LEGAL PROTECTION AGAINST THE FAILURE TO COMPENSATE ON INTERNATIONAL INVESTMENT DISPUTE

A dispute between two or more countries involved in a foreign investment may arisesfrom investment agreement agreed upon by the parties. If one of the parties breachesthe agreement, the parties will automatically agree to resolve the dispute to the agreedarbitration forum based on the dispute settlement clause on the agreement, thoseforum such as the ICSID arbitration. Therefore, the existence of dispute settlementclause on an investment agreement (Bilateral Investment Treaty) is very necessary.The result of the above-mentioned arbitration proceeding is a binding and finaldecision for the parties. An arbitral award, should contain relief or compensationset by the arbitrator as the result of the proceeding. The reliefs are given as orders toindemnify the damages obtained by Claimant. Issues arises when Respondent has beenproven to have done detrimental damage to the Claimant yet Respondent deliberatelyneglected his/her obligation to compensate Claimant accordingly based on the relief/compensation specified in the award. The non-compliance of the Respondent tofulfill the compensation obligation is due to the fact that the party habitually assumethat the arbitration award does not have the legal force equivalent to the decisionof general court, even though the nature of the award is final and binding. Thus theinterests and rights of the Applicant who has been declared entitled to compensationbased on the arbitration award must be protected so that their rights can be fulfilledaccording to the law.