Arbitration in the sphere of international investments: trends and challenges

Abstract

The article analyzes the dualistic legal nature of the International Center for Settlement of Investment Disputes, in particular, ICSID is based on the principles of public international law, however, the procedure for considering disputes within the framework of international investment arbitration is similar to international commercial arbitration.

The following main trends in the development of legal mechanisms for the settlement of disputes in the field of international investment relations are identified: changes in approaches to the conclusion of international investment treaties; reforming existing and creating new institutions for the resolution of investment disputes; introducing digital technologies into the arbitration process; strengthening the role of environmental, social and management factors in investment arbitrations.

Based on the legal analysis of the modern mechanism of international investment arbitration, a number of shortcomings are identified that are due to the realities of today. Special attention is paid to the problems of legitimacy, transparency and consistency of arbitration decisions, as well as the impact of new technologies and ESG factors on the development of investment arbitration.

Options for reforming investment arbitration of UNCITRAL Working Group III were considered: the creation of a multilateral appeal mechanism, the establishment of a permanent investment court, a code of conduct for arbitrators, rules on third-party financing, mechanisms for the prevention and alternative resolution of disputes.

The following approaches to improving the existing arbitration model were considered: clarification of substantive standards of protection in new investment treaties, the introduction of mechanisms for the joint interpretation of treaty provisions by participating states, the development of mediation and other alternative methods of resolving investment disputes, the creation of mechanisms for the early rejection of unfounded claims, and the improvement of procedures for the selection and appointment of arbitrators.

The following key principles for reforming the international investment arbitration system were identified: institutionalization, transparency, consistency, inclusiveness, and balanced protection of investors' rights and public interests of states.