This paper addresses the legal uncertainty surrounding how arbitral tribunals determine applicable law in investor–state disputes. The research aims to clarify how tribunals balance investor protections with host state regulatory interests by analyzing the interaction between domestic and international legal frameworks. Methodologically, the study uses qualitative content analysis of key International Centre for Settlement of Investment Disputes (ICSID) and non-ICSID cases, including Gami Investments Inc. v. Mexico (2004) and Glamis Gold, Ltd. v. The United States of America (2009), supported by doctrinal sources such as Schreuer (2007) and Coop and Ribeiro (2008). The findings reveal significant inconsistency in the application of domestic and international law, with some tribunals favoring a dual approach, while others prioritize international standards, particularly under bilateral investment treaties (BITs). The study concludes that the absence of a clear legal hierarchy contributes to fragmented decision-making. The paper’s relevance lies in its call for harmonized interpretative guidelines to increase predictability in investment arbitration and strengthen coherence in the application of legal norms.
Sead Mehović (2025) studied this question.