Journal of Advances in Developmental Research

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The Empire of Investment: Geopolitical Dynamics in International Investment Law

Author(s) Shilpa Khandelwal
Country India
Abstract Investment arbitration is inherently geopolitical, offering alternatives to resolving overseas investment disputes traditionally handled through host government courts or diplomatic protection. The latter often entails significant diplomatic compromises. Public international law treaties form the procedural and substantive frameworks of investment arbitration, significantly impacting the investor's autonomy and host state's laws. The jurisdiction of arbitral tribunals is consent-based, defined by investment treaties, domestic laws, or specific arbitration clauses. Investment arbitration bypasses the need for investors to seek their home government's intervention, enhancing their independence in disputes with host states. This arbitration form has grown in acceptance, offering protections like fair treatment and safeguarding against discriminatory expropriation, fostering the rule of law internationally. Despite its benefits, investment arbitration faces opposition, especially from developed nations, due to perceived encroachments on national sovereignty and policy priorities. The COVID-19 pandemic has heightened these concerns, as emergency health measures are challenged under arbitration clauses. The reputational risks of arbitration claims can deter investment, challenging the cost-benefit rationale of adopting investment arbitration. Investment legality, national treatment standards, and the impact of arbitration claims are pivotal in these disputes. Tribunals consider the gravity and timing of legal violations, the investor's awareness of such violations, and whether discrimination against foreign investors occurred. Ultimately, the decision to accept investment arbitration remains a complex political choice, weighing economic benefits against potential sovereignty and policy costs.
Keywords Arbitral Tribunal Jurisdiction, Investor-State Disputes, Bilateral Investment Treaties (BITs), Fair and Equitable Treatment, Discriminatory Expropriation.
Published In Volume 16, Issue 1, January-June 2025
Published On 2025-06-20
Cite This The Empire of Investment: Geopolitical Dynamics in International Investment Law - Shilpa Khandelwal - IJAIDR Volume 16, Issue 1, January-June 2025.

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