Forum Shopping: Facing Expropriation, Foreign Firms’ Choice between Domestic Litigation and International Litigation Open Access

Abstract

Investor-state dispute settlement (ISDS) was created to provide a platform for international investors to pursue compensation from alleged discriminatory practices by host states. Despite its advantages of being impartial and transparent, some foreign firms continue to litigate in host states’ domestic courts. This thesis intends to unravel the motivation behind firms’ choices to litigate in one legal forum over the other one. With detailed research on ten cases, this thesis illustrates the relationship between three independent variables (host state’s  judicial independence, firms’ political connectedness with the host state authority, the strength of the bilateral investment treaty (BIT) that are applied or can be applied by the firm in trials) and the dependent variable (firms’ forum choices). The results show that as firms become more politically connected, they are more likely to sue domestically and that stronger BITs can attract firms to litigate through international judicial process. However, host states’ higher judicial independence does not make investors more likely to resort to domestic courts. 

Table of Contents

Introduction …………………………………1

Section I. Theory …………………………...10

Section II. Hypothesis ………………………22

Section III. Research Design ………………..22

Section IV. Results ………………………….28

Section V. Discussions …………………...…33

Section VI. Conclusions …………………….38

Appendix ……………………………………41

About this Honors Thesis

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School	Emory College
Department	Political Science and Mathematics
Degree	B.A.
Submission	Honors Thesis
Language	English
Research Field	Political Science, International Law and Relations Political Science, International Relations Political Science, General
Keyword	Foreign Direct Investment (FDI) Bilateral Investment Treaties (BIT) Investor-State Dispute Settlement (ISDS) Countries' Domestic Legal System
Committee Chair / Thesis Advisor	Eric R. Reinhardt, Emory University
Committee Members	Kelli Lanier, Emory University Michael Carr, Emory University

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