Investor Presentaiton
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INVESTOR-STATE DISPUTE SETTLEMENT: A SEQUEL
1. Introducing an appeals facility
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An appeals facility implies a standing body with a competence
to undertake substantive review of awards rendered by arbitral
tribunals. It has been proposed as a means to improve consistency
among arbitral awards, correct erroneous decisions of first-level
tribunals and enhance predictability of the law. This option has
been contemplated by some countries. If constituted of permanent
members, appointed by States from a pool of the most reputable
jurists, an appeals facility has a potential to become an authoritative
body capable of delivering consistent I and more balanced
opinions, which would rectify some of the legitimacy concerns
about the current ISDS regime.
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Authoritative pronouncements by an appeals facility on issues
of law would guide both the disputing parties (when assessing the
strength of their respective cases) and arbitrators adjudicating
disputes. Even if the process for constituting first-level arbitral
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For the relevant discussion see, e.g., Tams, 2006.
Several IIAs concluded by the United States have addressed the
potential establishment of a standing body to hear appeals from investor-
State arbitrations. The Chile-United States FTA was the first one to
establish a "socket" in the agreement into which an appellate mechanism
could be inserted should one be established under a separate agreement
(Article 10.19(10)). The Dominican Republic-Central America-United
States FTA (CAFTA) (2004) went further, and required the establishment
of a negotiating group to develop an appellate body or similar mechanism
(Annex 10-F). Notwithstanding these provisions, there has been no
announcement of any such negotiations and no text regarding the
establishment of any appellate body.
218 An alternative solution would be a system of preliminary rulings,
whereby tribunals in ongoing proceedings would be enabled or required to
refer unclear questions of law to a certain central body. This option, even
though it does not grant a right of appeal, could also help improve
consistency among arbitral decision making. See e.g., Schreuer, 2008.
UNCTAD Series on International Investment Agreements IIView entire presentation