MONTENEGRO’S INTERPLAY BETWEEN THE RULE OF LAW AND INVESTMENT PROTECTION

Abstract

The rule of law plays a significant role in attracting and safeguarding investments, with particular importance in the areas of legal certainty and stability that investors expect and demand. Montenegro's efforts to strengthen the rule of law have been critical in creating a favorable environment for investment protection, especially as the country seeks to align itself with the standards of the European Union. Montenegro is a signatory to numerous Bilateral Investment Treaties (BITs) that provide protection for foreign investors, such as fair and equitable treatment, protection against expropriation and access to international arbitration. These treaties can be seen as Montenegro's commitment to upholding the rule of law in its dealings with foreign investors. However, Montenegro continues to struggle with judicial inefficiency, political interference and corruption, undermining the effectiveness of its legal framework and creating uncertainty around doing business in the country. This paper will analyze Montenegro's legal framework for the protection of foreign investments, emphasizing the key principles of the rule of law that underlie this protection. The analysis will focus on principles such as legal certainty and fair and equitable treatment, which are essential for creating a stable and predictable investment environment. In addition, the paper will examine ongoing disputes against Montenegro, highlighting cases in which the state has been accused of violating these fundamental principles, thereby calling into question the integrity of its legal commitments to foreign investors and their investments.