INTERNATIONAL INVESTMENT ARBITRATION AND BILATERAL TREATIES ON PROMOTION AND PROTECTION OF FOREIGN INVESTMENTS (Medzinarodna arbitraz investicnych sporov a dvojstranne dohody o ochrane investicii)

Direct foreign investments create an inseparable part of international economy. The core of all 'FDIs' lies in the transfer of foreign investor's both tangible and intangible assets from one country to another country with the aim of use of these assets in a host state, while bearing in mind the main goal to gain the profit. Simultaneously, the owner of the FDI will retain the whole or at least the partial control over transferred assets, located in the host state. The article submitted focuses on a small aspect of the puzzle of how the international investment arbitration interacts with bilateral investment treaties, or so called 'BITs'. Specifically, it will consider the development as well as the current position of BITs while focusing on one of the most important BIT's provision, namely, the settlement of investment disputes. First, the article provides a background on the definition of foreign investments together with the short characteristics of the foreign investment under the rules that have crystallized over the years. Secondly, the article will address an issue of risk in foreign investments, spreading before the reader several categories of risk investors have to cope up with when investing abroad. The article then analyses the issue of the state's responsibility when actively participating in international trade, dividing between public acts of the state and its purely commercial and private acts. After defining an international investment dispute, the article then incorporates basic features of investment arbitration, stressing out the complicated matter of the state's capability to be the party in the arbitration agreement. The article then gathers the basic characteristics of the BITs, going back awhile to the era of the first FCN concluded in the USA, continuing with the description of modern BITs. In addition, the article ultimately comments on the current controversial doctrines regarding the role of the BITs in international investment and the progress of less developed host states. Finally, it develops a model formula, laying down the circle of interconnected relationships between multinational corporations, foreign direct investments, the international investment arbitration and the international public law. At the very end, the article suggests a reasonably considered role of the BITs and its influence on the international foreign investment law.