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Top Advantages of Investment Arbitration for States

Rattsa Kuten
Top Advantages of Investment Arbitration for States

Investment arbitration is a mechanism to resolve disputes between two states involved in international trade and commerce. We can say a foreign investors and host states have to resolve the dispute in case of matters related to investment and economic development. This usually includes the international dispute settlement mechanism for legal protection and in cases related to investment disputes. 

A qualified and independent arbitrator will be selected in accordance with standards of protection granted under international agreements to decide on the dispute and render an enforceable award. 

Choosing arbitration over court proceedings is a way to resolve dispute in a cost-effective manner. Foreign investors can choose arbitration to resolve disputes with a host state as a solution of the arrangement of an international treaty. Investment arbitration is sometimes an arrangement of BIT (Bilateral Investment Treaty) or multilateral treaty.  

This method of dispute resolution helps foreign nationals get a quick and fast resolution. It is one of the most flexible and convenient methods for parties to resolve their disagreements.  

Investment Arbitration 


Essentially, an investment treaty is a law that allows foreign investors to initiate an arbitration dispute resolution process. A host state can make a counterclaim related to the claims of the foreign investor. Parties have to choose at least three arbitrators. The foreign party has to choose one, second by the respondent state, and third either by agreement of the other two arbitrators. 


Investment arbitration does not follow any centralised set of procedural rules as such. But only parties choose some rules that will apply to the dispute. These rules are specified in the treaty and sometimes parties choose these rules for every dispute. 


Benefits of Investment Arbitration  

1. Confidentiality- Investor-state arbitration is one of the preferred techniques of dispute resolution because they provide great transparency and confidentiality. Some of the major arbitral rules in investment treaties are laid to provide greater transparency in investor-state arbitration. Parties can anytime seek confidentiality with the help of an agreement between the host state and foreign state. Generally, the arbitration process takes place in private and an award is given in private too. Each party is free to choose whether they want to make the decision public or not.

2. Cost- Tribunals are free to decide how and who should pay the arbitrator's fees. Arbitration is a cost-friendly process of dispute resolution. However, according to ICSID, anyone can bear the cost of the arbitration. Some tribunals even say that the party that loses, should pay the costs. In short, it is a fast process. It saves money because you do not need to pay court fees.

3. Binding - Investment awards are binding, which means these cannot be appealed once given. However, there are some ways by which these awards are reviewed with the help of a special tribunal. 

4. Peaceful - When a case goes to court unlike arbitration, there will likely be fights and the process generates some amount of hostility. This sort of environment is not appreciated from the business point of view. Arbitration is an easy way to facilitate a cooperative environment without damaging the reputation of the parties.

Choose The Stockholm Chamber of Commerce

The SCC is a key organisation at the forefront of the latest developments in international arbitration. It is also notable for introducing the SCC platform for communication and file sharing between the parties and the tribunal. It went further and encouraged various tribunals during the COVID-19 pandemic to switch to a digital environment and continue with their work. 

Additionally, the Swedish arbitration act 2019 further makes Sweden an easily accessible place for non -Swedish parties. The law was passed in 2019 to make the entire arbitration process more efficient and accessible for everyone. That ensures that Sweden is one of the most attractive venues for international dispute resolution.

In Conclusion 

With various benefits, arbitration has turned out to be one of the best method for dispute resolution. However, you need to choose the best dispute resolution services to help you get faster results and a peaceful settlement. 

With Rattsakuten, you need not worry about losing your precious time because you can get the quick solution. It handles a range of dispute resolution methods in Stockholm, Sweden and across Europe. It is one of the unique law firm that assist different types of companies with their investment and commercial dispute matters.

Rattsa Kuten
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