The Outcomes of Investment Treaty Arbitration

This chapter explores variations in dispute outcomes in investment treaty arbitration. Building on the literature on political institutions, the study places the theoretical importance of actor information about the rules of the game and the resources of the participants at the centre of analysis. Such information shapes the strategy of the players and their relative ability to compete successfully, establishing the basis for hypotheses about variations in dispute outcomes. Drawing on the universe of known disputes, the analysis relies on statistical models and data capable of addressing concurrently the full range of potential dispute outcomes rather than particular categories of wins and losses. States do not just win or lose treaty-based investment disputes; disputes can also be concluded by decisions to discontinue arbitral proceedings and by settlements negotiated between states and investors prior to an arbitral award. Consistent with theoretical expectation, the findings indicate that dispute outcomes vary in response to the evolution of the system of dispute settlement over time, sector of investment, and access to international legal expertise, thereby underlining the pivotal role of information flows in investment dispute settlement.