ABSTRACT
A number of issues are being debated as to whether multilateral investment court system and its specific design features are desirable. This chapter presents the law and economics perspective on this debate and explores basic law and economics theory to describe essential differences between the court system and arbitration, and reviews the available empirical evidence on the functioning of the investor-state arbitration (ISA) mechanism. It examines the theoretical differences between dispute settlement via courts or via arbitration. Bruce L. Benson also seems to be a defender of arbitration. He once indicated that commercial arbitration can be depicted as a cooperative endeavour intended to minimize the costs of dispute resolution. Lars A. Markert points to a few characteristics of ISA which make it different from commercial arbitration. Arbitration practitioners, including arbitrators, legal counsels, experts, and tribunal secretaries, are of crucial importance for the legitimacy of the ISA regime.
