Reply to the European Commission’s Public consultation on a multilateral reform of investment dispute resolution
On December 21, 2016 the European Commission launched a public consultation to gather stakeholders’ views on options for a multilateral reform of investment dispute resolution, including the possible establishment of a permanent Multilateral Investment Court (MIC).
While the Commission has not released language for its MIC proposal, it presumably builds on the Investment Court System (ICS) embedded in recent EU agreements with Canada and Vietnam, comprising a First Instance Tribunal and an Appeal Tribunal with full-time judges empowered to decide on cases initiated by foreign investors against their host states.
In this commentary, IISD rejects the Commission’s ICS proposal as it fails to address most of the flaws that have led to public concern regarding ISDS. IISD further rejects the MIC proposal, which would cement the flawed ISDS regime and, worse, extrapolate it to the multilateral level. Despite the procedural improvements brought by both proposals vis-à-vis traditional ISDS, they fall short of advancing satisfactory alternatives to the unidirectional, exclusionist and unbalanced nature of the existing ISDS regime. IISD regrets that the Commission’s consultation was based on narrow questions that fail to reach the core elements of much-needed reform in investment dispute settlement. The consultation was a missed opportunity for the Commission to obtain valuable inputs toward multilateral reform of investment dispute resolution in the best interest of Europeans and the international community.