Originally from Investment Treaty Arbitration and International Law - Volume 14

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I. INTRODUCTION

This paper does not impugn the efforts of ICSID and UNCITRAL Working Group III regarding the investor-state dispute settlement (ISDS) system as a waste of time.  It is always a worthy goal to consider how dispute resolution systems can be made more efficient, flexible and useful.  The question here, though, is whether their current efforts realistically change anything about the debate over ISDS.  The paper’s contention is that they cannot.

This paper will proceed as follows:

• In Section II, a reminder of how we got here, reviewing the origins of bilateral investment treaties (BITs) (or more generally international investment agreements (IIAs), which term covers agreements which may be multilateral or also deal with subjects other than foreign investment protection).  It also briefly contextualizes ISDS with illustrative comparison to other international law systems.  ISDS has an individual and almost unique position among the systems of international law, and it is from that background the debate on its future emerges.

• Section III discusses the reform efforts of ICSID and UNCITRAL Working Group III.  Consideration is given to the efficacy of the proposals, and whether they meet genuine and deep-seated concerns and needs.

• The paper traverses what is contended to be the heart of the matter in Section IV: as ISDS has become more common-place, resistance to the system has flourished at a substantive level – most notoriously from the European Union (EU).  And one can see from various shifts, including in arbitral tribunal conduct and new treaty ratification, efforts to curtail ISDS’s power.

• Finally, in Section V, some concluding remarks are offered.