Legal Foundations of Investor-State Disputes
A dispute between an investor and the state arises when a state action or decision affects the investor's rights — expropriation of property, the terms of compensation, repatriation of profits, or restrictions on activity. The substantive foundation of such disputes is embedded in the law on investment activity: it defines what counts as an investment, who is an investor, which rights and guarantees the investor receives, and under which conditions deprivation of property is permissible. Establishing a violation of precisely these norms reveals the state's obligation and creates the basis for a compensation claim.