Foreign Investment Protection Research Articles

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.

Protection of the rights of foreign investors during the state of war in Ukraine

The article is devoted to the study of the protection of the rights of foreign investors during the state of war in Ukraine. The author focuses on the fact that this topic is currently relevant due to the fact that the reconstruction of Ukraine will become necessary. The war caused the outflow of foreign investments from our country. In addition, corruption, pressure from the authorities, and unfair justice are the reasons why foreign investors leave Ukraine. Every investor aspires to work in a state where law and justice reign, so Ukraine, which aspires to membership in the European Union, should create just such a state. Therefore, its primary task is to create a favorable business climate for foreign investors to carry out their activities. Current Ukrainian legislation guarantees compensation and indemnification of losses to a foreign investor, guarantees are also provided in case of termination of investment activity; state guarantees for the protection of foreign investments are defined. In accordance with the Law of Ukraine «On State Support of Investment Projects with Significant Investments in Ukraine», the state provides support to large investment projects. In connection with the introduction of the state of war in Ukraine in 2024, the Law of Ukraine on the insurance of investments against war risks entered into force. The Cabinet of Ministers of Ukraine established a credit agency that provides investment insurance. Although the war made Ukraine unattractive to foreign investors, the authorities are taking all possible measures to improve the country’s investment climate. The author draws attention to the need to study and transpose the experience of successful countries in this regard. For example, Australia offers quite good conditions to foreign investors - consistent economic growth, highly qualified labor force, strategic location, efficient administration and judicial system, and good infrastructure. Mexico is also attractive to foreign investors, the «Invest in Mexico» business center has been created to assist investors. The war is an accelerant for positive changes in the state, and after its end, the reconstruction of Ukraine is an important task, therefore the efforts of all branches of government should be directed at overcoming all obstacles to the effective work of foreign investors in our state.

Article: The Neglected Public Interest in Investor-State Dispute Settlement: Environmental and Human Rights Considerations

With the rapid expansion of bilateral investment treaties (BITs), investor-state arbitration has paved its way to becoming the most preferred dispute settlement method by investors. However, the investment arbitration system has also attracted ‘backlash’. One reason is the challenge to balance between protection of foreign investors and the recognition of host states’ legitimate public interests. With the current pressures to reform the investor-state dispute settlement (ISDS) system, there is a pressing need to offer a better balance between investor protection and host states’ sovereign right to regulate, as well as the wider public good such regulatory measures might have, especially in the context of environmental protection and human rights. This article argues for a better symmetry between foreign investor’s treaty-based claims and host states’ environmental and human rights (EHR) claims to acknowledge the public interests – social, economic, welfare, etc. In particular, it advocates for: the strengthened presence of independent experts and amicus curiae, a proportionality approach; and the overarching development of counterclaims as a consideration not only of the host state’s capacity to regulate but also the wider repercussions of such regulations on the public as well as the conduct of foreign investors.

Assessing the Effects of Chinese Foreign Direct Investment on Green GDP Development in North and South American Regions

This study aims to investigate the impact of foreign direct investment (FDI) on the growth of green GDP (GGDP) in North America and South America. The research is based on a comprehensive dataset covering the period from 2009 to 2019, drawn from multiple countries. By employing a two-way fixed-effects model, the study analyzes the effects of key factors, including FDI, trade openness, economic development level, urbanization level, population size, and industrial structure on GGDP growth.The findings indicate that, in North America, both FDI and the level of economic development exert a significant positive influence on GGDP growth, whereas trade openness demonstrates a negative impact, suggesting that increased trade activities may exacerbate environmental pressures. In South America, while the level of economic development shows a significant positive correlation with GGDP, the effect of FDI is not statistically significant. The study recommends that policymakers focus on enhancing the effectiveness of foreign investment and implement stricter environmental protection policies to ensure that trade activities do not adversely affect the environment. Furthermore, there is an urgent need to adjust the current industrial structure to promote a transition toward more sustainable development models. Ultimately, this research emphasizes the importance of ensuring environmental sustainability while fostering foreign investment and economic growth to achieve long-term growth in green GDP.

