Dear Members of the World Investment Network, 

It is my pleasure to share with you UNCTAD's IIA Issues Note entitled 
“Reform of Investor-State Dispute Settlement: In Search of a Roadmap”. 

The Note comes out at a time when the number of new claims reached a new 
peak, and the debate about the pros and cons of the investor-State dispute 
settlement (ISDS) mechanism has been gaining momentum. This is especially 
true in countries and regions where ISDS is on the negotiating agenda and 
where countries face controversial investor claims. 

ISDS is included in the majority of today's 3,000 plus international 
investment agreements (IIAs).  It grants foreign investors the right to 
initiate international arbitrations against host governments and to seek 
monetary compensation for losses suffered as a consequence of governmental 

Over the last few years, an increasing number of concerns have emerged 
about the current ISDS system. These relate, among others things, to a 
perceived deficit of legitimacy and transparency; contradictions between 
arbitral awards; difficulties in correcting erroneous arbitral decisions; 
questions about the independence and impartiality of arbitrators, and 
concerns relating to the cost and length of arbitral procedures. 

These concerns have prompted broad-based discussions of the ISDS system’s 
reform in the international investment-development community. To give 
shape to this debate, the Note identifies five main reform paths: 
·        Promoting alternative dispute resolution; 
·        Tailoring the existing system through individual IIAs; 
·        Limiting investor access to ISDS; 
·        Introducing an appeals facility; 
·        Creating a standing international investment court. 

Each of the five reform options comes with its specific advantages and 
disadvantages and responds to the main concerns in a distinctive way. Some 
of the options can be implemented through actions by individual 
governments while others require joint action by a larger group. The 
options that require collective action would go further in addressing the 
existing problems, but would also face more difficulties in 
implementation.The Note calls for a multilateral policy dialogue on ISDS 
to search for a consensus about the preferred course for reform and ways 
to put it into action. 

I hope that you find our IIA Issues Note interesting and useful. 

Best regards,

James Zhan
Investment and Enterprise Division
Palais des Nations, Geneva

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