Standard of Foreign Investment Dispute Settlement

Investment is one of the ways for States to increasing the income and public welfare. There are two kinds of investments, domestic and foreign investment. Indonesia as one of the developing country is being target of the investor. But, the existence of foreign investment is not always giving positive impact. It also giving negative impact: undermine the environment and investment dispute between corporations or between corporations and host country. For an example: Freeport case which is extended its work contract in Indonesia was not obey the terms that gave by Indonesia government. Another case is investment dispute between corporations because of the contract default. The foreign investment dispute settlement becomes difficult when it involves different legal system between the home country and host country. The involvement of different legal systems is arising question how about regulation standard and procedure of the foreign investment dispute settlement under international law. These problems are analyzed by normative legal research. The result shows that there are some standard of regulation according to foreign investment dispute settlement under international law. First of all, the foreign investment cooperation shall transformed into an international contract which is contain three important elements, such as: choice of law, choice of dispute settlement and choice of forum. Second, the foreign investment dispute could be settled through ICC, UNCITRAL, DSB WTO and ICSID. Selection of the dispute settlement is based on consensus between the parties and shall be transformed into an international contract.