Dear Sir or Madam,
On the eve of the Expert
Meeting on the Transformation of the International
Investment Agreements (IIAs) Regime, UNCTAD released its IIA
Issues Note on Trends in IIAs and investor–State
dispute settlement (ISDS).
The main findings are as follows:
Countries continue to use IIAs as a tool for international investment policy
making. The year 2014 saw the conclusion of 27 IIAs, that is one every
other week. This brings the total number of agreements to 3,268.
The IIA universe is evolving with regard to substantive provisions: pre-establishment
commitments and sustainable development-oriented clauses are on the rise.
At least 45 countries and four regional integration organizations are currently
revising or have recently revised their model agreement.
Investors continue to use the ISDS mechanism. In 2014, claimants initiated
42 known treaty-based ISDS cases. With 40 per cent of new cases initiated
against developed countries, the relative share of cases against developed
countries has been on the rise (compared to the historical average of 28
per cent).
The two types of State conduct most commonly challenged by investors in
2014 were cancellations or alleged violations of contracts, and revocation
or denial of licences. Over time, the Energy Charter Treaty surpassed the
North American Free Trade Agreement as the most frequently invoked
IIA.
ISDS tribunals rendered at least 42 decisions in 2014. This includes an
award of USD 50 billion in three closely related cases, the highest known
award by far in the history of investment arbitration. The overall number
of concluded cases has reached 356, with 37 per cent decided in favour
of the State, 25 per cent in favour of the investor and 28 per cent of
cases settled.
The year saw important multilateral developments geared towards increased
transparency in ISDS. These include the coming into effect of the United
Nations Commission on International Trade Law Rules on Transparency and
the adoption of the Convention on Transparency in Treaty-based Investor-State
Arbitration, which will be opened for signature later in 2015.
Concerns about IIAs and ISDS have prompted a debate about their challenges
and opportunities in multiple forums. Today, a broad consensus is emerging
that the regime of IIAs and the related dispute settlement mechanism need
to be reformed to make them work better for sustainable development. Such
reform would need to be undertaken in a comprehensive and gradual way,
taking into account the interests of all stakeholders.
James Zhan
Director
Investment & Enterprise
United Nations Conference on Trade & Development