Investment arbitration arises in the context of disputes between investors and States in relation to foreign investment activities. This type of arbitration is typically based on bilateral or multilateral investment treaties, as well as investment contracts entered into between the host State and the investor.

Its purpose is to resolve disputes related to the interpretation and application of commitments undertaken in the field of investment, in accordance with applicable international standards and international law. Investment arbitration plays a significant role in international economic law by providing a specialized mechanism for dispute resolution, thereby contributing to legal predictability and the stability of the international investment regime.