The EU’S Proposed Investment Court and WTO Dispute Settlement: A Comparison and Lessons Learned

Abstract

Investor-state dispute settlement (ISDS) has been a prominent feature of bilateral investment treaties that have proliferated since the mid-20th century. Perhaps in part due to its popularity, ISDS has recently been subject to significant criticism. The European Union has proposed a reconception of ISDS in the Comprehensive Economic and Trade Agreement with Canada (CETA), which was signed on 30 October 2016, in its proposed Investment Chapter for the Transatlantic Trade and Investment Partnership (TTIP) which it was negotiating with the United States until those negotiations were effectively paused in early 2017, as well as in several other policy documents and free trade agreements. The EU’S proposed “Investment Court System” (ICS) in particular, would make resolution of investment disputes more similar to the World Trade Organisation’s (WTO) state-to-state dispute settlement mechanism for trade disputes and, as the EU sees it, would form the basis for a broader restructuring and multilateralisation of investment protection worldwide. This article examines the EU’S proposed approach and aims to compare key aspects of its Investment Court mechanism to the WTO. Where possible, we also consider some of the lessons learned from the WTO and how they compare to the EU’S proposed Investment Court System.