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.

What investors want from whom: international organizations and the International Association for the Promotion and the Protection of Private Foreign Investments (APPI) 1958–1974

Abstract Using archival material from states, international organizations, and business actors, this paper explores how the Association for the Promotion and Protection of Private Foreign Investments (APPI), a transnational business interest association (BIA), liaised with different international institutions to lobby for better foreign investment protection. We zoom in on the United Nations, the Organization for Economic Co-operation and Development, and the World Bank to examine how APPI influenced the global institutional landscape during its heydays from 1958 until 1974. We show that business actors, particularly oil and banking corporations, created APPI as a nimble, efficient alliance that could move faster than existing BIAs. We further demonstrate how companies “forum shop” between different BIAs, and how APPI injected its ideas into the policymaking process, using the framework of the three faces of power. By shedding light on the role private business actors played in foreign investor protection, the paper contributes to a better understanding of the emergence of global economic governance in the second half of the 20th century.

Legal protection of foreign investments in the conditions of introduced sanctions against aggressor countries and countries sponsoring terrorism

Legal protection of foreign investments in the conditions of introduced sanctions against aggressor countries and countries sponsoring terrorism

What Can IIAs Contribute to Regulating Cross-border Data Transfer: A Threshold Analysis

Abstract States are using legislation to regulate cross-border data transfer, which has raised new concerns that international investment agreements (IIAs) may be used to protect foreign investment. According to current IIA texts and arbitration practices, some data is likely to be regarded as ‘investment’, but indefinite data ownership and invisibility ‘in the territory’ make use traditional IIA structures to regulate cross-border data transfer uncertain. What IIAs can contribute to regulating cross-border data transfer has a significant impact on the protection of foreign investments. IIAs need to be reformed to keep their vitality in the face of the challenges brought by digital technology. As a response, they can clarify essential concepts, including when is data an ‘investment’ and who is the ‘investor’ that is entitled to bring claims. Considering the distinct data realms, IIA reform is more likely to be initiated through bilateral or regional negotiations among States with similar cultures or complementary interests.

Spatio-temporal evolution and influencing factors of high quality economic development: Case study of Guangdong-Hong Kong-Macao Greater Bay Area

With the increase in global economic integration, high-quality economic development (HQED) has become a common goal of all countries. Based on these five development concepts, this paper uses the Gini coefficient, trend surface analysis, geographically weighted regression (GWR), the entropy weighting method, and standard deviation ellipse analysis to study the spatio-temporal pattern and driving mechanism of HQED in the Guangdong-Hong Kong-Macao Greater Bay Area (GBA). This paper examines the spatial and temporal patterns and driving mechanisms of HQED in the Guangdong-Hong Kong-Macao Greater Bay Area (GBA) based on five development concepts. The study revealed that (1) HQED is on the rise overall, but at the same time, it highlights the uneven development of multiple dimensions, especially in terms of significant differences in innovation, openness, and sharing. (2) HQED shows a clear center-periphery structure, with Guangzhou, Shenzhen, and Hong Kong as the core high-value areas; the growth rate of HQED capacity in the internal areas is significantly greater than that in the external areas, and HQED is prominent in the cities around Guangzhou, Shenzhen, and Hong Kong. (3) Factors such as agglomeration level, human capital, foreign investment, infrastructure development, financial and environmental protection expenditures, and financial inputs, and scientific, and technological inputs have a significant positive effect on HQED, and their interactions are further strengthened. This study reveals the importance of the realization of HQED in the GBA and the promotion of the overall development of the region.

