This CIDS project on ISDS reform has developed against the background of the criticism that has emerged over the last years towards investor-State arbitration. States and other stakeholders have begun to reflect about both the achievements and shortcomings of the existing ISDS system, reacting in different ways to its perceived limitations. Against this backdrop, a move for reform has developed over the past years, which currently has the United Nations Commission on International Trade Law (UNCITRAL) as the focal point of discussions.
The CIDS project seeks to provide fact-based study of the concerns over the ISDS system as well as contribute analysis and ideas for concrete reform proposals going forward. While the options for the reform of the ISDS regime are multiple and are ultimately for policy-makers (i.e., States) to make, the CIDS aims to accompany the ongoing discussions between stakeholders which are likely to touch on systemic and other complex issues of investment law, treaty law, and international dispute settlement.
With those objectives in mind, the CIDS has contributed two research papers to UNCITRAL and organized or co-organized a series of seminars or workshops. It has also facilitated the creation of an Academic Forum on ISDS, which comprises a number of leading academic experts in the ISDS field.
The first CIDS report, co-authored by Gabrielle Kaufmann-Kohler and Michele Potestà, was issued on 3 June 2016. It considers the perceived need and possible options for reforming ISDS. It outlines the current features of ISDS and the commonly raised issues underlying calls for reform, such as the perceived lack of legitimacy of the system, arbitrators’ appointment, the costs of the system for the actors involved, the lack of a review mechanism and of transparency. It also describes the previous and current initiatives proposed by States, inter-governmental organizations and other stakeholders to reform the current ISDS system.
It then explores two options for reform of the ISDS framework: a multilateral investment court, referred to as the International Tribunal for Investments (ITI) and/or an Appeal Mechanism (AM) for investor-State arbitral awards me. Further, the study analyses whether a mechanism similar to the one of the United Nations Convention on Transparency in Treaty-based Investor-State Arbitration (the “Mauritius Convention”) could be used to extend the application of any such reform to the 3000+ investment treaties in existence. By so doing, the CIDS report proposes a roadmap that could be followed should there be an endeavour to undertake a reform of ISDS on a multilateral basis.
At its annual session held in New York in July 2016, the UN Commission on International Trade Law (UNCITRAL) heard an oral presentation of the CIDS report. UNCITRAL also considered a note providing an update on the research and a short overview of its conclusions (A/CN.9/890 link to UNCITRAL document/page).
As the title suggests, this report analyzes in more depth one of the aspects addressed in the first report, namely the composition of a multilateral investment court and of an appeal mechanism for investment awards.
It seeks to identify issues that could arise in this respect if States were to consider setting up a permanent or semi-permanent body for the settlement of investment disputes. For that purpose, the study presents a comparative analysis of the composition of existing international adjucatory bodies and in part also arbitral institutions, and seeks to chart the main options for the composition of a prospective international investment tribunal and appeal mechanism.
The purpose of the Forum is for academics active in the field of ISDS to exchange views, explore issues and options, test ideas and solutions, and hopefully make a constructive contribution to the ongoing discussions on possible reform of ISDS, in particular discussions in the context of UNCITRAL’s Working Group III (WGIII).