Suchergebnisse

Abstract
Mediation has gained a lot of traction in the context of ISDS in the past few years. There are many who truly believe that this could be an alternative to highly costly and lengthy investor-State arbitrations and litigations. States have started to include mediation in their investment treaties; institutions have designed separate mediation rules and procedures specifically for investor-State disputes. The 2022 International Dispute Resolution Survey from the Singapore International Dispute Resolution Academy (SIDRA) is a testament to this positive trend towards investor-State mediation. In the 2022 SIDRA Survey, the respondents signal increased acceptance of mediation in ISDS.
Despite these trends, the use of mediation in investor-State disputes appears to be very limited. During the 2022 SIDRA Survey qualitative interviews, the SIDRA tried to enquire about the users' perspective on the Survey results on mediation and the prospect of the use of mediation for investor-State matters.
This article examines the challenges of using mediation in ISDS to propose possible solutions to overcome these challenges. Section II presents the 2022 SIDRA Survey results. Section III outlines and examines user insights collected during qualitative interviews. Section IV proposes possible measures to eliminate the obstacles hindering the use of mediation by States. Section V draws final conclusions.

AbstractMany investment treaties include investor-state dispute settlement (ISDS) provisions which are supposed to protect a foreign investor against opportunistic behavior of a host country. This paper scrutinizes the optimal design of ISDS provisions that solve the holdup problem. It shows that an efficient investor protection mechanism requires an arbitrator as established in investment treaties. However, this arbitrator does neither have to learn nor to evaluate the circumstances of the dispute. Furthermore, any ISDS compensation from the government to the investor should not be based on reductions in investor profits but on the host country's welfare effects.

Investor-State Dispute Settlement, a legal provision in Bilateral Investment Treaties (BITs) or other International Investment Agreements that gives investors a right to call for arbitration with a state, has recently become the centre of controversy in a debate over the Transatlantic Trade and Investment Partnership (TTIP). Critics argue that such a provision is either illegitimate, unnecessary, and/or does not have any positive influence on flows of Foreign Direct Investment (FDI). More radical critics argue that ISDS is a provision that allows big companies to sue governments when they have made democratic choices with negative consequences for companies. This study surveys the recent decade of ISDS activity. It concludes that the number of ISDS cases has continued to grow, and that the growth is concentrated to certain sectors with a high degree of government involvement or political patronage.

Professor A. F. M. Maniruzzaman considers the impact of a spectacular growth of investor-state dispute resolution by arbitration over the last two decades, looking at issues raised by excessive investor-state arbitral awards with wider implications beyond the field of arbitration itself, such as concerns about the role of arbitrators vis-à-vis the respondent state's public interest in regulating various matters including environmental protection, low-carbon investments, social and human rights; dire economic consequences flowing from arbitrators' decisions who lack in democratic legitimacy of a domestic or international judicial institution; and inconsistency in arbitral interpretation of investment treaty obligations, hence unpredictability in arbitral decisions on similar or identical issues.

With the rise of treaty-based investor-state dispute settlement ("ISDS") which has taken place over the last two decades, a number of governments have adopted varying approaches to avoid those arbitration cases. Countries including Bosnia and Herzegovina, Colombia, Mexico, Mongolia, and Peru have pursued such initiatives, often with the support of intergovernmental organizations such as the United Nations Convention on Trade and Development ("UNCTAD") and the World Bank. In the context of discussions on ISDS reform taking place at the United Nations Commission on International Trade Law ("UNCITRAL"), some states have identified development and implementation of such ISDS-avoidance strategies and tools as initiatives they would like to pursue. There remains, however, relatively little dialogue and research exploring the comparative institutional design, functional workings, and costs and benefits of different approaches, and identifying, articulating, and disseminating lessons learned from experiences to date. This article draws from a broader research project exploring the effectiveness of dispute prevention approaches (and perceptions thereof) at resolving underlying conflicts between investors and states, and at their implications for other stakeholders. Understanding how dispute prevention approaches can and do operate and whether and how they can provide meaningful and lasting solutions to the broader conflicts underlying investor-state disputes can critically inform the assessment of existing approaches and the design of new ones.

The landscape in which investor-state dispute settlement (ISDS) takes place is undergoing profound change. Although discontent with the current ISDS system is on the rise, most countries have so far not seen a need to modify ISDS provisions in international investment agreements. To move forward, countries should take a pro-active approach toward reforming the ISDS mechanism.

This issue of Commonwealth Trade Hot Topics offers a preliminary insight into what it means for developing country governments to commit to investor-state dispute settlement, and how this commitment entails linkages to their development policy space and regulatory decisions.