In early 2026, UNCITRAL Working Group III held its 53rd and 54th sessions. The 53rd session addressed procedural and cross-cutting issues—including cost allocation, third-party funding (TPF) disclosure, and counterclaims—with mixed results. A broad scope for counterclaims was agreed, and a compromise on TPF disclosure was reached, though more ambitious regulation of TPF was not taken up. Progress on cost allocation was slow, and discussions on the calculation of damages were deferred. The Working Group also confirmed that the procedural and cross-cutting provisions will form a Protocol to the UNCITRAL ISDS Reform Package. The 54th session in Vienna focused on draft statutes for a permanent tribunal and a permanent appellate body. In particular, the discussions turned to whether and how to include state-to-state dispute settlement (SSDS), what should be the scope of the tribunals‘ jurisdiction and how to operationalise jurisdiction’s exclusivity. Overall, the negotiations reflect growing frustration with their pace and the risk of a low‑ambition outcome that fails to address core criticisms of the ISDS system. Without meaningful progress, ad hoc arbitration is likely to remain the default, preserving many of the structural concerns the reform process was intended to resolve.