors. It comprises a network of bilateral and multilateral treaties, domestic statutes and customary international law principles that grant substantive rights—such as fair and equitable treatment, protection from expropriation and free transfer of funds—while preserving host states’ right to regulate in the public interest. Dispute resolution under this regime predominantly takes place through investor–state arbitration, utilising institutional rules such as those of the International Centre for Settlement of Investment Disputes (ICSID) or the United Nations Commission on International Trade Law (UNCITRAL). Arbitral tribunals determine whether a state has breached treaty obligations and, if so, award compensation. Alongside arbitration, foreign investors may resort to domestic courts in host states, and states themselves may settle claims through diplomatic channels or negotiation. The architecture of dispute resolution reflects a delicate balance between guaranteeing legal certainty for investors and safeguarding regulatory autonomy for states, with contemporary debates focusing on ethical concerns, transparency, sustainable development clauses and the integration of human rights obligations into investment agreements.
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International Investment Law and Dispute Resolution publication trend
The graph below shows the total number of articles in international investment law and dispute resolution across all publications each year (not limited to Nature Index journals).
Technical terms
Bilateral Investment Treaty (BIT): A treaty between two states providing reciprocal guarantees and protections for foreign investors.
Investor–State Dispute Settlement (ISDS): A mechanism enabling investors to initiate arbitration against host states for alleged breaches of investment treaties.
ICSID: The International Centre for Settlement of Investment Disputes, an autonomous World Bank institution administering investment arbitration.
Double Hatting: The practice whereby a single individual serves simultaneously as arbitrator, counsel or expert within the same or related cases.
Substantive Obligation: A clause in an investment agreement that imposes a specific legal duty on the host state towards the investor (for example, fair and equitable treatment).
Police Powers Doctrine: A principle allowing states to enact regulations for public welfare (health, safety or morals) without liability under investment treaties.
References
- The Revolving Door in International Investment Arbitration. Journal of International Economic Law (2017).
- Global pandemics and moratorium of investment claims: A perspective from Indonesia. Cogent Business & Management (2023).
- Dispute by Design? Legalization, Backlash, and the Drafting of Investment Agreements. International Studies Quarterly (2020).
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