It is my great privilege to speak on this panel today in honor of David Caron, a brilliant scholar, a thoughtful jurist, a caring mentor, and a dear friend. As this conference shows, David’s interests and expertise in international law were broad and varied. One area that attracted David’s attention was Investor-State Dispute Settlement, or “ISDS.” My topic for discussion today is “ISDS reform and the proposal for a Multilateral Investment Court.”
“ISDS,” as many of you may know, stands for “Investor-State Dispute Settlement,” and refers to the current system of ad hoc arbitration that foreign investors and host States use to resolve their investment disputes. Because the system is ad hoc—in other words, the disputing parties pick the arbitrators and the arbitrators decide only the case before them—it has come under increasing attack. Critics say that the one-off approach produces inconsistent results across similar cases and encourages arbitrators to act self-interestedly in search of their next appointment.
What I would like to talk about today is the proposal to scrap the current ad hoc arbitration system in favor of a permanent, multilateral investment court. This initiative has been heavily driven by the European Commission (EC), which has already provided for bilateral investment courts in its latest free trade agreements, and the proposal is now in the early stages of consideration by the UN Commission on International Trade Law (UNCITRAL).