Investment Court System Archives - international litigation blog
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Investment Court System

A Watershed Moment for ISDS Reform

Last week marked a watershed moment for the movement to reform investor-state dispute settlement (ISDS). Meeting in Vienna, Delegates to the United Nations Commission on International Trade Law (UNCITRAL) Working Group III (WGIII) agreed to work multilaterally to reform the resolution of investment disputes. Delegates agreed to focus on responding to key systemic concerns with ISDS, as identified in WGIII’s two previous sessions.[1]

WGIII began its work on ISDS in Vienna last year, at its 34th Session. From the start, Delegates divided the process into three broad phases: identifying concerns about ISDS (Phase I); deciding which concerns, if any, were ripe for multilateral reform in UNCITRAL (Phase II); and designing options for reforms responding to any such concerns (Phase III). Phases I and II would be of prime importance in setting the frame. Though additional concerns can always be raised, any agenda for reform would be largely grounded in the problems identified in these early meetings. WGIII began its work identifying concerns with ISDS in 2017 and essentially concluded Phase I at its 35th Session in New York last Spring. By the end of that meeting, WGIII had identified a range of procedural and structural concerns with ISDS, relating to: (i) fragmented arbitral outcomes; (ii) the arbitrators charged with adjudicating disputes; (iii) matters of duration and cost; and (iv) third-party funding.READ MORE

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Report of Third EU Stakeholder Meeting on ISDS Reform

Yesterday (9 October 2018), the European Commission held its third stakeholder meeting on the reform of investor-State dispute resolution (ISDS) mechanisms (see here and here for reports of the two previous meetings).

The goal of this meeting was (prior to the third round of discussions on the ISDS reform which will be held in Vienna (29 October – 2 November 2018) within UNICTRAL Working Group III (Working Group III)) to share with civil society the key aspects of those negotiations.

As was the case in the two previous meetings, Mr. Colin Brown (Deputy Head, Dispute Settlement and Legal aspect of Trade policy Unit) gave an overview of the current state of play, and responded to questions from attendees.READ MORE

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Opinion 1/17 on CETA: Hearing Report

On 26 June 2018, the Court of Justice of the European Union (the CJEU) heard the legal arguments raised by the institutions of the European Union and by some EU Member States in Opinion 1/17 on the compatibility of the Investment Court System (ICS) provided for in the EU-Canada Comprehensive Economic and Trade Agreement (CETA).

As we discussed before, the CJEU is requested to provide an opinion regarding the compatibility of the ICS contained in CETA with respect to: (i) the exclusive competence of the CJEU, pursuant to Article 267 of the Treaty on the Functioning of the European Union (TFEU), to give a binding interpretation of EU law; (ii) the general principle of equality and the practical effect (‘effet utile‘) of EU law; (iii) the right of access to courts; and (iv) the right to an independent and impartial judiciary.

I was unfortunately unable to attend this hearing. However, my friend José Rafael Mata Dona attended the hearing and has kindly provided us with a summary of the main points which were raised.READ MORE

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EU Commission Holds Second Stakeholder Meeting on Multilateral Investment Court

As you certainly know, international discussions are being held within UNCITRAL Working Group III (Working Group III) regarding the establishment of a multilateral investment court (Multilateral Investment Court).

As discussed before (here, here, here, here and here) the establishment of such a Multilateral Investment Court aims to address the numerous criticisms concerning existing investor-State dispute resolution (ISDS) mechanisms.

The first round of discussions took place in November 2017 in Vienna and the second round is scheduled to take place next week in New York City (23-27 April 2018).

As it did prior to the first round of negotiations in November 2017 (see our report), the European Commission (the Commission) held, on 13 April 2018, its second stakeholder meeting in order to discuss and share with civil society the key aspects of the negotiations  and the expectations regarding next week’s discussions in New York.

I was unfortunately not able to attend this stakeholder meeting. However, my colleague Benedict Blunnie has taken part in those discussions and has provided us with a summary of the points which have being raised.READ MORE

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Achmea: Potential Consequences for CETA, the Multilateral Investment Court, Brexit and other EU trade and investment agreements

This article has jointly been co-authored with Isabelle Van Damme

On 6 March 2018, the Court of Justice of the European Union (the CJEU) delivered its long-awaited judgment in Case C-284/16 Achmea. This case raised the issue of whether an arbitration clause in a bilateral investment treaty (BIT) concluded between two EU Member States (intra-EU BIT) is compatible with European Union (EU) law and, in particular, with the autonomy of the EU legal order.

