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Welcome / Blog Archive / Book Review / 2021-04-doc2 Multinational Enterprises and the Law – 3rd ed. by Muchlinski

2021-04-doc2 Multinational Enterprises and the Law – 3rd ed. by Muchlinski

Recently, the third edition of Multinational Enterprises and the Law was published. It is the seminal work of Peter T. Muchlinski, Emeritus Professor in International Commercial Law at the School of Oriental and African Studies (SOAS), University of London. The first edition was published more than a quarter of a century ago – in 1995 (Wiley-Blackwell, 648 pages), the second edition saw the light in 2007 (OUP, 720 pages) and it took again over a decade for the third edition to be released (OUP, 912 pages). With my Leiden University colleague Ilya Kokorin we glanced through the book and discussed a few highlights.

Main contents

The book consists of four large parts. Part I lays down the conceptual framework and looks into the definition of a multinational enterprise (MNE), its rise through history and the factors which can be attributed to the growth of MNEs in modern times. It also examines various legal forms or arrangements employed by multinationals, from those based on a contract (e.g. distribution and production agreements) to corporate-law enabled groups of companies, and other forms, such as strategic alliances and joint ventures. The remaining chapters in this part introduce the regulation (sources and theories) and jurisdiction, outlining the limits of national and regional jurisdiction over MNE activities, an issue that consistently arises throughout the specialized areas of regulation covered in the remainder of the book.

Part II deals with the main areas of (macro) economic regulation of MNEs, covering the topics of control, liberalization and promotion of inward investment (e.g. bilateral and regional arrangements, OECD Codes, WTO agreements), taxation (e.g. tax incentives and tax havens, regulation of tax avoidance, corporate social responsibility (CSR) aspects), group liability and directors’ duties in groups of companies (e.g. liability of companies and directors), corporate governance and disclosure (e.g. internal governance, external oversight, accounting standards), regulation of multinational banks pre- and post- global financial crisis of 2008 (this chapter was not in the previous edition and constitutes a valuable addition made by Dr. Ebbe Rogge, an Assistant-Professor at Leiden University), competition (regulation of M&As, merger control, abuse of a dominant position, etc.), intellectual property and technology.

Part III examines the social dimension of MNEs and discusses labour relations (globalization and changing labour practices, supply chain liability, combating modern slavery), human rights (business and human rights, state duty to protect, access to remedies, etc.) and environmental issues (e.g. sustainable development and state responsibility).

Part IV addresses the contribution of international investment law to MNE regulation and to the control of investment risks, covering the main aspects of international investment law, the development of international investment agreements and investor-state dispute settlement, including their interpretation by international tribunals, the process of investor-state arbitration, and how concerns over these developments are leading to reform proposals.

The book as the beacon

The third edition of Multinational Enterprises and the Law is an excellent authoritative text from a leading expert in the field. It analyses multinational enterprises from an interdisciplinary perspective, incorporating legal, political and economic viewpoints. When it comes to the sheer breadth, there are very few books like this one. It covers a vast variety of topics and areas, characterising the complex regulatory environment for multinational enterprises, from tax, competition and corporate law to human rights and environmental protection. It pays attention to the multi-layered regulation of MNEs, including national, regional, international regulation, as well as self-regulation. It also dives into history, politics, economics, ideology and law. This unique approach allows the reader to study the phenomenon of MNEs from multiple angles and to have a better grasp of their past, present and the future. Muchlinski notices the current trends towards greater controls over foreign direct investments (e.g. Regulation (EU) 2019/452), increasing emphasis on CSR, the development of new technologies and business models, giving rise to digital corporations as a new type of MNEs.

The book is eloquently written and is easy to follow and understand. It clearly explains complex topics and masterfully links them together in a coherent narrative. Separate chapters are accompanied by “Concluding Remarks”, summarising the main ideas and conclusions. It should be accessible to those without prior knowledge in the topic, and therefore is suitable for teaching purposes. It will also be of interest to a much broader audience, with and without law background. Among its users and readers we see researchers, as well as practitioners of international economic law, business, corporate and commercial law, development studies, and international politics.

Insolvency law

In this blog the lens is always on (cross-border) insolvency law. Although Muchlinski recognises that an extensive analysis of certain questions could not be performed due to space limitations, the choice made is not always fortunate. For example, insolvency of MNEs is only briefly mentioned in the chapter related to liability of directors of MNEs. This is despite the fact that since the previous edition of the book (2007), major changes have occurred in the area of cross-border group insolvencies. These include the publication in 2010 of Part three of the UNCITRAL Legislative Guide on Insolvency Law, focusing on the treatment of enterprise groups in insolvency, adoption in 2015 of the European Insolvency Regulation (Regulation (EU) 2015/848) with a whole new chapter on insolvencies of groups of companies, release in 2019 of a separate UNCITRAL Model Law on Enterprise Group Insolvency, and the proliferation of restructuring procedures with legal tools targeting group restructurings (e.g. third-party releases).

These developments sought to address the lack of efficient insolvency law tools to preserve synergies and value within enterprise groups in financial distress, exemplified by insolvencies of Parmalat and KPN Qwest. Besides, since 2007, the adoption of new tools for MNE insolvencies has been prompted by the collapses of such large enterprise groups as Lehman Brothers and Nortel Networks, only briefly mentioned in the book. We suggest that in the next edition more emphasis can be placed on the failure of MNEs, as it may (and does) have a substantial and long-lasting effect on the society and require special national and cross-border responses.

The brevity of the analysis of certain areas of law and regulation, however, does not undermine the validity of conclusions made throughout Multinational Enterprises and the Law, its contribution to the academic debate and its use as an excellent source for practitioners.

Peter T. Muchlinski, Multinational Enterprises and the Law, 3rd ed., Oxford University Press, 2021. ISBN 9780198824145.

Note: this book I received free of charge from the publisher with the request to announce it or to review it on my blog at