Arbitration has become the most common method for the investor-state disputes settlement (ISDS), and under the current system of ISDS disputes are not settled by a single adjudicative body, instead investment arbitration is conducted by a number of tribunals. The fragmented nature of the system of ISDS and International Investment Law (IIL) coupled with the lack of a regulatory body has given rise to certain concerns of illegitimacy such as the issues of regulatory chill, lack of transparency, consistency and coherence. Considering the significance of the Foreign Direct Investment (FDI) for all parties involved, it is essential to have a legitimate and well-organised system for the adjudication of investment disputes. Furthermore, as investment dispute frequently involve issues that relate to public interest, it is argued that to be considered legitimate the adjudication system should be reliable, predictable, consistent and transparent. The absence of these key features is what creates the legitimacy crisis that the current system is allegedly suffering. Therefore, it is extremely important that the issue of legitimacy of the system of ISDS and possible reforms are thoroughly and comprehensively studied and discussed – this research fulfils this need by evaluating the concept of legitimacy and the concerns surrounding the system of ISDS in great detail.Table of Contents Chapter 1. Introduction1.1. Background1.2. Significance of the Problem1.3. Research Questions1.4. Brief Overview of Literature1.5. Methodology and the Originality of the Research Chapter 2. The Legitimacy of the Investor-State Dispute Settlement (ISDS) System2.1. Introduction2.2. Belief in Legitimacy2.3. Conclusion Chapter 3. The Issue of Regulatory Space in International Investment Law3.1. Introduction3.2. Defining the Right to Regulate3.3. Refinement of Investment Standards3.4. General Exception Clauses3.5. Insertion of Positive Language Regarding Regulatory Interests in International Investment Agreements3.6. Conclusion Chapter 4: The Principles of Transparency and Confidentiality in International Investment Arbitration4.1. Introduction4.2. Current Trends on Transparency in ISDS4.3. Advantages and Disadvantages of the Principles of Transparency and Confidentiality4.4. Balancing Transparency with Confidentiality in ISDS4.5. Conclusion Chapter 5. Issue of Inconsistency and Parallel Proceedings5.1. Introduction5.2. Degree of Consistency and Role of Arbitrators5.3. Factors that lead to the ‘crisis of inconsistency’Chapter 6 – Possible Solutions6.1. Introduction6.2. The Creation of a Multilateral Agreement on Investment6.3. A Case for the Establishment of a Permanent Two-tiered Investment Court6.4. An Interim Measure6.5. Conclusion Chapter 7: Conclusion7.1. Overview of the ResearchBibliography