As discussed in two previous posts (here and here), Advocate General Wathelet delivered, on 19 September 2017, an Opinion in strong support of international arbitration. He found that an arbitration clause such as that at issue in Achmea was not incompatible with EU law. The CJEU disagrees.

In this article, we summarise the key findings of the CJEU’s judgment and analyse its potential consequences for the EU-Canada Comprehensive Economic and Trade Agreement (CETA), for the proposed Multilateral Investment Court and for future EU trade and investment agreements (including the future agreement between the European Union and the United Kingdom).READ MORE

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Latest Developments on Multilateral Investment Court – EU Commission Holds Stakeholder Meeting

As I have already discussed in previous articles, the European Commission (the Commission) has been pushing forward a proposal for the establishment of a multilateral investment court (the Multilateral Investment Court) in order to address the numerous criticisms concerning existing investor-State dispute resolution (ISDS) mechanisms.

In essence, the Commission’s proposal aims at dealing with procedural issues arising in the context of ISDS. In this vein the Commission proposes:

(i) The creation of a Multilateral Investment Court which would have exclusive jurisdiction to rule on investment claims and would therefore render forum-shopping and multiple parallel proceedings impossible;

(ii) That this Multilateral Investment Court would consist of a First Instance Tribunal and an Appellate Tribunal;

(iii) That judgments would be made by publicly appointed judges; and

(iv) That proceedings would be transparent; and

(v) That all interested parties would have a right to intervene.READ MORE

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Multilateral Investment Court – Belgium Seeks Opinion to CJEU while EU Commission Requests Authorisation to Open Multilateral Negotiations

As we already discussed in several posts before (here, here, here and here), the European Commission (the Commission) has been pushing forward the establishment of a multilateral investment court (Multilateral Investment Court) in order to address the numerous criticisms concerning the existing investor-State dispute resolution (ISDS) mechanisms.

In essence, the Commission’s proposal aims at dealing with procedural issues arising in the context of ISDS. In this vein the Commission proposes:

(i) The creation of a permanent investment court which would have exclusive jurisdiction to rule on investment claims and would therefore render forum-shopping and multiple parallel proceedings impossible;

(ii) That this permanent court would be composed of a First Instance Tribunal and an Appellate Tribunal;

(iii) That judgments would be made by publicly appointed judges; and

(iv) That proceedings would be transparent and a right to intervene for all interested countries would be provided.

The original idea of the Commission was to institutionalise the system for the resolution of investment disputes within each bilateral investment treaty concluded by the European Union (the EU). Such a system (called the Investment Court System (ICS)) was the method followed during the negotiations for the EU-Canada Comprehensive Economic and Trade Agreement (CETA). The Commission, however, has since realised that, in the long run, this approach would lead to a duplication of the system (since there would be one ICS for each of the different investment treaties entered into by the EU) as well as further administrative and budgetary complexities. In order to address this issue, the EU decided to push its proposal one step further and suggested that, instead of negotiating bilateral ICS, it would seek the establishment of an international court which would have jurisdiction to hear investment disputes.

The idea has received a positive echo from the United Nations Commission on International Trade Law (UNCITRAL) in July 2017. Indeed, UNCITRAL has agreed to consider a possible reform of the existing ISDS mechanisms and to act as a forum for negotiations in order to consider a reform of the existing systems.

In anticipation of those negotiations (which are scheduled to begin shortly), the Commission published, on 13 September 2017, a Recommendation (the Recommendation) for a Council Decision authorising the opening of negotiations for a Convention establishing a Multilateral Investment Court.

This Recommendation (adopted pursuant to Article 218 of the Treaty on the Functioning of the EU) aims (i) at allowing the Council of the EU to authorise the opening of negotiations for the establishment of a Multilateral Investment Court; and (ii) at appointing the Commission as EU representative during those negotiations.READ MORE

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