INTERNATIONAL INVESTMENT ARBITRATION AND EU REFORM PROJECTS FOR APPELLATE MECHANISMS: SOME CRITICAL REMARKS

A reflection on International Investment Arbitration and the Law of the European Union (EU) is an immensely stimulating exercise to highlight some of the most difficult issues of International Law, as well as current discussions about the future of International Investment Law, at least in Europe. Present concerns include the growing perception of a lack of legitimacy and predictability of ISDS decisions, their time-lengthy and costly procedures deterring smaller respondent countries, and questioning the impartiality of arbitrators. It has been said that we presently live in times of big “constitutional choices” and accordingly the EU has already replaced Investor-state dispute settlement (ISDS) arbitration mechanisms with a bilateral investment court system (ICS) in recently negotiated international investment agreements - including those with Canada, Mexico, Singapore, and Vietnam. The same treaties also include provisions anticipating the transition from the bilateral ICS to a permanent Multilateral Investment Court (MIC). It is worth noting at the outset that such a debate and the MIC proposal are focused at substituting a judicial procedural framework for investor-state dispute settlements, a permanent intergovernmental Court, in lieu of international investment arbitration. Strangely enough, one does not see the same focus on the real issue, namely the quality of the substantive law applicable to the merits in International Investment arbitration, a problem that will stay even if in the (far) future a MIC would be established. Nonetheless, even though the EU has recently entered IIAs including bilateral ICS instead of arbitration, a number of the EU’s major trading partners, including the USA and Japan, have so far expressed little support for the creation of a Permanent Court such as a MIC. In this essay, the peculiar roots of the current EU position and how they lead, as a fil rouge, to the EU current proposals that are presently discussed at UNCITRAL will be critically assessed.