Choosing the Right Court: Forum Shopping for Litigating International Investment Disputes

With increased transnational investment activities, multinational firms and states find their interests conflicted and decide to litigate disputes in international investment disputes courts. Given that there are multiple venues to settle international investment disputes, which court do firms and governments choose and why? We argue that investors tend to choose a system to maximize their interests, and thus consider characteristics of the respondent country and the characteristics of industries that they included. We empirically find that investors tend to proceed with ICSID rule when respondent countries have less direct control their economy and when home and respondent ties are weak.