Beyond finality: post-award bargaining and asymmetry in investor–state dispute settlement

Abstract

Recent scholarship questions the finality of investor–state awards. This article explains how enforcement pressure converts awards into bargaining leverage and why the resulting settlements take different forms. Comparing the post-award settlements in Tethyan and CMS through process tracing, it finds that enforcement pressure was a necessary, though not sufficient, condition of both. Comparable pressure nonetheless led to project revival in Tethyan but a financial settlement in CMS, reflecting each case’s political economy, notably the asset’s value to the host state and whether the investor sought to return. A contrast with Karkey suggests that state counter-leverage conditions an award’s worth. Drawing on political economy, bargaining theory, and Third World Approaches to International Law, the article explains why both states settled under structural dependence rather than unconstrained consent. Within the visible, litigated subset of cases, arbitration emerges as a mechanism that reallocates bargaining power rather than delivering final, depoliticized dispute resolution.