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Towards Multilateral ISDS Reform: A Path Forward

Explore a new framework for investment dispute settlement with objectives like predictability, transparency, and fair administration of justice. Learn about a possible Multilateral Investment Court and the need for achievable goals. Get insights into UNCITRAL's next steps in ISDS reform.

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Towards Multilateral ISDS Reform: A Path Forward

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  1. High-Level IIA Conference 2017: Moving to the Next Phase of IIA Reform 9 October 2017; UNCTAD, Geneva(Switzerland) Multilateralreform of ISDS: Possible pathsforward Mr Colin Brown Deputy Head of Unit, Dispute Settlement and Legal aspects of Trade Policy DG Trade, European Commission colin.brown@ec.europa.eu

  2. Outline • Background • The need for a multilateral reform of ISDS • Objectives • A possible Multilateral investment court • Possible next steps

  3. Background • Public policies can be challenged. Importance of legal correctness and acceptability. • Importance of impartiality, independence and lack of conflicts of interest to ensure acceptability and legitimacy.

  4. Background • Investment disputes involve a different paradigm to commercial disputes typically being solved through ad hoc commercial arbitration. • Public law issues involve a vertical relationship between government and investor. • Effective and fair administration of justice as a public good. "Justice must not only be done, but seen to be done."

  5. Background • Public law matters are normally solved by permanent institutions generally with an appeal. • Specific factual patterns repeatedly being tested against fixed, broad standards. Importance of consistency and predictability for investors and governments.

  6. Background • Traditional ISDS is problematic: • Ad hoc constitution of tribunals • Lack of predictability • Very limited review • Frequent lack of transparency • High costs

  7. The need for multilateral reform • Different responses from different countries to address problems that largely affect all countries. • Current momentum to engage in discussions to multilaterally reform investment dispute settlement. • Need to focus work on achievable goals that have a wide positive impact for all.

  8. Objectives Time to consider a new framework for investment dispute resolution that is: • Permanent, independent and recognised as legitimate by citizens. • Predictable, delivering consistent case-law in the interpretation of substantive standards, where possible.

  9. Objectives Time to consider a new framework for investment dispute resolution that: • Allows for an appeal to correct legal and factual errors • Transparent • Efficient

  10. A possible multilateral investment court • First instance and appeal permanent tribunal • Full time salaried adjudicators • High qualifications and ethical requirements • Effective enforcement procedures

  11. A possible multilateral investment court Open to all interested countries • Opt-in system (Mauritius Convention approach) • Efficiency • Financing • Contributions by Contracting Parties based on the level of development • Other forms of financing (consider user fees?)

  12. A possible multilateral investment court Special provisions for developing countries and SMEs • Developing countries • Advisory centre • SMEs • Small claims/simplified procedures

  13. Possible next steps UNCITRAL Working Group III will proceed to : • Identify and consider concerns regarding ISDS; • Consider whether reform was desirable in light of any identified concerns; • If the Working Group were to conclude that reform was desirable, develop any relevant solutions to be recommended to the Commission. (…).”

  14. Possible next steps UNCITRAL: Mandate of WG III (July 2017) “The Commission entrusted Working Group III with a broad mandate to work on the possible reform of investor-State dispute settlement (ISDS). In line with the UNCITRAL process, Working Group III would, in discharging that mandate, ensure that the deliberations, while benefiting from the widest possible breadth of available expertise from all stakeholders, would be government-led with high-level input from all governments, consensus-based and be fully transparent."

  15. Possible next steps • Any successful process needs to ensure that other international organisations are meaningfully involved. • UNCITRAL discussions must count on the experience and expertise of such other organisations (e.g. UNCTAD, OECD, PCA, ICSID, WTO). • Working Group III – 27 Nov. to 1 Dec. 2017 (Vienna) and 23 to 27 April 2018 (New York)

  16. Thank you for your attention European Commission, DG TRADE, Multilateral Investment Court project:http://trade.ec.europa.eu/doclib/press/index.cfm?id=1608 Contact: TRADE-F2-MULTILAT-INVEST-DS@ec.europa.eu UNCITRAL Working Group III (Investor-State Dispute Settlement Reform): http://www.uncitral.org/uncitral/en/commission/working_groups/3Investor_State.html

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