1. Multilateral reform of ISDS: Possible paths forward
High-Level IIA Conference 2017: Moving to the Next Phase of IIA Reform
9 October 2017; UNCTAD, Geneva (Switzerland)
Multilateral reform of ISDS: Possible paths forward
Mr Colin Brown
Deputy Head of Unit, Dispute Settlement and Legal aspects of Trade Policy
DG Trade, European Commission

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 (Vienna) and 23 to 27 April 2018 (New York)

16. Thank you for your attention
European Commission, DG TRADE, Multilateral Investment Court project:
Contact:
UNCITRAL Working Group III (Investor-State Dispute Settlement Reform):