To Settle or to Fight to the End? Case-level Determinants of Early Settlement of Investor-State Disputes

Vu Duy ()
Additional contact information
Vu Duy: VNU-University of Economics and Business, Hanoi, Viet Nam

Review of Law & Economics, 2021, vol. 17, issue 1, 133-166

Abstract: International investment arbitration is a third-party dispute resolution mechanism aimed mainly at depoliticizing investment disputes and maintaining efficient investment flows among countries. Almost one-third of treaty-based investor-state disputes brought before this system are settled before the tribunal’s final ruling. Given the classical “Against Settlement” debate in the legal literature, we build an original database of treaty-based arbitrations from 1996 to 2016 to empirically test the determinants of early settlement. We find that the probability of settlement increases if the host state has no experience of resolving those kinds of disputes but decrease if it anticipates a favorable outcome. The nature of the regulatory measures applied by the host state and the identity of foreign investors are additional important determinants of settlement. Interestingly, we find strong evidence of a Dutch effect in dispute resolution.

Keywords: investor-state dispute; arbitration; settlement; economic analysis (search for similar items in EconPapers)
JEL-codes: F21 F23 K33 K41 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1515/rle-2019-0046 (text/html)
For access to full text, subscription to the journal or payment for the individual article is required.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bpj:rlecon:v:17:y:2021:i:1:p:133-166:n:9

Ordering information: This journal article can be ordered from
https://www.degruyter.com/journal/key/rle/html

DOI: 10.1515/rle-2019-0046

Access Statistics for this article

Review of Law & Economics is currently edited by Francesco Parisi

More articles in Review of Law & Economics from De Gruyter
Bibliographic data for series maintained by Peter Golla ().