Investment-treaty arbitration is a Dispute Resolution process between a host state and a foreign investor, usually governed by International Investment Agreements (“IIA”) such as Bilateral Investment Treaties (“BIT”) or Multilateral Investment Treaties (“MIT”). When an investor seeks to bring a claim against host states before an Investment Arbitral Tribunal, the host states often take the defence of ‘investor illegality’, to protect themselves from liability towards the investors. Here, the host states argue that since the foreign investor obtained the investment within the host state through illegal means, such as bribery of the host state’s officials, such investments should not be protected by the governing IIA. This would relieve the host states of any potential liability. Although the very definition of acts such as bribery is also debated, the focus of this piece is only on the effects of a finding of such illegalities over the dispute settlement process.