Investment Law Research Articles

Investment Law’s Alibis: Colonialism, Imperialism, Debt and Development, written by David Schneiderman

Investment Law’s Alibis: Colonialism, Imperialism, Debt and Development, written by David Schneiderman

Resolving Disputes in International investment through Arbitration

This paper brings forth an extensive analysis of the role of arbitration in resolving disputes in international investment, providing a comparative study of the existing frameworks and emerging alternatives. As cross-border investments continue to grow, disputes between foreign investors and host states have become increasingly common. International arbitration has emerged as the preferred method for resolving such conflicts due to its neutrality, enforceability, and flexibility. The paper explores the key legal instruments governing international investment arbitration, including Bilateral Investment Treaties (BITs), Free Trade Agreements (FTAs), and multilateral agreements like the Energy Charter Treaty. It also examines the two most widely used procedural frameworks: the International Centre for Settlement of Investment Disputes (ICSID) and the United Nations Commission on International Trade Law (UNCITRAL), comparing their distinct approaches to arbitration. While arbitration has proven effective, it faces growing criticisms, including high costs, lengthy proceedings, and concerns about transparency and arbitrator impartiality. The research also highlights regional initiatives, particularly in Latin America and China, which reflect diverse approaches to investment dispute resolution. By comparing these frameworks and emerging trends, the paper sheds light on the strengths, weaknesses, and future direction of international investment arbitration, emphasizing the need for a more transparent, equitable, and accessible system to balance the interests of investors and host states. The analysis concludes by assessing the potential impact of these reforms on the future of international investment law.

Contractual Forms of Investment in the Legislation and Practice of the Russian Federation

Introduction: the paper deals with the analysis of contractual forms of investment activity. The research attention is paid to various theories related to the legal nature of an investment agreement, the issues of divergence of existing definitions of an investment agreement as a legal category. Special attention is paid to the structure of the investment agreement, as well as its place in the system of civil contracts. It is argued that the correct qualification of the investment agreement plays a key role in ensuring high quality and rational legal regulation of the relevant relations. In the process of researching the investment agreement, the author differentiates by types and parties. The details of contractual obligations are given, taking into account investment schemes and depending on the types of investment projects. The purpose of the paper is to study the agreement regulating the relations of subjects of investment activity, the legal nature of the investment agreement, its qualifying features, types and parties. Methods: to achieve this goal, a systematic approach was used, as well as the general scientific (analysis, synthesis, formal logical, comparative, and temporal) and specific scientific (formal legal, comparative law) research methods. Results: the international practice of concluding and applying investment contracts (agreements) widely used to attract investments is studied. The interpretations of the investment agreement presented in the domestic and foreign specialized literature are compared. The place of the investment agreement in the system of civil contracts is determined. The approaches to the legal qualification of the investment agreement are studied. It is established that differentiation by types and parties of the investment agreement plays an important role in the development of the economy and business. Understanding the specifics of each type of agreement and the role of parties allows you to effectively organize the investment process and achieve your goals. The author analyzes various forms of investment, including the purchase of a business, participation in investment partnerships, investments in securities, as well as collective investments through joint-stock and mutual funds, concession agreements, and production sharing agreements. Conclusions: the conclusion is substantiated that it is advisable to establish the legal nature of each investment agreement in the process of its execution. The legal relations created by such an agreement are subject to the general principles of civil law and specialized standards of investment law. It is established that for the correct qualification of a specific contractual structure used in the investment sphere, it is advisable to rely on the positions formed in law enforcement practice on such an issue. It is proved that the investment agreement implies any agreements in which the investor participates. These agreements may include various types of civil contracts regulated by the Civil Code of the Russian Federation. Highlighting the main features that distinguish investing from other economic and business processes, the author argues that the best position would be the transfer of personal capital and the transfer of values (investments) to another party in order to make a profit in a certain period without a guarantee of success.

The Identification and Regulation of Expropriation in International Investment Law

This essay focuses on the concept of expropriation within the framework of international investment law. Expropriation has evolved from direct state appropriation of foreign investors’ property to indirect expropriation, a more covert measure without the transfer of ownership. This essay distinguishes between direct and indirect expropriation, explores the meaning of expropriation through key cases, and evaluates the challenges tribunals face in legal practices. Finally, this essay examines the role of fair and equitable treatment (FET) standards and compensation mechanisms. With an effective regulation of expropriation, the author believes that a balance between state sovereignty and investor protection can be achieved.

