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The Politics of Investor-State Dispute Settlement: How Strategic Firms Evaluate Investment Arbitration

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Handbook of International Investment Law and Policy

Abstract

The spread of investor-state dispute settlement is attributed to two key motivations: assisting host states in overcoming credible commitment problems and enabling home states in depoliticizing disputes. This chapter evaluates the mixed evidence for both arguments. It then focuses on the multinational firm to examine how strategic firms may utilize investor-state arbitration to further their objectives in global operations and manage political risks. Access to investor-state arbitration strengthens the political risk management toolkit of firms. The biggest effect on firms may be related to their bargaining with governments and the settlement of investment disputes that do arise rather than on influencing firms’ investment decisions in the first place or preventing disputes altogether.

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Acknowledgments

I would like to thank Veronika Korom and the editors for comments on earlier drafts.

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Authors and Affiliations

  1. ESSEC Business School, Singapore, Singapore

    Srividya Jandhyala

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  1. Srividya Jandhyala
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Correspondence to Srividya Jandhyala .

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Editors and Affiliations

  1. School of Law, City University of Hong Kong, Kowloon, Hong Kong

    Julien Chaisse

  2. School of Business and Law, University of Portsmouth, Portsmouth, UK

    LeĂŻla Choukroune

  3. Institute of Malaysia and International Studies, National University of Malaysia, Bangi, Selangor, Malaysia

    Sufian Jusoh

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Jandhyala, S. (2020). The Politics of Investor-State Dispute Settlement: How Strategic Firms Evaluate Investment Arbitration. In: Chaisse, J., Choukroune, L., Jusoh, S. (eds) Handbook of International Investment Law and Policy. Springer, Singapore. https://doi.org/10.1007/978-981-13-5744-2_72-1

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