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.