Constitucionalismo transformador y derecho internacional de inversionesTransformative constitutionalism and international investment law

Abstract International investment law faces five core legitimacy challenges: the state-dependency challenge, the human and constitutional rights challenge, the equality challenge, the standard of protection challenge, and the investor state dispute settlement system challenge. This article endorses the claim that constitutional courts can contribute to the solution of those legitimacy challenges when they exercise the power to review the constitutionality of international investment treaties. From a transformative perspective, constitutional courts of host states can: (i) create public deliberation and raise awareness concerning the legitimacy challenges of international investment law; (ii) grant equal treatment to national and foreign investors; (iii) require governments to negotiate less open-textured provisions in international investment treaties; (iv) safeguard the protection of human and constitutional rights, and other common goods; and (v) raise due process, predictability, transparency, and proportionality standards concerning the investor state dispute settlement system. These judicial undertakings can strengthen the bargaining power of host executive branch authorities in the negotiation of international investment treaties and can narrow down the space of discretion of international investment arbitral tribunals. Both outcomes could render international investment treatises’ creation and enforcement more legitimate.

Protection Against Arbitrary or Discriminatory Measures in International Investment Law

Protection against arbitrary or discriminatory measures is a clause for the protection of foreign investments that is included in international investment agreements. The clause imposes an obligation on the state where the investment is made not to harm foreign investments by arbitrary or discriminatory measures. Although it is sometimes overshadowed by other investment protection standards in international investment arbitration, it is actually an independent standard that is frequently regulated in investment agreements. In this article, firstly, the drafting of the protection against arbitrary or discriminatory measures in international investment agreements, its elements and its historical development are discussed. After that, the meaning and scope of the concepts of "arbitrariness" and "discrimination", which are two elements, were examined.

Evaluating Whether Indonesia Should Maintain or Revise Its Local Incorporation Requirement for Foreign Investors

The article reviews the locally incorporated company requirement for foreign investors in Indonesia. It uses a normative juridical method, focusing on examining positive law through a statute approach. It involves analyzing relevant laws, regulations, cases, and literature and includes interviews with law scholars and an official from Indonesia’s Investment Coordinating Board to gather expert opinions. The data obtained is analyzed using qualitative techniques. It discusses the advantages and disadvantages of the requirement in international foreign investment law and Indonesia concluding that its advantages outweigh the disadvantages, and some of the disadvantages have been resolved. Hence, the article argues that the requirement remains appropriate for Indonesia and should be maintained. However, certain investment treaties have weakened the requirement as a defense against legal action by locally incorporated companies in international arbitration. To overcome this problem, the country should renegotiate its bilateral investment treaties (BITs) that give the companies direct legal action rights and develop new BITs that contain balanced rights between foreign investors and Indonesia. Additionally, the locally incorporated company requirement should be reinforced by Indonesia’s negative list policy, prioritizing specific sectors for local investors.

China and Shanghai Cooperation Organization: Reconsideration and Improvement of Multilateralizing Effect of Most Favored Nation Clause in BIT

Since the Maffezini case, debates upon the application of the Most-Favored-Nation (MFN) clause have never stopped. Research from the perspective of the Shanghai Cooperation Organization (SCO) can test the way for further advancement of this issue. The analysis on the international investment arbitration cases involving the SCO states may shed some light on the crucial point on dispute. At present, the bilateral investment treaties (BIT) between China and other states of the SCO are in an urgent need of renewal in order to meet the interests of deepening investment cooperation. Problems of fragmentation of the interpretation method and of unpredictability of the interpretation conclusion of the MFN clauses manifested in international investment disputes involving SCO states will provide concrete preventative suggestions on the updating of the wording of MFN clauses. Under SCO framework, the multilateral effect of the MFN clause can play a model role for other regional integration organizations to build an integrated and multilateral investment treatment system in the fragmented and bilateralism-based framework of international investment law, and in fact promote investment facilitation for regional organizations.

