Protecting Foreign Investments

1257 WordsJul 12, 20186 Pages
Most of the foreign investments are protected by investment treaties and if there is any breach, the investor can seek for compensation under international arbitration. The question is whether to which extent does the arbitration provides them solution and which ways or methods they can seek alternative to arbitration. The answers for all these will be discussed in this research analysis step by step considering all the issues and the pros and cons as well, which it will give a meaningful conclusion at the end. International arbitration serves as the important method where foreign investors can bring claims against host state arising from an investment disputes under the current international investment law. Investor State Dispute…show more content…
The pros of these alternatives are that they provide flexibility, with the possibility to settle disputes between investor state in an amicable manner, by allowing them to continue working relationship. Also this process will be speedy; finally these alternative approaches will lead to improvement in states regulatory practices and good governance. There are challenges to alternative approaches too in addition, where parties are unfamiliar and inexperienced with techniques involved, non-binding to parties, also can be waste of time if they are not successfully conducted, and further will not suit for all the investment disputes. Moreover there will also be difficulties which states as a party to the disputes will have to face in using such an alternative approach effectively. For instance, since states are limited in flexibility due to its existing regulation and laws, it will face difficulties in finding a compromised solution. Moreover the government officials too won’t always get powers to use alternative approaches effectively. Also some provisions in IIAs do not go along with alternative approaches where they don’t allow the use of ADR techniques. Further DPPs could also possibly cause inter institutional conflicts. While arbitration being the main approach in IIAs, there are situations where alternative approaches too incorporated into them. IIAs provide a reasonable period or “cooling off period” with the aim of negotiation before
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