Параллельное судопроизводство в международном инвестиционном праве

This article is devoted to the legal problems arising in connection with the conduct of parallel proceedings in cases related to the protection of foreign investments before two bodies: international investment arbitration and the WTO Dispute Settlement Body. The objective of this paper is to investigate the possibility of simultaneous consideration of a dispute in international investment arbitration and the WTO Dispute Settlement Body, as well as analyze consequential risks. The author concludes that this phenomenon is dangerous for international law, as it not only destabilizes the international legal order in the field of investment, but also does not meet the needs of the foreign investor.

Article: The 2019 BLEU Model BIT: BLEU’s Vision of the Future of Investment Protection

This article compares the 2019 BLEU model bilateral investment treaty with the older 2002 version. After an overview of the BLEU’s role as a major actor in international investment law, the authors argue that the changes introduced by the 2019 Model BIT reflect the EU’s policy towards foreign investment protection. The drafters of the 2019 Model BIT were inspired by the EU-Canada Comprehensive Economic and trade Agreement and the European Commission’s proposal to establish a Multilateral Investment Court. The 2019 Model BIT marks a shift from liberalization of foreign direct investment (FDI) to the protection of the sovereign powers, in particular the State’s right to regulate, and the curtailing of investment protection presented as a response to the investment protection system’s misuse and abuse by investors. By placing certain limitations to substantive standards of protection, placing strong emphasis of sustainable development objectives and advocating a reform of the investor-State dispute settlement (ISDS), the 2019 BLEU Model BIT puts forward a vision for the future of investment protection that departs from the Washington Consensus of economic liberalization but also enables the investment protection system to survive in the face of the so-called backlash against ISDS and the criticism of civil society.

The role and significance of International Commercial Arbitration in investment disputes

International commercial arbitration (ICA) is an important dispute resolution mechanism in the field of international trade and investment. In the conditions of constant globalization and the growing integration of the world economy, there is a need to effectively resolve conflicts arising in the sphere of commerce and investment relations. In recent decades, there has been a significant increase in investment disputes related to various aspects of business, from contractual obligations to the protection of foreign investments.
 Consideration of investment disputes in the ICA involves the use of the principles of the autonomy of the will of the parties, confidentiality, and finality of decisions, which makes this mechanism particularly attractive for businesses and investors. Scientific research in this area is of great importance for understanding the effectiveness and prospects of the development of the ICA as a tool for resolving investment disputes.
 In this context, the analysis of the role and significance of the ICA in investment disputes is of great practical and scientific importance. This article aims to consider the main aspects of International Commercial Arbitration in the context of solving investment conflicts, in particular, to analyze the principles and procedures, consider cases of successful use of the ICA, as well as determine the advantages of this mechanism compared to ordinary court procedures.
 This article analyzes the role and significance of International Commercial Arbitration in the context of investment dispute resolution. Important principles and procedures of the ICA that ensure effective and fair resolution of conflicts between business and investors are emphasized. An analysis of the advantages of the ICA compared to traditional court procedures is carried out, in particular its contribution to the investment climate and investor confidence. Based on the analysis of examples of successful dispute resolution through the ICA, recommendations are provided for the parties in resolving investment conflicts. This article has implications for practitioners, academic researchers, and anyone interested in international trade and investment.

Critical analysis of the new Chinese foreign investment law in the prism of China-EU CAI and China-US bit negotiations

The Chinese foreign direct investment legal system prior to 2019 evolved constantly, although it failed to satisfactorily address the main issues for foreign direct investments. The new Chinese Foreign Investment Law of 2019 and its Implementing Rule made a landmark improvement to the legal system. This new reform went hand in hand with the China-EU Comprehensive Agreement on Investment (CAI) and China-US BIT and their negotiations. It played a preparative role for the progress made in these two influential investment agreements. It offered unprecedent solutions in areas such as the pre-establishment national treatment, prohibition of forced technology transfer and the enhanced foreign investment protection. Nonetheless, further reforms on SOEs are still needed. The ratification of the China-EU CAI and the reanimation of the China-US BIT, albeit unlikely to happen anytime soon, would still provide long-desired clarity to the dispute resolution mechanism, national security review system and forced technology transfer issue.