Municipalities at the crossroads: Deciphering the nexus between municipal insolvencies and international investment mandates

AbstractNavigating the convergence of domestic governance and international investment law presents multifaceted challenges in an ever‐globalizing world. The recent bankruptcy of the Birmingham City Council in September 2023, burdened by substantial debt from equal pay claims, serves as a poignant example, illustrating the potential widespread effects of local financial crises on international investment protections and obligations. The discourse explores the complexities arising from municipal insolvencies and the implications of such local fiscal policies on international investment obligations. The lens of international arbitral tribunals sheds light on the dilemmas faced when local realities vie with global responsibilities, especially concerning investor protections and Bilateral Investment Treaties. Decentralized states add another layer of intricacy, balancing regional policies with overarching international commitments. As the landscape of international investment law transforms, both state entities and investors must understand and adapt to the evolving interplay. The synthesis of these two realms is crucial in today's globalized era. Through proactive policy‐making, stakeholder dialogues, and a keen understanding of both local and global dynamics, a harmonious fusion of domestic objectives and international obligations can be achieved.

New Challenges in Corporate Governance for Mainland Companies: Addressing Adjustments in the Articles of Association in Response to the New Company Law and Foreign Investment Law

New Challenges in Corporate Governance for Mainland Companies: Addressing Adjustments in the Articles of Association in Response to the New Company Law and Foreign Investment Law

Evolution of Australia's Foreign Investment Review and Its Impact on Government Investors

Through a number of legislative reforms, most notably the Foreign Acquisitions and Takeovers Act of 1975 and its ensuing revisions, Australia's foreign investment policy has changed. The goal of the approach is to preserve national security while luring in international investment. The Foreign Investment Review Board (FIRB), which assesses foreign investments using a "national interest test," is a crucial component of this structure. With an emphasis on Chinese investments, this article investigates how these policies have affected state-owned businesses in particular. It examines potential changes to Australia's foreign investment laws in the future and draws attention to the difficulties presented by the FIRB review procedure.

INVESTMENT POLICY OF KAZAKHSTAN IN THE CONTEXT OF ESG PRINCIPLES

This article examines the role of ESG principles in international investment law and their increasing importance for the formation of investment policy in Kazakhstan. Attention is drawn to some progress in the implementation of ESG principles, however, this policy is multidirectional, and there are a number of tax and socio-economic disadvantages. The author draws attention to the specific advantages of introducing these principles into investment policy: increasing investment attractiveness, access to new sources of capital, etc. Using the example of a number of large investment proceedings, the importance of these principles is emphasized, and attention is also drawn to the features and complex nature of legal proceedings in this category of investment disputes. The article also notes potentially high reputational risks in international investment proceedings. In this context, ESG principles should be considered as a tool to reduce these types of country risks. The author relies on an article by candidate of legal sciences, associate professor Zh. Kulzhabaeva, which outlines the economic significance of the criteria of feasibility and efficiency. Drawing attention to the significance of the proposed concept, the author proposes to take into account the principles of ESG. This combination will give the investment policy a certain balance and sustainability in the long term. In the final part, the author draws attention to the versatility of the ESG concept and the need to pay attention to a number of issues that have a decisive influence on the degree of implementation of ESG principles and, accordingly, on the sustainability of the state’s investment climate

PROTECTION OF FOREIGN INVESTMENT IN INDIA: A HISTORICAL ANALYSIS

International investment agreements are the tools of international law by which two or more countries give reciprocal assurance for the protection of foreign investment in their countries. Long before there was no such regime of international property protection. In colonial time the foreign property was subject of the law of foreigner. At that time there was no certainty in international property regime. India had paid heavy price for the same. This paper tries to map out the whole journey of development of international property protection in India. In the first part paper tries to find out the international rule for the protection of foreign property in India. Unfortunately there was no such universal regime prevalent in any part of the world for the protection of foreign property. Second part deals with the development of International property protection in in post-colonial period. In this period newly independent colonies did not trust the foreigners due to its chequered history. Third part deals with the period after liberalization, privatisation and globalisation. In this period India had embraced the international investment law regime as an overall strategy of liberalization, privatisation and globalisation. In this period India had signed most of its International investment agreements. However, in this period India also faced with multiple investment claims by many foreign investors. In wake of these investment claims India had recently spelled out its new Model BIT and terminated its most of the International investment agreements. And finally concludes that there is some problem with the new Model BIT due to which Indian government still facing difficulty in inking new international investment agreements with the countries with whom India has had deep economic ties.

