Does domestic legal tradition affect international cooperation and legalization? Recent studies indicate that states with Islamic law tradition (ILT) prefer more informal forums to resolve international disputes, compared to states with other legal traditions. We examine this claim in the context of the increasingly important global investment regime. We argue, specifically, that international investment agreements (IIAs) concluded by ILT states are less likely to refer disputes to the highly legalized and formal Centre for the Settlement of Investment Dispute (ICSID), and are more likely to refer them Islamic forums, which tend to be less formal. Employing new data on forum choice in investor-state dispute settlement (ISDS) provisions in more than 2,600 IIAs and controlling for a battery of alternative explanations, we find substantial empirical support for the theoretical expectations. These findings underscore the significance of domestic legal traditions to international dispute settlement in the Islamic world and beyond.
Bibliographical noteFunding Information:
We thank Lotem Bassan-Nygate, Timm Betz, Enav Birnbaum, Tomer Broude, Asif Efrat, Dan Eran, Emilia Justyna Powell, Kyla Tienhaara, participants of a Workshop on Domestic Political Changes and International Agreements held at the University of Haifa (2018) and a workshop on International Economic Agreements held at the Hebrew University (2019), the anonymous reviewers, and the Editors of RIPE for helpful comments and suggestions. We also thank Nir Kosti and Idan Nisani for valuable research assistance.
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- Islamic law states
- international investment agreements
- investment arbitration forums
- investor-state dispute settlement
- legal tradition