The International Claims Trade

53 Pages Posted: 5 Sep 2019 Last revised: 6 Jun 2022

See all articles by Kathleen Claussen

Kathleen Claussen

University of Miami School of Law; Northwestern University - Northwestern Pritzker School of Law; Georgetown University Law Center, Institute of International Economic Law

Date Written: February 1, 2019


Investments are mobile in the twenty-first century international economy. They are seldom held for their duration by a single owner from a single country. They change hands and they do so for a variety of reasons, often in the course of a dispute. But the scholarship addressing what happens when international investments & legal claims against sovereigns regarding those investments change hands appears only at the margins. The practice of buying and selling claims or claims trading is well known and institutionalized in some areas of domestic litigation. For cross-border investment disputes against sovereigns, however, many of the cases discussing claims trading seek to disguise themselves as addressing other legal issues, leading to a haphazard series of doctrines that tends to obscure the trade. The heightened visibility of all forms of external funding for claims against sovereigns has created challenges for courts and tribunals and for claimants who seek to recover on their investments. This Article analyzes the law of the international claims trade and asks what that law ought to look like in light of the theories and purposes of the international investment legal regime. Contrary to the popular view, it makes the case for secondary market players and then analyzes what should be done about them. It assesses the doctrines advanced by arbitral tribunals and by domestic courts at various stages of international investment dispute settlement involving a traded claim against a sovereign. The Article argues that, often, courts and tribunals are getting it wrong. In doing so, they obscure critical questions about why we have investment law and to what degree claims against sovereigns ought to be marketable. Drawing lessons from domestic law, the Article articulates a positive function for the international claims trade – one that investment law ought to accommodate. Finally, it proposes a way forward for states as they develop new investment instruments.

Keywords: international investment law, claims trading, third party funding

Suggested Citation

Claussen, Kathleen, The International Claims Trade (February 1, 2019). 41 Cardozo L. Rev. 1743 (2020), Available at SSRN:

Kathleen Claussen (Contact Author)

University of Miami School of Law ( email )

1311 Miller Dr
Coral Gables, FL 33146
United States

Northwestern University - Northwestern Pritzker School of Law ( email )

750 N. Lake Shore Drive
Chicago, IL 60611
United States

Georgetown University Law Center, Institute of International Economic Law ( email )

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