International Investment Law Journal
Volume 5, Issue 1, February 2025
Table of Contents
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- Associate professor Cristina Elena POPA TACHE
Editorial: Normative Grey Areas in International Investment Law – The Dynamics of Regions, Technologies, Dispute Resolution, and the EnvironmentAbstract:International investments are undergoing a profound transformation, influenced by Investor-State Dispute Settlement (ISDS) reform, the growing influence of major players in the field, the impact of climate change, and new legal challenges brought by artificial intelligence. Adding to these complexities is the proposal for a UN treaty on business and human rights, which is disrupting the status quo of investor protection and corporate responsibility. ISDS reform requires a balance between international standards and regional specificities, while Chinese investments in the Western Balkans highlight tensions between global capital and European regulations. Climate change disputes underscore the need to reconcile investor protection with environmental policies. Meanwhile, artificial intelligence raises critical issues regarding digital sovereignty and jurisdictional competence in cross-border transactions. Thus, the evolution of international investment law is not merely defined by norms and treaties but also by its ability to reconcile economic interests with justice, environmental protection, and technological innovation – an essential condition for maintaining equilibrium between power, ethics, and sustainable development.
Keywords:international investments, ISDS reform, investor protection, UNCITRAL, the UN Treaty on Business and Human Rights.
JEL Classification:F21, K33, K41, O10
DOI: 10.62768/IILJ/2025/5/1/01
Page 4 - PhD. Amira MAHMOUD
Bridging Global and Regional Perspectives in ISDS Reform: Regional Mechanisms and Legal Empowerment for the Middle East and Africa RegionsAbstract:Investment arbitration is undergoing significant transformation, with UNCITRAL Working Group III (WGIII) leading initiatives to reform the investor-state dispute settlement (ISDS) system. This study evaluates the progress and challenges of these reforms, focusing on their implications for developing countries, especially in the Middle East and Africa. The objectives are twofold: first, to assess the potential of regional mechanisms as complementary frameworks to global ISDS structures, and second, to explore strategies for capacity building and ensuring equitable access for under-resourced states and small to medium-sized enterprises (SMEs) in these regions. Using a qualitative approach, the article examines policy proposals from WGIII through the lens of a regional perspective. The analysis highlights the benefits of integrating regional mechanisms to enhance procedural efficiency and local relevance. Additionally, it underscores the importance of advisory centres and training programs to address systemic imbalances in certain regions. The findings demonstrate that bridging global reforms with regional realities can nurture trust and cultivate inclusiveness in ISDS. The study concludes by offering actionable recommendations to policymakers and arbitration stakeholders, emphasising the need for reforms that balance global standards with regional adaptability.
Keywords: ISDS Reform, Middle East and Africa, Investment Arbitration, Regional Mechanisms, Capacity Building, Access to Counsel
JEL Classification: K22, K33
DOI: 10.62768/IILJ/2025/5/1/02
Page 11 - PhD. candidate Nancy Carolina FABARA VERDEZOTO
China’s Growing Investment in the Western Balkans: Economic Opportunities and Geopolitical ChallengesAbstract:Over the past ten years, China’s growing investment in the Western Balkans has drastically changed the geopolitical and economic landscape of the region. China has used the ‘16 + 1’ initiative, as a major tool to increase its influence in Central and Eastern Europe. The ramifications of China’s increasing foreign direct investment in the Balkans are examined in this paper, with particular attention to how well it complies with EU regulations and international investment law. As China tries to strike a balance between its relationship with the EU and growing its influence in the Balkans, the convergence of the telecommunications, energy, and foreign direct investment sectors has grown more significant. Green technologies, high technologies, and infrastructure have been the main targets of Chinese investments in the area. However, these investments have also raised concerns about public procurement practices, environmental protection, and potential debt traps for the recipient countries. The interaction between EU laws and Chinese investments in the Balkans is shaping FDI flows in the region. While Chinese businesses may gain access to profitable markets by adhering to EU requirements, EU member states might implement restrictions on Chinese FDI if perceived as threats to regional industry or security. This paper aims to provide policymakers, researchers, and investors with insights into the complex interplay between China’s FDI, regional development, and international relations in the Balkans. The paper will use comparative legal analysis methodology to examine China’s FDI practices in the Western Balkans and compare them with EU regulations and international investment law to assess compliance. The analysis will include one case study in Serbia. The paper would provide a comprehensive understanding of the complex interplay between Chinese FDI, regional development, and international legal frameworks, offering valuable insights for policymakers, researchers, and investors.
Keywords: FDI implications, EU regulatory framework, Regional geopolitical dynamics, China-Western Balkans investment, 6 + 1 initiative.
JEL Classification: K22, K33
DOI: 10.62768/IILJ/2025/5/1/03
Page 30 - Lecturer Rawnak Miraj Ul AZAM; Professor Syeda Afroza ZERIN; Lecturer Fahim Faisal Khan ALABI
ISDS Reform and Environmental Governance: Addressing Climate Change Disputes Through UNCITRAL’s FrameworkAbstract:Investment arbitration is increasingly intersecting with global efforts to address climate change, as disputes related to climate measures, such as renewable energy subsidies and fossil fuel phase-outs are being brought under Investor-State Dispute Settlement (ISDS) mechanisms. However, the current ISDS framework often creates tension between investor protections and states’ rights to regulate for environmental purposes. This research explores how ISDS reform, particularly through UNCITRAL’s Working Group III, can better address climate change disputes while aligning with Sustainable Development Goals (SDGs). The study investigates how ISDS reforms can protect states’ regulatory autonomy for environmental and climate change measures, ensure that investment arbitration aligns with international climate agreements like the Paris Agreement, and incorporate specialised approaches for climate-sensitive disputes. Using a qualitative methodology, it analyses case law (e.g., Urbaser v. Argentina and Vattenfall v. Germany) to identify trends and gaps in handling climate-related disputes, reviews treaty provisions, reform proposals, and legal commentaries to evaluate the potential for environmental carve-outs, climate-sensitive arbitration rules, and public interest participation, and examines comparative practices in international environmental and investment law to recommend actionable reforms. The study’s objectives include proposing treaty provisions that integrate environmental safeguards and incentivize green investments, advocating for procedural reforms such as appointing arbitrators with environmental expertise and enabling amici curiae participation, and recommending the development of specialised dispute resolution mechanisms for climate-related issues. By aligning investment arbitration with environmental governance, this research aims to balance investor rights with states’ responsibilities to combat climate change, ensuring a fair and sustainable approach to international economic law.
