In order to limit exposure to litigation, states are increasingly redefining and limiting access of investors to ISDS. One approach used is provisions on exhaustion of local remedies\u2014requiring investors to resort to domestic processes and courts before taking the claim to the international level, in line with customary international law. Parties can specify that the investor may be freed of the requirement if it is demonstrated that there are no reasonably available legal remedies at the domestic level. Alternatively, the exhaustion requirement could be time-bound to a number of years after initiating the claim at the national level. It will be useful for the parties to include a time limit for bringing the claim both at the domestic and the international level.<\/p>\n
Another possibility is including a requirement for prior written consent of disputing parties to submit a dispute to arbitration. Most ISDS provisions are understood to represent an \u201copen offer\u201d of the host state vis-a-vis any investor of the host state to resolve a dispute through arbitration. It is reasoned that by bringing a claim against the state, the investor accepts the offer to arbitrate. This means that the government gives consent to arbitration in advance of any dispute and without knowing the potential claimant. Re-introducing a written consent requirement would allow a government to decide which types of measures could be adequately dealt with through arbitration, thereby avoiding a situation where three arbitrators decide over important public interest laws and policies.<\/p>\n
Another approach is to limit the scope of provisions subject to ISDS, either by positive listing (any obligation not listed would be subject to ISDS), or by negative listing (specifying which treaty obligations are excluded from ISDS). Parties could also make access to ISDS conditional on investor behaviour, for example denying access to ISDS if the investment has been illegally made.<\/p>\n
Beyond restricting access to ISDS, other options include: no ISDS in the agreement (rare, but done by Brazil, for example, and argued by some countries as appropriate in agreements between countries with well-functioning judicial systems parties); moving away from the arbitration model and to a system of ISDS that is more formal and judicial (such as a court, discussed below); retaining arbitration as a starting point but amending and improving its functioning.<\/p>\n
Some of the options listed below require new institutional structures, so in this context, parties might also consider a moratorium on ISDS until these structures are set up and ready to function.<\/p>\n","protected":false},"excerpt":{"rendered":"
In order to limit exposure to litigation, states are increasingly redefining and limiting access of investors to ISDS. One approach used is provisions on exhaustion of local remedies\u2014requiring investors to resort to domestic processes and courts before taking the claim to the international level, in line with customary international law. Parties can specify that the… Read more »<\/a><\/p>\n","protected":false},"author":7,"featured_media":0,"parent":471,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"_acf_changed":false,"footnotes":"0"},"class_list":["post-474","page","type-page","status-publish","hentry"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.iisd.org\/toolkits\/sustainability-toolkit-for-trade-negotiators\/wp-json\/wp\/v2\/pages\/474","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.iisd.org\/toolkits\/sustainability-toolkit-for-trade-negotiators\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/www.iisd.org\/toolkits\/sustainability-toolkit-for-trade-negotiators\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/www.iisd.org\/toolkits\/sustainability-toolkit-for-trade-negotiators\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/www.iisd.org\/toolkits\/sustainability-toolkit-for-trade-negotiators\/wp-json\/wp\/v2\/comments?post=474"}],"version-history":[{"count":0,"href":"https:\/\/www.iisd.org\/toolkits\/sustainability-toolkit-for-trade-negotiators\/wp-json\/wp\/v2\/pages\/474\/revisions"}],"up":[{"embeddable":true,"href":"https:\/\/www.iisd.org\/toolkits\/sustainability-toolkit-for-trade-negotiators\/wp-json\/wp\/v2\/pages\/471"}],"wp:attachment":[{"href":"https:\/\/www.iisd.org\/toolkits\/sustainability-toolkit-for-trade-negotiators\/wp-json\/wp\/v2\/media?parent=474"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}