Assessing the Impact of Foreign Direct Investment on Vietnam's Socioeconomic Development and Proposing Policy Recommendations

In recent years, Vietnam has emerged as one of the world's top 20 destinations for foreign direct investment (FDI). Since reforming its Foreign Investment Law in 1987 and joining the World Trade Organization (WTO) in 2007, the country has implemented numerous tax and investment procedure reforms. This influx of FDI has significantly boosted Vietnam's economic growth, job creation, and social welfare. However, challenges persist—complex legal procedures and weak links between FDI and domestic businesses have been ongoing issues for four decades. Moreover, new global economic trends such as the global minimum tax, sustainable development, digital transformation, and the shift towards a circular economy demand timely and appropriate government reforms. These reforms are crucial for developing suitable foreign investment policies and effective FDI attraction strategies. This article aims to examine Vietnam's current FDI landscape, assess its socio-economic impact in recent years, and propose recommendations for a more selective and effective FDI strategy moving forward.

The Tendencies of Cryptocurrency Policies in Indonesia

Cryptocurrency has set intriguing and innovative trends in investment amidst the fluctuating global economy following government policies. This research aims to investigate the trends of policies of cryptocurrency in Indonesia, seen from the perspective of taxation and investment laws. Low tax charged in Indonesia is seen as relaxation by investors and cryptocurrency users, while the trends in legal policies concerning investment are experiencing hyper regulations in legislative products set to assure investors, in comparison to those of other countries. These trends attract some attention from investors and cryptocurrency users from abroad. This research is a unique offering that will illustrate which countries are suitable and friendly for businesspeople to carry out crypto business activities. The methodology used in this study is normative research with a conceptual approach and comparative law. The research results are expected to shed light on foreign investors wishing to invest their money in cryptocurrency businesses by considering the low tax from the perspective of current taxation law in Indonesia compared to those in Canada, the United States, and Singapore. According to the details of taxation in Canada, the United States, and Singapore, it is obvious that Indonesia gives ease to foreign cryptocurrency investors in Indonesia from the aspect of taxation law. The countries compared seem to charge very high taxes for cryptocurrency users and businesses in investment cryptocurrency. This comparison gives easier access to foreign investors to invest their assets for the development of cryptocurrency businesses and companies in Indonesia by considering the amounts of taxes imposed on cryptocurrency businesses and users. Indonesia makes it easier for foreign cryptocurrency investors in Indonesia compared to Canada, the United States, and Singapore from a tax law perspective. In terms of investment regulations, Indonesia has broader laws and regulations compared to other countries, where the investment process involving cryptocurrency businesses in Indonesia receives sufficient attention from these laws and regulations.KEYWORDS: Cryptocurrency, Investment Law, Taxation Law.

THE POLITICAL ENVIRONMENT AND ITS ROLE IN ATTRACTING FOREIGN INVESTMENT TO IRAQ

This study aims to assess the impact of political stability on foreign direct investment in Iraq. After 2003, the Iraqi government sought to attract foreign investment to address the growing disparity between available resources and increasing financial needs. The goal was to bridge the national resource gap, reduce the balance of payments deficit, and finance public investment to aid in the countrys reconstruction and industrial advancement. To achieve this, Investment Law No. 13 of 2003 was enacted, accompanied by various policies, procedures, guarantees, incentives, and benefits to encourage foreign direct investment in Iraq and support economic development. However, despite these efforts, the inflow of investments did not meet expectations due to persistent political and security instability. This instability led to weak global rankings and deterred both foreign and local investments from Iraq between 2013 and 2022.

Bilateral investment treaties and investors’ social accountability: the law and praxis in South Asia