Legal Protection for Foreign Investments Aligned with the Second Principle of Pancasila: A Scholarly Exploration

Foreign Direct Investment (FDI) plays a crucial role in a country's economic advancement. This research focuses on assessing the legal protection afforded to FDI, with a specific emphasis on applying the second principle of Pancasila, "Just and Civilized Humanity." The goal is to ensure sustainability, respect for human rights, and active participation in foreign investments in Indonesia. The research adopts a normative legal approach, analyzing key legal documents and regulations, including Law Number 25 of 2007. The evaluation encompasses procedures and policies aimed at preserving FDI in Indonesia. The research findings highlight the significant influence of the second principle of Pancasila in establishing a legal and moral framework for the protection of FDI. This principle underscores the importance of fair and dignified treatment for all individuals, including foreign investors. These principles are explicitly outlined in Law Number 25 of 2007, which delineates the rights and responsibilities of foreign investments, advocates for equal treatment, and supports sustainable and equitable economic growth. However, challenges in implementing legal protection for FDI persist, including discrepancies in legal interpretation, bureaucratic complexities, and shifts in government policies. Addressing these issues is crucial to fostering a conducive environment for foreign investments and aligning with the ideals of Pancasila for just and civilized humanity.

Protection of Foreign Investors in Foreign Investment Activities and its Implications to the Country

In the interest of increasing national and economic development, Indonesia needs various kinds of support from all aspects. One of them is the presence of foreign investors. However, Indonesia is considered to not fully support the presence of foreign investors, so there are many investment constraints that have not been addressed comprehensively. To fulfill these interests, the Indonesian government formulated policies regarding investment and legal protection provided to foreign investors through Law Number 25 of 2007 concerning Investment. This study aims to determine legal protection and the implications of foreign investment activities in Indonesia. This study uses a normative juridical approach. The primary source of legal material is Law Number 25 of 2007 concerning investment. The source of secondary legal materials uses relevant literature. Data collection were done using the library study method. Data analysis were done using deductive analysis techniques. The data presentation technique uses a qualitative descriptive technique. The results of the study stated that legal protection for foreign investment (PMA) in Indonesia according to Law Number 25 of 2007 concerning investment is the application of the principle of equality for foreign and foreign investors. Legal protection is also given for actions of nationalization, acquisition of ownership, transfer of assets, transfers, and repatriation. Foreign investment has an important role in Indonesia to increase economic growth and increase national development.
 Keywords: legal protection, investment, foreign, implication

Investment attractiveness of Ukraine in conditions of prolonged war

The article indicates the impact of investments on the economy of Ukraine and investigates the investment potential in the conditions of a protracted war and the investment attractiveness of Ukraine in the conditions of a prolonged war. The important mechanism for stimulating investment activity, namely state support of the authorities in the form of compensation of a part of the interest rate and provision of state guarantees for loans is considered. Negative factors that significantly affected the process of attracting investments in the development of the economy, namely the development of the country and its economy in the conditions of war, are also presented; lack of protection and state guarantee mechanisms for foreign investments. Nevertheless, the main problems that concern investors when investing in the military economy have been revealed. The article describes why Ukraine remains attractive for investment in the face of a full-scale invasion and its potential in the face of a protracted war. It indicates how to ensure the stable development of investment attractiveness. The platform for potential foreign investors is mentioned, which collects more than 500 investment projects and opportunities in 10 sectors of the economy that have significant investment potential, namely: the defense industry, metallurgy and metal processing, energy, natural resources, agricultural sector, transport infrastructure, manufacturing, woodworking and furniture manufacturing, pharmaceuticals, advanced technologies. It also indicates which sector suffered the least losses from the war and retained 95% of contract volumes. This paper describes what is necessary to ensure the stable development of investment attractiveness. It is stated that Ukraine should reform its economy and improve the business environment by improving the legal system, fighting corruption, ensuring intellectual property rights and promoting entrepreneurship and innovation. Possible ways to attract investments in the conditions of a long-term war are indicated. It analyzes how Ukrainians invest during the war and which investment strategy they choose. It is noted that the agreement with the G7 and the EU on investment guarantees provides for the receipt of long-term and economically beneficial loans from international financial organizations, such as the World Bank, the European Bank for Reconstruction and Development, and the European Investment Bank.

