Resolving Investment Disputes in the Metaverse:

Challenges and Opportunities for International Arbitration

Atif M. Alenezi

 

ABSTRACT: This article examines the novel challenges of resolving investment disputes in the Metaverse through international arbitration frameworks. As virtual environments attract substantial cross-border investment, traditional legal mechanisms face unprecedented jurisdictional and enforcement complexities. The decentralised, pseudonymous nature of blockchain-based assets fundamentally challenges territorial concepts underpinning investment treaties, whilst the identification of ‘host states’ becomes problematic when platforms operate across multiple jurisdictions simultaneously. Enforceability presents further challenges, with cryptographic access controls and smart contract systems creating technical barriers to traditional enforcement approaches. The article analyses emerging solutions, including blockchain forensics, specialised tribunals, and treaty adaptations specifically addressing virtual investments. It argues that because existing frameworks are rooted in territoriality, they are fundamentally inadequate for Metaverse disputes and that true resolution requires significant legal innovation. Therefore, achieving a balance between investor protection and state regulatory authority in this novel context necessitates a paradigm shift towards digitally-native legal frameworks.