TDM Call for Papers: "Reform of Investor-State Dispute Settlement: In Search of A Roadmap"
1 July 2013
Update January 2014: TDM 1 (2014) - Reform of Investor-State Dispute Settlement: In Search of A Roadmap has been published.
We are pleased to announce a forthcoming TDM special issue: "Reform of Investor-State Dispute Settlement: In Search of A Roadmap."
Edited by Jean E. Kalicki (Arnold & Porter LLP and Georgetown University Law Center) and Anna Joubin-Bret (Cabinet Joubin-Bret), this special issue will explore recent calls for reform of the investor-State dispute settlement (ISDS) system, along with the viability of five "reform paths" recently proposed for discussion by UNCTAD, the United Nations Conference on Trade and Development (see UNCTAD IIA Issues Note, "Reform of Investor-State Dispute Settlement: In Search of a Roadmap," 29-30 May 2013, available at http://unctad.org/en/PublicationsLibrary/webdiaepcb2013d4_en.pdf).
Other voices and institutions have made different proposals or offered different approaches towards organizing the debate. This Special Issue is not bound to the structure set out in the UNCTAD Issues Note, but the organizing approach taken by UNCTAD is a useful starting place in search for concrete ways forward.
As use of international arbitration to resolve investor-State disputes has increased exponentially over the past few decades, so too has debate about the current system. The UNCTAD Issues Note, which is the latest of several efforts to spearhead reform, identified several concerns that have been repeatedly discussed in various fora, including complexity of the system of international investment agreements (IIAs) and contradictions between arbitral awards leading to inconsistent interpretation of investment protection standards and unpredictability of outcomes, difficulties in correcting "erroneous" arbitral decisions, and questions about the independence and impartiality of arbitrators and the costs and time of arbitral proceedings, all leading to broader questioning of the legitimacy and adequacy of the ISDS system to current international economic relations.
Following a series of formal and informal conversations with various ISDS stakeholders, the UNCTAD Issues Note identified five broad paths toward reform of the system:
- Promoting alternative dispute resolution;
- Tailoring the existing system through individual IIAs;
- Limiting investor access to ISDS;
- Introducing an appeals facility; and
- Creating a standing international investment court.
Earlier papers and discussions have also identified concrete ways forward in supporting access to ISDS for small and medium enterprises (SMEs), establishing an advisory centre for small economies patterned on the WTO Advisory Centre (see recent UNASUR institution) and better control of third party funding as possible ways forward. Some of the proposals are systemic in nature, i.e., would respond to issues relating to the ISDS system per se, as it is currently established and operating, while others are more technical and procedural and address issues such as repeat appointments in arbitration, party versus institution appointments, how to deal with issues conflict and to address the need for reasoned decisions, the utility of dissenting opinions and the skyrocketing of costs.
The forthcoming TDM Special Issue is intended to encompass the many possible responses to UNCTAD's proposal and other reform efforts, by gathering the views of experienced practitioners, arbitrators, academics, public officials, and policy-makers and advocates on the advantages, disadvantages, and viability of each of the paths that UNCTAD and others have identified to reform the ISDS system (to the extent needed). Possible topics for submission would include exploration of any of UNCTAD's five identified paths forward (listed above), although we also encourage developing other concrete ideas. Topics could include but are not limited to the following:
- Background to the debate: the salient features of the mechanisms that predated the current ISDS system (chiefly national court litigation and diplomatic protection resulting in State-to-State proceedings), and the perceived limitations of those mechanisms, leading to development of alternative models in place today. Has the current system resolved those earlier concerns, while perhaps replacing them with new ones? Are prior systems becoming more attractive than in the past, or is the momentum towards a "new" (third-generation) alternative? Is the current system still adapted to a globalized world economy and financial crisis in industrialized countries?
- Is there room for reexamining the role of domestic courts to settle disputes involving foreign investors and host States? What about the decisions by Australia and several other countries to walk away from international arbitration in investment treaties?
- Defining "legitimacy" in a system with multiple stakeholders: who defines it and how? What are the key parameters, and how should success or failure be measured?
- Has the ISDS system proven its ability to address concerns and criticisms relating to legitimacy and transparency? What about the reforms on transparency undertaken in treaties and by various institutions in the last decade? Have they adequately addressed the perceived transparency deficit?
