UNCITRAL Working Group III continues debate on ISDS concerns and multilateral reform

Working Group III of the United Nations Commission on International Trade Law (UNCITRAL) continued discussions on possible reform of investor–state dispute settlement (ISDS) at its 35th session, held April 23–27, 2018 in New York. The meeting was attended by representatives of 50 of the 60 member states of UNCITRAL and 36 non-member states with observer status, as well as international and non-governmental organizations.

General statements at the beginning of the session highlighted the importance of the working group’s work for developing countries, in view of the impact of foreign investment and ISDS on sustainable development. Several statements stressed the need for any ISDS reform to strike a balance between rights and obligations of states and investors and underlined the importance of considering possible reform of ISDS at the multilateral level, with participation by both developing and developed country states. Contributions were made to the UNCITRAL trust fund to allow participation of developing countries in working group deliberations.

During the week, the working group discussed the question of coherence and consistency of ISDS outcomes. It also considered concerns regarding the appointment of arbitrators as well as ethical requirements, including with respect to the limited number of individuals repeatedly appointed as arbitrators, the absence of transparency in the appointment process, individuals acting as counsel and as arbitrators in different proceedings (double-hatting) and the perception that arbitrators are less cognizant of public interest concerns than judges holding a public office. Other issues raised included third-party funding, lack of disclosure and security for costs.

The working group presented its progress report at UNCITRAL’s 51st session, held in New York from June 25 to July 13, 2018. The 36th session of the working group is tentatively scheduled for October 29–November 2, 2018 in Vienna. At the next working group session, UNCITRAL member states will begin to identify and discuss areas where, in their view, multilateral reform of ISDS may be desirable. More information and official documents are available on the working group website.