Unpacking National Investment Laws

This report by the International Institute for Sustainable Development (IISD) analyzes the dispute settlement function within national investment laws, based on a review of 167 laws. It examines the prevalence of adjudicative mechanisms like national courts and arbitration, as well as non-adjudicative options such as administrative review and amicable settlement. The report warns against the risks of 'advance consent' to international arbitration and provides a framework for policy-makers to assess and reform their national investment laws to minimize legal and financial risks.

• An analysis of 167 national investment laws shows that dispute prevention, management, and settlement (DPMS) provisions are common, appearing in nearly 79% of the reviewed laws. The highest inclusion rates are found in Africa (91%) and Asia (84%).
• National courts are a frequent dispute resolution option, mentioned in 57% of laws with a DPMS function. Approaches vary from requiring exclusive use of domestic courts (e.g., Armenia, El Salvador, and Kenya) to requiring the exhaustion of local remedies before seeking other options (e.g., Sierra Leone and Equatorial Guinea), or offering flexible parallel mechanisms (e.g., United Arab Emirates and Ethiopia).
• Arbitration is referenced in 69% of laws with a DPMS function, though it is never the primary method. While 42% of these laws incorporate both national and international arbitration, 40% use exclusively international arbitration, and only 2% use exclusively domestic arbitration.
• The report identifies significant risks associated with 'advance consent' to arbitration, which is present in 44% of laws that refer to arbitration. This practice exposes states to the same financial and regulatory risks as treaty-based investor-state dispute settlement (ISDS), including high damages awards—averaging USD 256 million between 2014 and 2023—and costly legal proceedings averaging USD 5 million per state.
• Non-adjudicative dispute settlement mechanisms are emerging but are less common than adjudicative ones. Party-agreed methods are found in 42% of laws (most common in Africa and Asia), administrative review in 39% (more common in advanced economies), and amicable settlement options in 32% (more common in emerging and developing economies).
• Dispute prevention and management institutions are a growing but still rare trend, established in only 13.64% of reviewed investment laws. These institutions, such as Cambodia's Municipal Investment Sub-Committees or the Myanmar Investment Commission, aim to prevent grievances from escalating into formal legal disputes.
• The report advises policy-makers to avoid including advance consent to international arbitration in national laws. It suggests that capacity gaps in national courts should be addressed through judicial capacity building or specialized chambers rather than creating parallel arbitral channels, which divert resources from the general justice system.

APA

Ostřanský, J., Nweke-Eze, S. U., & Manikantan, A. (2026). Unpacking National Investment Laws. International Institute for Sustainable Development. https://www.iisd.org/system/files/2026-04/national-investment-laws-dispute-settlement.pdf

Chicago

Ostřanský, Josef, Stanley U. Nweke-Eze, and Abhishree Manikantan. Unpacking National Investment Laws. International Institute for Sustainable Development, 2026. https://www.iisd.org/system/files/2026-04/national-investment-laws-dispute-settlement.pdf.

Wikipedia

{{cite report |last1=Ostřanský |first1=Josef |last2=Nweke-Eze |first2=Stanley U. |last3=Manikantan |first3=Abhishree |title=Unpacking National Investment Laws |publisher=International Institute for Sustainable Development |date=April 2026 |url=https://www.iisd.org/system/files/2026-04/national-investment-laws-dispute-settlement.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{ostansk2026unpacking, author = {Ostřanský, Josef and Nweke-Eze, Stanley U. and Manikantan, Abhishree}, title = {{Unpacking National Investment Laws}}, institution = {International Institute for Sustainable Development}, year = {2026}, month = apr, url = {https://www.iisd.org/system/files/2026-04/national-investment-laws-dispute-settlement.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }