International Investment Arbitration: Development, Controversies, and Future Outlook

Abstract

Globalization is a prominent feature of modern society. However, a by-product of increased transnational business activities, especially foreign investments, is an increased number of disputes. Consequently, investment arbitration has, in recent decades, experienced rapid development and much attention as an effective means of dispute resolution and investment promotion. The first section of this paper describes the origin and development of international investment arbitration with a specific focus on the International Center for Settlement of Investment Disputes (ICSID). Although international investment law and ICSID arbitration both play significant roles in dispute resolution, scholars often criticize them for their legitimacy deficits. In the second section, the current issues and challenges facing international investment law and ICSID arbitration are presented and discussed. These include the inconsistency of investment treaties and agreements, potential arbitrator bias, and conflicts between an investor’s private rights and the host state’s public interests. To meet the changing needs of both investors and the public, the field of international investment arbitration must continue to progress and evolve. The third and final section addresses the ongoing evolution of international investment arbitration by reviewing possible remedies and improvements to the current system and presenting future trends anticipated by institutions and scholars.