After a long journey, the Court of Justice of the European Union (CJEU) finally opened to an external system of judicial review. Indeed, despite the CJEU's historically notorious lack of openness towards an Investment Court System (ICS), a positive attitude was expressed in the opinion (C-1/17). This new attitude assumes a high degree of relevance in the discussions for a reform of the current Investor-State Dispute Settlement mechanism (ISDS), whose recursive criticalities will be by this paper investigated. In relation to the latter, the effectiveness of the proposed reforms will be analysed to contribute to the discernment as to which of the reform alternatives would be most effective.
The analysis that will be carried out will begin by illuminating points of conflict with the interests involved in the current system. Consequently, the reforms proposed and currently being negotiated to resolve these issues will be analysed in order to (i) verify the manner in which they propose to offer a solution to the aforementioned criticalities; and (ii) assess which of the reform alternatives is best suited in terms of effectiveness and associated risks both in terms of coordination with the existing system and scope innovativeness.
In framing the reform framework under negotiation, the analysis will devote particular attention to the debate on the most suitable of the alternatives between (i) the creation of a stand-alone court of appeal and (ii) the creation of a two-tier 'multilateral investment court' (MIC).
Table of Contents
I. Introduction
II. The rationale underpinning the reform
III. Mapping out a common reform ground as baseline
IV. Reconsideration of a viable alternative: the stand-alone court of appeal
V. ICS arbitral awards in the existing law regime
VI. The path towards an ad hoc code of conduct
VII. Conclusion
Research Objectives & Topics
This paper examines the ongoing reform process of the Investor-State Dispute Settlement (ISDS) mechanism, specifically analyzing the debate between establishing a permanent Multilateral Investment Court (MIC) versus a stand-alone appellate mechanism. The research aims to assess which alternative provides better effectiveness, legal certainty, and political feasibility while addressing concerns regarding arbitrator impartiality and consistency.
- Analysis of the structural limitations of the current ISDS system.
- Evaluation of reform proposals focusing on appeals mechanisms and investment courts.
- Assessment of the "innovation route" regarding its legal and practical implications.
- Critique of arbitrator ethical requirements and the proposed Code of Conduct.
- Exploration of legal challenges concerning the enforceability of new court decisions within existing conventions.
Excerpt from the Book
IV. Reconsideration of a viable alternative: the stand-alone court of appeal
Although the orientation of the European Union is progressively converging towards a dual court system, the option of creating an autonomous court of appeal is worth considering for several reasons. First, it would allow the circumvention of most of the risks underlying the creation of a more complex system - which appears to be completely disruptive to the existing system - while allowing the achievement of the desired objectives. Secondly, political risks and negotiation challenges would decrease, given the lesser innovative scope of the intervention, nonetheless remedying a substantial number of reasons on which the criticisms of the classic operators of the system are based.
An appeal would enable the attainment of the objectives of independence, predictability, effectiveness and transparency to the same extent. Transparency of proceedings and independence of the decision-makers would be achieved in the second instance, with the same rules as those already envisaged for the MIC. Although the first instance system would remain intact, on appeal there would be an opportunity to resolve the most complex disputes and those which have caused the most difficult problems, laying down a common line of interpretation useful for resolving the most open and controversial legal issues, with a clear improvement over the current situation. The effectiveness of the procedure would be achieved, while leaving in addition more flexibility in the solutions at first instance, thus satisfying also that part of the critics who would prefer to keep the current system and have the possibility to remain within the mechanisms already known.
Summary of Chapters
I. Introduction: This chapter highlights the CJEU's evolving openness toward external judicial review and sets out the paper's aim to analyze the effectiveness of proposed ISDS reform alternatives.
II. The rationale underpinning the reform: This section details the fundamental criticisms of the ISDS system, including the lack of consistency, predictability, and impartiality of arbitrators.
III. Mapping out a common reform ground as baseline: The chapter explores the two primary reform proposals: a permanent appeal mechanism and a two-tier Multilateral Investment Court (MIC), emphasizing the EU's support for the latter.
IV. Reconsideration of a viable alternative: the stand-alone court of appeal: This chapter argues the merits of a stand-alone appellate body as a "golden middle ground" that offers necessary reforms with less disruptive systemic change.
V. ICS arbitral awards in the existing law regime: This section addresses the legal complexities surrounding the enforcement of potential new court awards under existing international frameworks like the New York and ICSID Conventions.
VI. The path towards an ad hoc code of conduct: This chapter analyzes the proposed Draft Code of Conduct as a solution to arbitrator conflicts of interest, evaluating its feasibility and potential impact on arbitrator diversity.
VII. Conclusion: The concluding chapter synthesizes the findings, identifying the stand-alone appellate court as the optimal solution while calling for a cautious, pragmatic approach to ongoing negotiations.
Keywords
ISDS, Investor-State Dispute Settlement, International Investment Law, Multilateral Investment Court, MIC, Appeal Mechanism, Arbitrator Impartiality, Legal Certainty, Treaty Interpretation, Code of Conduct, Globalization, Sovereignty, Enforcement, Reform, UNCITRAL.
Frequently Asked Questions
What is the fundamental focus of this paper?
The paper focuses on the critical reform of the Investor-State Dispute Settlement (ISDS) mechanism, evaluating structural alternatives to address current systemic deficiencies.
What are the primary themes discussed?
The primary themes include legal consistency, the independence of arbitrators, the balance between state sovereignty and investor protection, and the procedural challenges of implementing a new court system.
What is the main objective of the author?
The main objective is to discern which reform pathway—a fully-fledged Multilateral Investment Court or a stand-alone appellate body—is most effective and feasible for the international community.
Which scientific methodology is applied?
The paper utilizes a comparative legal analysis and policy evaluation approach, examining treaty provisions, institutional proposals (specifically by the EU and UNCITRAL), and existing academic discourse.
What is covered in the main body of the work?
The main body systematically reviews the rationale for reform, assesses the two main structural proposals, analyzes the legal challenges to enforcement, and critiques the ethical framework provided by the Draft Code of Conduct.
Which specific keywords define the core of the research?
Key terms include ISDS, Multi-lateral Investment Court (MIC), appeal mechanisms, legal consistency, and arbitrator ethics.
Why might a stand-alone court of appeal be superior to a full MIC according to this paper?
The paper suggests a stand-alone court is a "golden middle ground" that provides consistency and predictability while being politically easier to achieve and less disruptive to the existing system.
What primary concern does the author raise regarding the proposed Code of Conduct?
The author highlights the risk that strict limitations could negatively affect the quality and number of available arbitrators, potentially harming diversity in international arbitration panels.
How does the proposed reform interact with the existing ICSID and New York Conventions?
The paper points out potential incompatibilities, noting that current enforcement mechanisms might require significant amendments or creative legal interpretations to accommodate a new system.
- Citar trabajo
- Cosimo Marcantuono (Autor), 2022, Towards a Reform of the Investor-State Dispute Settlement. An Assessment of the Innovation Route, Múnich, GRIN Verlag, https://www.grin.com/document/1321671
