THE CHALLENGES OF INVESTMENT ARBITRATION: SUCCESS OR FAILURE? A COMPARATIVE ANALYSIS OF INVESTMENT ARBITRATION IN NORTH MACEDONIA AND KOSOVO

Abstract

Background: In today's modern business and technological landscape, businesses are increasingly inclined to seek alternative methods for resolving disputes rather than rely solely on traditional court procedures. Businesses are also increasingly aware of the significance of resolving conflicts through alternative means and taking proactive measures to avoid litigation. In recent decades, investment arbitration has gained widespread acceptance and has emerged as a preferred mechanism for resolving disputes involving international investors in Western Balkan countries. Some countries demonstrate a favourable inclination towards employing arbitration as a dispute resolution mechanism by enacting legislation that grants investors the right to initiate arbitration proceedings against the state in case of failure. This scientific research objective will be achieved through the reflection of the legislative framework in the matter of investment arbitration as well as the reflection of the flow of foreign investments, analysing and not limited to the treatment of concrete cases of arbitration disputes. Through this approach, we will answer the central question of how much arbitration as an alternative dispute resolution mechanism is a stimulating factor for attracting foreign direct investment or whether multinational companies only use the legislative and incentive favours offered by the Republic of Kosovo and North Macedonia. Methods: The article was conceived based on a modern methodological framework. Within the general methodological framework of scientific research, logical methods play a crucial role in the scientific processing of the research data, drawing conclusions and determining facts through which the truth of the thesis of the work is reached scientifically. In the context of this paper, the method of analysis through which the impact of arbitration as an alternative dispute resolution mechanism in relation to the flow of investments will be analysed is noteworthy. Additionally, methods of abstraction and concretisation will also be used. Abstraction is the basis of analysis, which sometimes represents the separation of parts from the whole subject. Moreover, the comparative method will highlight the diverse normative solutions in national legislation and international legal sources. Results and conclusions: In the article, the authors propose considering the effectiveness of existing provisions and determining whether adjustments or alternative approaches are needed to maximise the benefits of foreign investment while minimising potential risks and uncertainties associated with dispute resolution processes.