International Investment Arbitration in Geopolitical Competition: Analysis of Politicization Trends in Investor-State Dispute Settlement Mechanisms

Abstract

This study examines the transformation of international investment arbitration from a neutral dispute resolution mechanism into a strategic battleground shaped by geopolitical competition. Through comprehensive analysis of paradigmatic cases—the Yukos arbitrations involving systematic tax reassessments, Huawei disputes concerning technology restrictions and sanctions compliance, and Belt and Road Initiative projects facing corruption allegations—the research reveals distinct modalities of criminal law weaponization in investment disputes. The temporal correlation between criminal charges and arbitration proceedings demonstrates strategic rather than genuine law enforcement motivations, with corruption allegations particularly prominent in politically sensitive infrastructure investments. The findings indicate that selective prosecution and political protection mechanisms enable sophisticated manipulation of legal processes to achieve geopolitical objectives. These patterns confirm fundamental structural limitations in the depoliticization promise underlying the investor-state dispute settlement regime. The convergence of criminal allegations with investment disputes transforms legal frameworks into instruments of economic statecraft, generating profound implications for international economic governance as investment protection increasingly yields to national security imperatives and geopolitical alignments in an era of intensifying multipolar competition.