- The implications of "inconsistent" results in past cases; is there a move towards a jurisprudence constante notwithstanding the absence of binding precedent? What drawbacks might there be to systems that promoted consistency, perhaps at the expense of evolution in jurisprudence and in the absence of unified treaty rules?
- The expanded use of annulment and set-aside to correct "erroneous" awards, and related concerns about the breadth of ICSID annulment procedures; how does this reflect on the concerns of legitimacy and adequacy of the ISDS system?
- Independence and impartiality of arbitrators: are different "rules" or "guidelines" required, or simply different mechanisms for enforcing the ones that exist? Is there a need to broaden the base for choice of arbitrators? Are there some evident criteria for good arbitrators? Is there room for accreditation and specialization?
- Time and cost: what are the main contributing factors? Are the current rules inadequate, or simply their enforcement? Can (and should) dispute resolution be made quicker or cheaper through systemic or institutional changes, or does improvement in time and cost depend inevitably on the efficiency of individual parties, counsel, and arbitrators? Are there downsides to faster/cheaper dispute resolution, given the importance of the stakes in ISDS?
- What are the obstacles to greater use of alternative means of dispute settlement such as mediation and conciliation in ISDS? How will specific rules such as the newly adopted IBA Rules on Investor-State Mediation facilitate access to mediation? How are recent treaties dealing with mediation and other recourse to ADR?
- The "ideal" investment agreement: what are its features, and to what extent are States moving in the direction of such models? Can legal standards and procedures be achieved by "building a better BIT" and gradually phasing it in through new negotiations, given the still unsettled parameters of the MFN doctrine allowing "borrowing" of terms from other (older) BITs that remain in force? Is there a need to revisit or terminate earlier BITs? What needs to be done about BITs and regional investment treaties that are inherently inconsistent?
- Expanding or restricting jurisdiction of the ISDS process. Should the scope of "investment" claims by "investors" be restricted or expanded? Or instead, should the potential for claims or counterclaims by States be reinforced and expanded? And, should private rights of action for international environmental or labor rights claims be introduced, as was proposed by some in connection with the recent U.S. Model BIT review?
- The role of State parties in interpretation of treaty provisions? Should this role be reinforced and if so, do treaties adequately provide for it with non-disputing party interventions? Are arbitral tribunals paying sufficient deference to the interpretation by the parties?
- The "appeals" proposal: why did this not gain traction among States when proposed for discussion during earlier rounds of amendment to the ICSID Rules, in 2006? What is there in regional FTAs and recent treaties that may promote its adoption this time around? Should this effort be conducted at individual treaty levels or is there a need for a broader and inclusive discussion, for example at ICSID? What standards would it apply and who would define them? What are the challenges and issues for implementation?
- A reprised role for States? Diplomatic protection, joint commissions, and State-to-State dispute settlement. Are those options looking better in hindsight? What experience can be gathered from approaches in regions such as Asia or Latin America? What lessons might be drawn from experiences in other contexts (e.g., WTO, MERCOSUR)?
- What are the benefits and drawbacks of a standing international investment court? Why did earlier initiatives fail, and what could be done differently this time around? Is the Inter Arab Investment Court working and could it be replicated? Is there a need for "small claims" settlement courts?
Submissions should be thoughtful and rigorous rather than advocacy pieces - we are not looking to publish tunnel-vision "calls for action" or "calls to defend the castle" by one side or another in the debate. Publication is expected in October or November 2013. Proposals for papers (e.g., abstracts) should be submitted to the editors by 15 September 2013. Please address all proposals to both Jean Kalicki and Anna Joubin-Bret.
Jean E. Kalicki
Arnold & Porter LLP and
Georgetown University Law Center
 See, e.g., D. Gaukrodger and K. Gordon, Investor-State-Dispute Settlement: A Scoping Paper for the Investment Policy Community, OECD Working Papers on International Investment, N°2012/3; K.P. Sauvant and F. Ortino, Improving the International Investment Law and Policy Regime: Options for the Future, Seminar on Improving the International Investment Regime, Helsinki, 10 - 11 April 2013 (hosted by the Ministry of Foreign Affairs of Finland).
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