THE DEVELOPMENT OF INTERNATIONAL INVESTMENT DISPUTE SETTLEMENT SYSTEMS

Foreign direct investment is currently one the fastest growing parts of international law. It has increased due to the proliferation of bilateral investment treaties (BIT). The contribution of the BITs has ensured the protection of foreign investors and investment. In other words, in cases where there is a dispute, the investor will settle the dispute before the impartial and independent arbitration tribunal instead of the courts of the host state. Thus, BITs limit the host states’ sovereignty by providing arbitration method. Although the introduction of arbitration method is considered to be a big step after the Second World War, it cannot be said that it solves the fundamental problem over the time. Before the war, when an investment dispute arose, the investor was used to go to the court of the host state and see the sovereignty power. After the war, investor has been encountered the same effect in the execution of the arbitral award in the host state. Therefore, the focus of the article will be on the history of international investment law based on dispute settlement systems of BITs compared with historical investment dispute settlement systems. In addition, it is argued that the application to arbitration does not change the result of state sovereignty. It may signal future problems in this field since it causes revisiting to the court system. The most obvious example of this is the efforts to establish a multilateral investment court