Abstract: The Shanghai Cooperation Organization (SCO) has emerged as a pivotal platform for China to shape the practice of international organizational law, particularly in the context of regional security and economic integration. Despite the SCO Charter’s commitment to peaceful resolution of disputes, the absence of a dedicated mechanism for investment disputes settlement poses a growing challenge. As cross-border investments among SCO member states expand, the frequency, complexity, and financial stakes of disputes have risen accordingly. Such disputes often involve sensitive issues such as energy infrastructure, sovereign guarantees and regulatory expropriation, necessitating a structured yet flexible resolution framework. This study argues that the SCO should establish a multi-tiered dispute resolution system tailored to the shared legal traditions and economic priorities of its member. First, the mechanism should prioritize consultation and mediation consistent with the consensus-driven ethos of the SCO. Second, it should incorporate quasi-judicial procedures to address high-stakes claims while avoiding the politicization associated with traditional investor-state arbitration. Crucially, the system must harmonize domestic judicial remedies with international procedural norms, ensuring enforceability without undermining state sovereignty. Furthermore, the paper examines procedural coordination challenges, including forum selection, parallel proceedings and post-award enforcement. It proposes institutional reforms to mitigate conflicts between domestic laws of SCO members and emerging international investment rules. For China, proactive engagement in shaping this mechanism aligns with its strategic priorities in regional economic governance and reinforce the SCO’s role as a rule-maker in the international legal order.