Why Do or Should Foreign Investors Resort to the Courts of the Host Country Prior to Investment Treaty Arbitration? A Study of Two Transitional and Two Well-Established Judiciaries

Abstract

The justification that ITA ensures that investor-State disputes are denationalized has received less empirical attention. Investment law literature has mainly focused on the purpose of ITA for bypassing domestic courts, on ‘fork-in-the-road’ (FITR) clauses, and on introducing an exhaustion of local remedies requirement. Empirical studies that concern the role of domestic courts in IIL have mainly focused on the post-award phase, more specifically on issues surrounding the domestic enforcement and setting aside of international arbitral awards. This chapter, however, departs from these approaches and asks a novel question, which to my knowledge has yet to be discussed in an empirical way in legal academia: Why do or should investors resort to the courts of the host country prior to investment treaty arbitration (ITA)?