This paper is intended to assess digital transformation in the digital arbitration of investment contract disputes. It pinpoints the very role of the ICSID in the very matter, while making an analysis of modern approaches towards the digital arbitration legal system. In parallel, it stresses out the very ways in which technology modifies mechanisms for digital arbitration between states and investors for efficiency, transparency, and accessibility. The paper will dwell on the uptake of AI-driven legal analytics that help in forecasting case results and making the digital arbitration process quick, which is then followed by the use of digital platforms for case management and the holding of remote hearings. The other part of the paper will discuss how blockchain-based smart contracts enhance the enforcement of digital arbitration decisions through security and immutability concerning contract execution. It also reviews an inquiry into the influence of e-tools over the choice of applicable law, constitution of arbitral tribunals, and the independence and impartiality of arbitrators, with special emphasis on the use of algorithmic-decision-making tools to lessen bias. Challenges such as data security and regulatory lacunae and AI ethics in digital arbitration are critically evaluated alongside efforts being made at an international level to modernize its laws of digital arbitration in a period of full-scale digitalization. The study provides policy options for the integration of AI and digital technologies into the ICSID digital arbitration process through which the actualities of justice, fairness, and procedural conduct can be achieved in the settlement of investment disputes.