Foreign Investors, Domestic Courts and Investment Treaty Arbitration

Supporters of ISDS often justify the continued existence of ISDS on the basis that disputes are denationalized, thus keeping foreign investors out of domestic courts which may lack independence, be less efficient, or are biased against foreigners. This justification, unwittingly perhaps, strengthens a perception that foreign investors proceed directly to the international sphere. However, this chapter finds that many investors do avail themselves of domestic courts prior to an ISDS case and asks why this is the case. Looking at two states with transitional judiciaries and two states with well-functioning judiciaries, the author uncovers a rich data on the impressive scope of claims brought by foreign investors in the host states where they are investing; and Gáspár-Szilágyi concludes with some reflections on the role of domestic litigation in the legitimation of ISDS. (This abstract needs development)