Legal Protection for Foreign Investors in Investing Capital in the National Capital City

The relocation of Indonesia's national capital to East Kalimantan requires a lot of capital, including from foreign investors. To safeguard the success of this project, regulation and legal protection for foreign investors in IKN are important. This ensures legal certainty and trust for foreign investors participating in the project. This legal research is normative research with secondary data qualitative analysis using a statutory approach. Data sources involve primary, secondary, and non-legal materials. Data was collected through literature studies and online sources. The government has created a special regulation, namely Government Regulation (PP) No. 12 of 2023, which supports investment in the National Capital City (IKN). While it provides strong legal incentives and protection, it is important to regularly monitor the impact of this regulation, improve conformity with environmental standards, encourage partnerships with UMKM, and intensify international promotion. As well as engaging stakeholders and improving licensing transparency. Legal protection for foreign investors in IKN is well-regulated through the UU PM and bilateral investment agreements. In the face of global competition, the government needs to maintain investment policy stability, improve ease of doing business, consider sustainable practices, and create specific legal protection regulations to attract more foreign investment for sustainable economic growth.

Home market power and host market protection of foreign investment

How do multinational firms trapped in host markets suffering from political violence find security? Terrorism and conflict repel foreign investment and recent research has sought to understand heterogeneity across firms in their response to violence. When multinational firms are unable to move their investments in the face of violence, we argue that their home governments use diplomatic capacity and security and economic resources to secure protection from host governments. Multinational corporations from home markets with significant leverage over host markets are therefore less likely to curtail their operations or investments in the wake of violence. Examining dyadic data on foreign direct investment (FDI), we show that home market diplomatic missions, aid, and alliances substantially abate the negative effects of violence on FDI. Consistent with our argument, this effect is observed after violence begins and is not an artifact of host markets garnering security aid from great powers other than the home market. A strong diplomatic presence matched to both hard and soft power resources positively contributes to the defense of core foreign policy interests.

Problematika Investor State Dispute Settlement dalam Bilateral Investment Treaty Indonesia-Singapura 2018

The signing of the 2018 Indonesia-Singapore BIT is a new chapter for Indonesia in establishing international relations in the field of investment after in 2013 Indonesia stopped the 2005 Indonesia-Singapore BIT because it was more in favor of foreign investors. This alignment is contained in the Investor State Dispute Settlement (ISDS) mechanism where the dispute resolution mechanism is also regulated in the 2018 Indonesia-Singapore BIT even though it is known that the ISDS mechanism has many shortcomings and provides protection for foreign investors. Therefore, there is a need for a new alternative to perfect the ISDS mechanism. Normative juridical methods are used in this writing by qualitatively analyzing the data. The results of the study concluded that the ISDS mechanism in the Indonesia-Singapore BIT 2018 has not been able to protect Indonesia's interests in international investment cooperation and requires an Investment Court System (ICS) mechanism to perfect the ISDS mechanism.

‘These are my principles. If you don’t like them I have others.’ On justifications of foreign investment protection under international law

Abstract This article aims to show that the mainstream discourse of the international law of foreign investment protection has adjusted itself to changing historical circumstances in a way that brings to light its strategic and ideological character. It argues, in particular, that the justifications offered in defence of foreign investment protection under international law appear to have been pretextual rather than principled, having been offered to provide reasons capable of flying at a particular point in time in light of the attending circumstances rather than to serve as an analytically sound, empirically grounded, and diachronically consistent framework.