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 conduct.

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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