Investment Protection in Disputed Maritime Areas

In: The Journal of World Investment & Trade
Author: Peter Tzeng1
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  • 1 Foley Hoag LLP, Washington, DC, USA

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Abstract

Disputed maritime areas are often sources of valuable natural resources, but they are also often sources of conflict. It is thus important for investors investing in such areas to know the array of investment protection mechanisms available to them. This article examines four such mechanisms (dispute settlement under international investment agreements (IIAs), dispute settlement under the United Nations Convention on the Law of the Sea (UNCLOS), dispute settlement under contracts, and political risk insurance) in the context of three scenarios of disputed maritime areas (unregulated areas, joint development areas, and provisionally delimited areas). It concludes that dispute settlement under IIAs and UNCLOS face significant obstacles not only on jurisdiction and admissibility, but also on the merits. As a result, the most practical solution for investors is to rely on dispute settlement under contracts or political risk insurance to protect their investments.