The European Union has a clear vision for the future of investor-state dispute settlement (ISDS), albeit a revolutionary one. This vision was expressed in the EU Parliament’s resolution of 8 July 2015: “to replace the ISDS system with a new system for resolving disputes between investors and states which is subject to democratic principles and scrutiny, where potential cases are treated in a transparent manner by publicly appointed, independent professional judges in public hearings and which includes an appellate mechanism, where consistency of judicial decisions is ensured the jurisdiction of courts of the EU and of the Member States is respected, and where private interests cannot undermine public policy objectives”.

Encapsulated within this statement are, on one hand, several longstanding criticisms of the existing ISDS framework and, on the other, the EU’s desire to resolve these issues and achieve renewal by establishing new public legal machinery in the form of a standing Investment Court System (ICS).

The proposal, long-ago foreshadowed, materialised into a tangible model and has been put to the US for discussion at the 12th round of negotiations over the Transatlantic Trade and Investment Partnership (TTIP) to be held in Brussels from 22 to 26 February 2016. The debate surrounding the model (the text of which was publicised on 12 November 2015) evokes issues of profound political, economic and social importance.

This article considers the merits of the proposal, relative to recent treaties such as the Trans-Pacific Partnership (TPP), and the greater question of whether complete renewal is necessary, or whether amending the system incrementally is an effective approach to reform (as is currently the case).

Apr-Jun 2016 issue

Doug Jones AO