Investment Contracts: Balancing Investor Rights and State Sovereignty in the Era of Sustainable Development

The article provides a comprehensive study of the legal nature of investment contracts and their role in resolving disputes between foreign investors and host states. The author analyzes the historical evolution of contractual mechanisms for investment protection, identifying specific characteristics of investment contracts that distinguish them from ordinary private law agreements. Particular attention is paid to key protective clauses (stabilization, arbitration, choice of law provisions), their legal significance and modern transformation under the influence of sustainable development and human rights protection requirements. The article examines in detail the concept of internationalization of state contracts, its theoretical foundations, and critiques. Based on the analysis of arbitral practice (Texaco v. Libya, Burlington v. Ecuador, Chevron v. Ecuador, etc.), the author traces the evolution of approaches to balancing investors’ interests and states’ sovereign rights. The methodological basis of the research consists of comparative legal and historical legal methods. The study concludes that there is a need to develop balanced mechanisms that simultaneously ensure the stability of investment projects while recognizing states’ legitimate regulatory powers in areas of public interest. The paper demonstrates that modern contract practice is moving away from absolute investor protection toward a more nuanced approach that accommodates both commercial and public policy considerations.