UNCITRAL deliberates possible reform of investor-State dispute settlement
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UNIS | 8 December 2017

UNCITRAL deliberates possible reform of investor-State dispute settlement

(UN Information Service) - Working Group III of the United Nations Commission on International Trade Law (UNCITRAL) began its deliberation last week on possible reform of investor-State dispute settlement (ISDS).

At its fiftieth annual session, in July 2017, the Commission decided to entrust the Working Group with a broad mandate to work on the possible reform of ISDS. The Working Group was requested to identify concerns regarding ISDS, consider whether reform was desirable and, if deemed desirable, to develop relevant solutions to be recommended to the Commission.

The week long session (27 November - 1 December 2017) was attended by more than 300 participants representing 80 States and 35 observers, including the European Union, the UN Conference on Trade and Development (UNCTAD), the International Centre for Settlement of Investment Disputes (ICSID), the Organization for Economic Cooperation and Development (OECD), and the Permanent Court of Arbitration (PCA), as well as a number of other inter-governmental and non-governmental organizations.

The Working Group agreed to consider the three stages of the mandate in sequence and to undertake a thorough analysis of all relevant issues, with the objective of identifying the core concerns that might justify reform. The Working Group also considered the scope of its work, for example, whether it should focus on ISDS under investment treaties, whether it should focus on investment arbitration and whether it should focus on procedural aspects of ISDS rather than on substantive treaty standards.

While the need for a fact-based analysis was emphasized, it was also noted that perceptions on relevant issues needed to be taken into account, as they remained relevant to State policy-making. The particular concerns of developing States, as well as access of small- and medium-sized enterprises to ISDS, were also noted.

The Working Group began its work with discussions on the procedural aspects of ISDS, including but not limited to, duration and cost of proceedings, allocation of costs, security for costs, third party funding, transparency, early dismissal mechanisms and counterclaims by States. The Working Group also exchanged views on the overall consistency and coherence of the ISDS system and its outcomes.

The adopted portions of the report, as well as a full audio recording of the proceedings, will soon become available on the UNCITRAL website. The Working Group is scheduled to continue its discussion at its next session in New York from 23 to 27 April 2018.


Background: UNCITRAL’s work on ISDS includes the development of standards on transparency. The UNCITRAL Rules on Transparency in Treaty-based Investor-State Arbitration (Transparency Rules) adopted in 2013 provide a procedural framework for making information available to the public on investment arbitration cases arising under relevant investment treaties concluded after 1 April 2014. The United Nations Convention on Transparency in Treaty-based Investor-State Arbitration provides a mechanism for the application of the Transparency Rules to arbitration cases arising under the almost 3,000 investment treaties concluded before 1 April 2014. The Convention entered into force on 18 October 2017.

The United Nations Commission on International Trade Law (UNCITRAL) is the core legal body of the United Nations system in the field of international trade law. Its mandate is to remove legal obstacles to international trade by progressively modernizing and harmonizing trade law. It prepares legal texts in a number of key areas such as international commercial dispute settlement, electronic commerce, insolvency, international payments, sale of goods, transport law, procurement and infrastructure development. UNCITRAL also provides technical assistance to law reform activities, including assisting Member States to review and assess their law reform needs and to draft the legislation required to implement UNCITRAL texts. The UNCITRAL Secretariat is located in Vienna, Austria, and maintains a website at www.uncitral.org .

source: UNIS