Keywords: ISDS reform, climate change disputes, investment arbitration, environmental governance, UNCITRAL WGIII, sustainable investment and regulatory chill.
JEL Classification: K32, K33
DOI: 10.62768/IILJ/2025/5/1/04
Page 51 -
Postgraduate student Thupane Justice KGOALE; Professor Kola O. ODEKU
Untangling the Jurisdictional Challenges Posed by ‘AI’ in Conducting International Trade and InvestmentAbstract:The deployment of variegated forms of AI (Artificial Intelligence) systems in digital investment and trade has not only heightened the uncertainties about international investment and trade rules in goods and services but has also resulted in the conflation of long-established rules of jurisdiction. As a result, due to potential misclassification and non-classification of some goods and services, there could be confusion as to which investment and trade rules should apply in digital investment and trade. Undoubtedly, this transformation is now impacting how they are traded, distributed, and consumed and necessitates a complete overhaul of international investment and trade rules. As a general-purpose technology, AI is expected to bring about fundamental changes in the economy. As such, the increased use and deployment of AI systems in the digital ecosystem means its embedded systems should work seamlessly across international borders in real time. As a result, cross-border regulation, policy coordination, and cooperation have become vital instruments in realising opportunities and mitigating problems associated with digital investment and trade. Thus, the growing proliferation of cross-border data flows also raises critical legal questions regarding state jurisdiction and sovereignty, among other things. Besides data value and how it is collected, powerful states have scrambled to monopolise data governance to entrench their digital supremacy. Against the backdrop of this, this article looks at the vital legal aspects impacting the law of jurisdictions concerning digital sovereignty and challenges of a cross-jurisdictional nature.
Keywords: AI, digital sovereignty, digital supremacy, cross-border investment and trade and regulations.
JEL Classification: K22, K24, K33
DOI: 10.62768/IILJ/2025/5/1/05
Page 74 - Postgraduate student Can ÇELİK
Foreign Direct Investments Restrictions of TurkeyAbstract:Investment preferences have also been affected by globalisation. In this direction, Foreign Direct Investments gained importance. Countries that realised this importance early have achieved significant gains. After the establishment of efficient legal guarantees, an increase was observed in Foreign Direct Investments, and Foreign Direct Investments made to countries providing legal assurance increased. With the increase in Foreign Direct Investments, employment opportunities have increased in the host country, it contributes to human capital development in the invested country, the process of adaptation to technological developments has accelerated that cannot be achieved through financial investments or trade in goods and services, and a transfer of technology positively affects local productivity. In this context, the Foreign Direct Investment Law No. 4875 came into force in Türkiye in 2003. Within the scope of the European Union, the European Union’s Regulation on foreign direct investment entered into force on 10 April 2019. On the other hand, Countries take action to prevent negative consequences facet of Foreign Direct Investments. These restrictions can be classified into three groups, which screen the investments, removing incentives such as tax incentives; to prohibit or limit foreign investors for certain sectors, like mining or media. In this study, after the historical development of Foreign Direct Investments has been discussed, then Foreign Direct Investment Restrictions will be addressed within the scope of the Türkiye.
Keywords: foreign direct investments, investment law, globalisation, investment arbitration.
JEL Classification: K22, K33
DOI: 10.62768/IILJ/2025/5/1/06
Page 89 - Book Review by Senior research fellow Marina TRUNK-FEDOROVA
Book Review: 'Seljan Verdiyeva, Regional Trade Agreements in Eastern Europe, Central Asia and the Caucasus: Is Multilateralisation of Regionalism Possible?, Peter Lang, 2020'Abstract:The book ‘Regional Trade Agreements in Eastern Europe, Central Asia and the Caucasus: Is Multilateralisation of Regionalism Possible?’ by Seljan Verdiyeva explores the relationship between regional trade agreements (RTAs) and the multilateral trading system. Focusing on the concept of ‘multilateralisation of regionalism,’ the author analyses RTAs in the Caucasus, Central Asia, and Eastern Europe. The monograph examines whether these agreements contain elements that could harmonise trade regulations regionally and globally, emphasising non-tariff barriers, investment, competition policies, and energy regulation. With a comparative analysis of integration structures like the Eurasian Economic Union, EU Association Agreements, and CIS Free Trade Agreements, the study underscores the potential for multilateralisation, particularly in rules of origin and investment regulation, while addressing the challenges posed by geopolitical and economic complexities.
Keywords: regional trade agreements (RTAs); multilateral trading system; multilateralisation of regionalism; Eurasian Economic Union (EAEU); EU association agreements; rules of origin (RoO); investment regulation; trade facilitation; non-tariff barriers.
JEL Classification: K22, K33
DOI: 10.62768/IILJ/2025/5/1/07
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