[A2k] EU position paper calling for establishment of global arbitration court on ISDS

Thiru Balasubramaniam thiru at keionline.org
Wed May 6 04:37:54 PDT 2015



The starting point International investment rules were invented in Europe.
Today, EU Member States are parties to almost half of the total number of
international investment agreements that are currently in force worldwide
(roughly to 1400 out of 3000). These agreements, almost all of which
include both investment protection and investor-to-State dispute settlement
(“ISDS”) (which allows disputes between an investor and a State when the
latter is alleged to have breached its commitments under an international
investment agreement to be resolved) - have played their part in
encouraging and protecting the high volume of EU.


We have prevented practices by investors such as "forum shopping", that is
trying to pick the most suitable agreement to bring an ISDS claim. For
example, the making of an investment or business re-organisation for the
purpose of bringing a case (as is alleged Philip Morris has done to bring
its case against Australia) is explicitly prohibited in CETA. No other ISDS
agreement contains such a provision. Moreover, "mailbox" companies will not
be able to bring cases to arbitration. Only companies with real business
operations in the te


The sections below suggest that in parallel the EU should work towards the
establishment of an international investment court and appellate mechanism
with tenured judges with the vocation to replace the bilateral mechanism
which would be established. This would be a more operational solution in
the sense of applying to multiple agreements with multiple partners but it
will require a level of international consensus that will need to be built.
It is suggested to pursue this in parallel with establishing bilateral
appeal mechanisms. These changes are intended to be the stepping stones
towards a permanent multilateral system for investment disputes.

Eventually, what will be proposed in the TTIP context will set the standard
for the further development of investment protection provisions and
investment arbitration in EU investment negotiations. TTIP provides a
unique opportunity for reforming and improving the system.

This paper is intended to serve as a basis for discussion with the European
Parliament, the Council and reflects the substance and elaborates on the
ideas presented by EU Trade Commissioner Cecilia Malmström to the INTA
Committee (18 March) and to the informal Foreign Affairs Council (25
March). It also links in with views expressed by stakeholders. It is
without prejudice to the final position of the European Commission on the
matters described within.


This is Cecilia Malstrom's blog signalling the EU's intention to establish
an "International Investement Court".


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