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Much like a tightrope walker balancing opposing ends, international arbitration distinguishes between protecting foreign investment and preserving state sovereignty. In a global landscape where capital moves faster than law, arbitration emerges as a dominant forum for adjudicating investor-state disputes. But does this mechanism uphold justice, or does it tilt toward capital at the cost of public interest?
This paper critically examines the role of international arbitration in resolving investment disputes, focusing on how legal protections like expropriation safeguards and national treatment rights interact with state duties to uphold human rights, public policy, and environmental obligations. By tracing the historical development of investor-state dispute settlement frameworks (particularly through the ICSID Convention, UNCITRAL Rules & key bilateral and multilateral treaties), the study situates arbitration within broader currents of international law.
Through doctrinal analysis of landmark cases and recent ESG-driven disputes, the paper explores whether arbitration mechanisms fairly balance investor claims, such as expropriation and national treatment, against state obligations rooted in public policy, human rights, and environmental sustainability. The paper further interrogates growing criticisms surrounding third-party participation and the opacity of arbitral proceedings. A key concern explored is whether human rights concerns are rendered collateral damage in the pursuit of investment protection. Also, questioning whether existing arbitration models can adapt to evolving global justice concerns without compromising their legitimacy.
Ultimately, the study seeks to evaluate the practical legitimacy and normative coherence of international arbitration as a tool of global justice, not merely from the lens of economic expediency, but from the standpoint of legal responsibility and institutional fairness.
Keywords:
International Investment Arbitration, Investor-State Dispute Settlement, Third Party Participation, ESG Claims, ICSID Convention, and Bilateral Investment Treaties
Cite Article:
"The Role of International Arbitration In Resolving Investment Disputes.", International Journal for Research Trends and Innovation (www.ijrti.org), ISSN:2455-2631, Vol.11, Issue 1, page no.b143-b152, January-2026, Available :http://www.ijrti.org/papers/IJRTI2601120.pdf
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2456-3315 | IMPACT FACTOR: 8.14 Calculated By Google Scholar| ESTD YEAR: 2016
An International Scholarly Open Access Journal, Peer-Reviewed, Refereed Journal Impact Factor 8.14 Calculate by Google Scholar and Semantic Scholar | AI-Powered Research Tool, Multidisciplinary, Monthly, Multilanguage Journal Indexing in All Major Database & Metadata, Citation Generator