INTERNATIONAL INVESTMENT ARBITRATION: INVESTOR PROTECTION MECHANISMS AND STATE SOVEREIGNTY
DOI:
https://doi.org/10.62872/9t5hdz30Keywords:
International Investment Arbitration, Investor Protection, State SovereigntyAbstract
International investment arbitration is one of the fast-growing dispute resolution mechanisms as foreign investment flows in various countries increase. The presence of this mechanism aims to provide legal protection to foreign investors through independent, neutral, and binding dispute resolution. However, in practice, international investment arbitration not only provides legal certainty for investors, but also raises various legal issues related to the exercise of state sovereignty. Arbitral awards that require the state to pay large amounts of damages are often considered to limit the state's authority to set public policies, particularly in the areas of environment, health, taxation, and natural resource management. This study aims to analyze the investor protection mechanism in international investment arbitration and examine the relationship between investor protection and the principle of state sovereignty. The formulation of the problem in this study is how the investor protection mechanism in international investment arbitration and how to balance investor protection with state sovereignty in the perspective of international law. The research method used is normative legal research with a statutory approach, a conceptual approach, and a case approach through the study of various international legal instruments, conventions, and international investment arbitration awards. The results of the study show that investor protection is an important part of creating a conducive investment climate, but its implementation must still pay attention to the state's right to regulate for the public interest. Therefore, a balance between investor protection and state sovereignty is needed to realize a fair, effective, and legal arbitration system for all parties.
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Copyright (c) 2026 Reyhan Novandra, Rahmianti Ranti Pawari, Cik Marhayani (Author)
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