Abstract
In its recent treaties with Canada and Vietnam, the European Union has established a new model of investor-state dispute settlement (ISDS). It entails a reworking of existing structures of investor-state arbitration through, inter alia, the replacement of ad hoc arbitral tribunals with standing, treaty-based investment tribunals, staffed with judges appointed by the states parties. It further provides for the establishment of a two-tiered system of tribunals, comprising first-instance and appellate bodies, and allows for appellate review as of right on issues of law and fact. The new EU model of ISDS does not appear to be compatible with the ICSID Convention. The changes made by the EU and its counterparties are simply too fundamental and too many for the awards produced by this new process of ISDS to be classified properly as ICSID Convention arbitral awards. Moreover, it is not within the power of groups of states or disputing parties to modify among themselves fundamental proscriptions of the ICSID Convention, such as the Convention’s express prohibition on the appellate review of ICSID Convention arbitral awards. This paper proceeds from the premise that a system of ISDS like the EU model is not compatible or compliant with the ICSID Convention and asks whether, nevertheless, a new multilateral system based broadly on that model can be designed to work at ICSID without amending the Convention. Is it possible, in other words, for ICSID to serve as a forum for the negotiation of an instrument that would create a new multilateral ISDS mechanism outside of the ICSID Convention? Or, considered differently, in the event that negotiations for a new mechanism occur in some other forum or in an ad hoc way, can ICSID and its secretariat nevertheless serve as the international organisation onto which the new mechanism might be docked? If so, what limits might there be on the role the Centre could properly play? These questions are of existential importance to ICSID as an institution. For if states agree to establish a multilateral investment tribunal to replace ICSID Convention arbitration (and all other forms of ad hoc investor-state arbitration for that matter), the question must be asked as to what will be left for ICSID as an institution to do, at least with respect to disputes arising under investment treaties.
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