THE NEW INVESTMENT COURT SYSTEM: PANACEA FOR THE FLAWS IN THE CURRENT ISDS MECHANISM?
The EU Trade Commissioner, Cecilia Malmström, in a concept paper published in May 2015, proposed the establishment of a new Investment Court System (ICS) which will hear investment disputes arising between investors and states. The new Court is intended to replace the current ISDS system and will include an appellate mechanism. The EU Commission intends that one permanent court will resolve the defects existing in the current ISDS system and silence the objections raised against it. This paper comments on and questions whether such a development is necessary and capable of fully covering the alleged flaws in the ISDS system. It will examine to what extent the proposed single court can overcome the problems regarding the independence and impartiality of arbitrators. Next, the paper challenges the alleged need to include an appellate mechanism in the new ICS.
On 5 May 2015, the European Commission proposed the new ICS for the Transatlantic Trade and Investment Partnership treaty and other EU trade and investment negotiations. Among the main elements of the reform that were proposed by Ms Malmström, the most noteworthy was the initiative to set up a permanent International Investment Court. In October the Commission published detailed draft proposals for the investment chapter in the TTIP. The chapter outlines the basis for the establishment of the International Investment Court which would resolve disputes under the TTIP.
Jan-Mar 2016 issue
Association for International Arbitration