ABSTRACT
Domestic courts offer a number of advantages addressing some of the common critiques against investor–state dispute settlement (ISDS). However, domestic courts will only constitute a viable alternative to ISDS if it is a well-functioning and advanced legal system. Indeed, in a number of cases, there might be perceptions that domestic courts are susceptible to local pressures and favour the state over foreign investors. State–state dispute settlement is not markedly different from ISDS in terms of total cost. State–state dispute settlement generally has an equitable cost structure, and states equally share the costs of proceedings. State–state dispute resolution protects the rights of the sovereign to regulate in the public interest and to pursue their own strategic interests. State–state dispute settlement may share many of the same deficiencies as ISDS. All the alternative proposals to ISDS have some level of credibility and advantages but they also have flaws.
