Unpacking National Investment Laws: Dispute settlement

National investment laws are increasingly recognized as a critical—yet often overlooked—pillar of the international investment governance framework. While much attention has focused on reforming investment treaties, a parallel challenge has gone largely unaddressed: many domestic investment laws still contain broad or automatic consent to international arbitration, exposing states to the same financial and regulatory risks that drive treaty reform.

Two new publications from IISD and UNCTAD shed light on this issue from complementary perspectives.  

• IISD's report, Unpacking National Investment Laws: Dispute Settlement Function, analyzes 167 national investment laws across all regions, mapping how dispute settlement is designed in practice—from the role of national courts and arbitration to emerging alternative mechanisms such as administrative review and amicable settlement. It finds that nearly 79% of laws contain dispute settlement provisions and that among those that reference arbitration, 44% include advance consent—a practice that carries significant and often uncontrollable legal and financial risks.
• UNCTAD's Investment Policy Monitor No. 32, Investor–State Arbitration Under Investment Laws: Risks and Policy Lessons, examines 99 known investor–state arbitration cases brought under national investment laws. It reveals that nine out of 10 such cases target developing economies, that investors prevail in 58% of cases decided on the merits, and that average damages awarded reach USD 215 million per case. The analysis draws practical lessons from arbitral practice on issues that include the interpretation of consent clauses, transitional provisions when laws are repealed, the legality of investment, and the interaction between domestic laws and treaty obligations.

On May 7, IISD and UNCTAD hosted a webinar to explore key findings and reform needs identified in the publications. A panel of experts, government officials, and legal practitioners discussed the risks posed by dispute settlement provisions in investment laws, emerging good practices, and the importance of governments reforming their international investment treaties and domestic investment frameworks in a coherent manner.

This webinar is part of IISD's Rethinking International Investment Governance project, which supports evidence-based reform of investment treaties, national investment laws, and investor–state contracts. It builds directly on IISD's 2023 report, Rethinking National Investment Laws: A Study of Past and Present Laws to Inform Future Policy-Making, which identified seven core functions of investment laws and proposed a framework for their design and reform. The Unpacking National Investment Laws series provides deep dives into individual functions, starting with dispute settlement. For more information, visit: https://www.iisd.org/projects/rethinking-international-investment-governance

As part of its mandate, UNCTAD provides policy-makers and the global investment community with up-to-date information about the latest developments and salient features in foreign investment policies. UNCTAD's Investment Policy Hub offers a comprehensive and freely accessible platform covering all aspects of national and international investment policy-making. The Hub brings together analysis, news, and policy tools, as well as key resources, such as Investment Policy Reviews, the Investment Policy Monitor, and specialized databases of investment laws, treaties, and dispute settlement cases, supporting informed decision making and promoting a transparent and predictable investment environment worldwide.

For more information, visit: https://investmentpolicy.unctad.org/

Speakers

• Suzy Nikièma, Director, Investment Law and Policy, IISD
• Massimo Meloni, chief, Policy Research Section, UNCTAD
• Josef Ostřanský, senior policy sdvisor, IISD
• Anastasia Leskova, associate legal officer, UNCTAD
• Stanley U. Nweke-Eze, policy advisor, IISD
• Mr. Amr Arafa, Counsellor, Egyptian State Lawsuits Authority (ESLA)
• Peter Tzeng, Partner, Foley Hoag LLP.