Conflict of Laws Approaches to Regulating Cross-Border Investment Disputes

Abstract

The modern global economy, characterized by continuous change, is profoundly influenced by globalization, which plays a pivotal role in driving the development of international investment relations. Foreign direct investment serves not only as a key driver of economic growth for recipient countries but also as a foundation for their integration into the global economic system. In this context, ensuring legal safeguards for foreign investors and fostering favorable conditions for their operations have become crucial priorities for states aiming to attract capital. Conflict of laws plays a significant role in this process by determining the applicable legal framework in cross-border relations, including investment disputes. It establishes legal mechanisms to reduce uncertainty and balance the interests of investors and host states. In Uzbekistan, foreign investment protection is a cornerstone of state policy. Recent legislative reforms have significantly improved the investment climate and enhanced guarantees for investors. However, practical implementation of these principles often involves resolving conflict of laws issues, such as identifying the governing law in disputes between investors and the state. Together, these create a robust legal framework for addressing conflicts arising between different legal systems. A distinctive feature of Uzbekistan’s legislation is its emphasis on protecting investor rights, reflected in provisions prioritizing international norms over domestic laws and enabling arbitration as a dispute resolution mechanism.