How Companies Sue States

Switzerland is one of the ten countries with the highest proportion of direct investments abroad worldwide. Investments are only made after careful consideration and also depend on whether they enjoy sufficient legal protection. Since private investors do not want to rely on local courts, there are bilateral investment treaties (BITs) that provide for any disputes over investments to be adjudicated by an independent arbitral tribunal such as the International Centre for Settlement of Investment Disputes (ICSID). It is therefore crucial for investors and their protection that such BITs exist with the relevant countries. Switzerland has concluded over 120 BITs.

In some cases, however, conflicts can still arise, for example if a state expropriates a company's assets or fails to honour agreements and assurances. If no bilateral solution can be found, the company will try to assert financial claims against the state in court or arbitration proceedings.