PurposeInternational investment law governs matters related to transnational investments. The extensive reach of transnational corporations (TNCs) has granted them substantial economic, political and social influence, often intertwining them with public interest issues and implications in human rights violations. This paper aims to explore the profound influence exerted by TNCs in today’s globalized world and its implications for human rights and social responsibility within the framework of international investment law. Particularly, it acknowledges the vulnerability of economically weak South Asian states and cites past instances such as the Bhopal gas tragedy in India and the Rana Plaza disaster in Bangladesh as egregious violations of human rights. Focusing on South Asian bilateral investment treaties (BITs), this paper aims to examine the scope of investors’ social accountability.Design/methodology/approachThis research engages with doctrinal and analytical methods in traversing through primary and secondary sources. It would parse the arbitral tribunals’ jurisprudence for their discussion on the inclusion of social accountability obligations within international investment agreements (IIAs). Further, it engages in a quantitative analysis related to the nature of the social accountability-related obligation of the corporation within South Asian BITs.FindingsThe findings reveal a glaring absence of the law on investors’ social accountability and the need for enhanced regulatory mechanisms to address the escalating influence of TNCs on human and social rights. The absence of a robust legal framework, coupled with the asymmetric nature of international investment law, granting investors greater rights and leverage compared to states, exacerbates this challenge. The phenomenon of “regulatory chill” inhibits states from effectively enforcing regulatory measures aimed at protecting human rights and the environment. Furthermore, the broad interpretation of clauses such as “fair and equitable treatment” by investment tribunals often undermines states’ ability to implement measures in the public interest. While international organizations such as the UNCTAD and the UNCITRAL Working Group III are actively discussing reforms to IIAs, the existing guidelines addressing investors’ social accountability are woefully lacking in the content as well as the method of their integration with international human rights law. The findings underscore the imperative for South Asian nations, the subject of this research’s empirical analysis, to adopt a comprehensive approach involving both domestic law reforms to promote corporate social accountability and active pursuit of negotiations for the inclusion of binding social obligations for investors within IIAs.Practical ImplicationsThis research, drawing upon international law developments, offers suggestions for incorporation of social accountability provisions via relevant domestic law reform. The research could be viewed as a prelude for mapping the legal developments in the area of investors’ social accountability within investment agreements, as well as investment contracts, drawing guidance from international law instruments.Originality/ValueTo the best of the authors’ knowledge, no other study analysed the scope of investors’ social accountability in South Asian BITs.

China's Foreign Investment Law and TRIMs Agreement: Conflicts, Amendments, and Applications

This article explores the developmental trajectory of China's Foreign Investment Law and its consistency issues with the WTO TRIMs Agreement. Covering four developmental stages from 1979 to 2020, it provides a detailed account of the evolution and amendments of China's legal framework on foreign investment. The article identifies inconsistencies in national treatment, elimination of quantitative restrictions, and transparency principles, analyzing adjustments and revisions made across these stages to align with international trade environments and WTO requirements. Despite significant progress, the article highlights areas for further improvement, such as the implementation of national treatment principles and resolution of transparency issues.

Corruption and foreign investments: Empirical lessons from treaties and arbitration cases

Abstract As legally binding instruments for the protection of cross-border investments, international investment agreements (IIAs) increasingly include anti-corruption provisions. This article empirically analyzes international investment agreements and the practice of investor–state tribunals related to corruption in foreign investments. It introduces a typology of treaty provisions and discusses their limited practical effectiveness and perverse incentives they create. The article also addresses the broader question of how to deal with corruption-related obligations of investors and states in the context of public international law. It presents and analyzes new empirical data showing that parties to investor–state disputes increasingly allege corruption, and states are responsible for most of such allegations. However, in most cases, tribunals either ignore such allegations or decide that they have not been proven. In the small number of cases where tribunals found allegations proven, they declined jurisdiction or declared the investor’s claim inadmissible. The article makes proposals on how international investment law can become more effective in tackling the supply and demand side of corruption and discusses the relevant obligations of investment tribunals.

Globalization and financial development contributions toward economic growth in Sudan

The main objective of this study is to evaluate how globalization and financial development contributed to Sudan’s economic growth using data from 1978 to 2021 by applying the autoregressive distributed lag (ARDL) model. Furthermore, a model to calculate total factor productivity and the contributions of the underlying variables is being developed. The findings from ARDL indicate that globalization and capital display positive and beneficial impacts on Sudan’s economic growth in the long run, implying that an increase of one percentage point in Sudan’s globalization index will, over time, boost economic growth by 1.50408 % and 0.156301 %. Government spending as a control variable was found to influence economic growth positively. Financial development shows a detrimental effect on growth in Sudan. The average productivity growth rate is negative, regardless of the positive contributions of globalization and financial development. This outcome suggests that globalization and capital have been gainful to Sudan’s economy. Therefore, this study advocates that capital accumulation triggers investment, encouraging more global market openness making it easier to access international markets, setting up a strong and sophisticated financial system to assist Sudan’s economic development, and enhancing Sudan’s spending policy to support the productive sectors and encourage domestic production will significantly stimulate economic growth post-war, taking into account additional measures, such as regulations, investment laws, institutional quality, the integration of the banking system, and identifying expenditure prioritizations.