Foreign investors refer to arbitration for resolving their disputes with the host states. Recent practice demonstrates that the arbitral tribunals are often confronted with the question of legality of investment. This issue has been addressed at different stages of arbitral proceedings. The tribunals have rejected jurisdiction, denied admissibility of the claim or considered the illegality on the merits stage.
The aim of the research was to determine an appropriate stage for considering investment wrongdoing. The thesis demonstrates that this issue is significant for the parties, as well as for the investment arbitration in general. It concludes that investment wrongdoing shall not be regarded as a jurisdictional matter, unless the link between the legality of investment and jurisdiction is explicitly provided in the applicable treaty or contract.