Investor Presentaiton
30
INVESTOR-STATE DISPUTE SETTLEMENT: A SEQUEL
II. STOCKTAKING AND ANALYSIS
This section reviews essential institutional and procedural
aspects of the ISDS system. It identifies main treaty approaches to
each specific issue, seeking to explain their rationale as well as their
implications in arbitral practice.
Treaty language addressing ISDS has been undergoing a
significant evolution. A number of countries have been moving
away from the minimalistic regulation of ISDS confined to one
relatively short article (traditional for BITS concluded by Western
European countries) - towards more detailed coverage of various
ISDS issues (typical of the North American Free Trade Agreement's
(NAFTA) Chapter 11 and NAFTA-inspired IIAs). A number of
recent treaties have taken a median position between these two
approaches: such treaties address the ISDS issues which are
important to the contracting parties to the specific treaty.
Any IIA that includes the ISDS mechanism is bound to regulate
a number of primary, or fundamental, issues. These include consent
to arbitration and the conditions attached thereto, the scope of ISDS
and arbitral forums available to investors. Other ISDS-related issues
may be referred to as secondary, or optional. The relevant secondary
issues include, in particular, "fork-in-the-road" or "no-U-turn"
provisions, applicable substantive law, appointment of arbitrators,
frivolous claims and preliminary objections, provisional measures,
consolidation of claims, the role of States in the interpretative
process, the limitation of remedies available to the claimants and
others. A treaty may address them, but if it does not, this will not
paralyze the ISDS mechanism.
States might find that it is in their best interest to address at least
some of these secondary issues if they wish to enhance their control
over the arbitral process, foster the effectiveness and legitimacy of
the ISDS mechanism and/or prevent undesirable consequences.
When a particular treaty does not address certain secondary issues,
UNCTAD Series on International Investment Agreements IIView entire presentation