This article deals with the prospective development of mediation and ADR in cross-border investment disputes. The focus is on foreign direct investment (FDI) and not on other forms of investment such as portfolio, private equity or hedge funding investment. It examines the topic predominantly from the perspective of developing and emerging economies.

The article first links the theoretical importance of cross-border FDI to current trends in the global political economy. It then examines the nature of investment disputes and the appropriateness of different dispute resolution systems. It introduces two case studies from different developing countries and refers to the 2010 UNCTAD report on ADR in investment disputes. The article concludes with some evaluative analysis of the central hypothesis, namely that mediation and other forms of ADR might be appropriate for certain kinds of international investment disputes.