Investments have always been exposed to a degree of risk. The present article, based on the author’s presentation at the conference “Sir Hersch Lauterpacht ‐ Lawyer of Two Cultures”, organized by the Embassy of the Republic of Poland and the Lauterpacht Centre for International Law of the University of Cambridge on 5‐6 November 2008, examines the element of risk, inherent in any investment project, as it has been delineated through international investment arbitration. The main focus is on the duty, on the part of the investor, to make a risk-assessment and act in good faith. These duties, however, do not mean ipso facto that the investor is responsible for any occurrence that may damage the investment. It is at this point that tribunals bear an important obligation to balance investor and host State interests.