Challenges of Foreign Investment Arbitration with Emphasis on The Iranian Legal System

Adam Smith, renowned economist and pioneer of the classical school, mentions the concentration of capital (investment) as a necessary condition for economic development and growth. This means that countries, in order to achieve proper economic growth, have to accumulate and equip capital. For developing countries, including Iran, whose lack of investment is an integral feature, attracting foreign investment to achieve proper economic growth and development is inevitable.But there are several obstacles in the way of transferring this investment, the most important of which are legal loopholes or multiple interpretations. This means that a look at the domestic regulations, especially the Constitution of the Islamic Republic of Iran, indicates the existence of relatively major obstacles to the use of non-governmental systems to resolve disputes arising from investment. Even the use of judicial methods is questionable in terms of the impartiality of each country's domestic courts.Obstacles to resolving a dispute in the general sense means any law, custom or culture that makes it difficult or impossible to reach a compromise between the parties to a private law relationship. This article examines the barriers and challenges of arbitration in resolving disputes arising from foreign investment in the form of barriers arising from constitutional principles, barriers arising from international government immunity, and cultural and practical barriers. This research is applied in terms of purpose and descriptive-analytical in terms of method and nature. The necessary data and information have also been collected through the library method.