Abstract

In the framework of international investment law and investor-State dispute resolution, investment arbitration has been the main target of reform, in policy and procedure. In the deliberations of possible international reform options, primarily at the UNCITRAL Working Group III (ISDS Reform), the governments and experts gradually expanded the dispute resolution spectrum beyond arbitration, to consider mediation and dispute prevention mechanisms as viable reforms, with additional economic, legal and good governance benefits. The resulting guidelines and compilations of existing “best practices” provide an abundance of models and proposals for the configuration of effective dispute prevention mechanisms.

However, when such models face the reality of a specific national legal and institutional framework, they are often not met with accommodating capacities, structures or regulations to unlock the desired benefits of dispute prevention. Others are never tested in practice but continue to be promoted as improvements to the existing system. While reform models for dispute prevention continue to be developed and distributed to the ISDS reform streams and through impressive multi-stakeholder work, they often remain relegated to paper and expert debates. Considering the broad recognition of the importance of dispute prevention and mitigation among State and non-State stakeholders, it is natural to question why? 

This article explores whether we are approaching the design of investment dispute prevention mechanisms from the wrong angle, proposing top-down, quasi-normative standards to administrative issues, and how shifting to a tailored, outcome-focused and more agile architecture, could yield lasting solutions. The article opens with an overview of the concept, main elements and typical dispute prevention models developed and proposed at the international level, including UNCITRAL Working Group III, Then the attention turns to specific examples of institutional frameworks in different regions, before zooming into the tailored designs and distinct objectives pursued by Sates in the Western Balkans and in other jurisdictions. Finally, the article explores the building blocks of tailored dispute prevention mechanisms stemming from the analyzed State practice, and the secret ingredients making them viable for a more sustained and effective application, beyond ISDS reform. 

This paper will be part of the TDM Special Issue on "Dispute Prevention in ISDS: Comparative Approaches, Institutional Innovations, and Digital Tools". More information here www.transnational-dispute-management.com/news.asp?key=2086