Abstract: In recent years, investor – state arbitration system (ISA) has received a lot of attention and criticism in academic writings. A section of stakeholders have labelled this system as machinery for advancing foreign investors interests at the expense of the host state interests. It is contended that the system is overshadowed with flaws and lacks the necessary values of a legitimate adjudicative system. The often cited flaws in the system includes: lack of mechanism to avoid inconsistent decisions, lack of rules to ensure impartial and independent adjudication process, confidentiality of proceedings despite the fact that the disputes are public in nature and expensive adjudication process. Furthermore the system is condemned for encroaching on governments’ regulatory powers.