The EU-Vietnam Investment Protection Agreement Investor-State Dispute Settlement Mechanism in Perspective

Abstract

The EU-Vietnam Investment Protection Agreement (EVIPA) represented the culmination of three years of negotiations between the EU and Vietnam. Although it remainsto be ratified, it promises to have an impact on the international investment treaty landscape. The treaty contains innovations ranging from its definition of the substantive protections afforded to foreign investors to its definition of ‘investments’ and ‘investors’ that may qualify for those protections, as well as the procedural modalities for the treatment of possible disputes. Its most distinctive trait, however, is its establishment of a semi-permanent adjudicatory body akin to an investment court in replacement of the arbitration model envisaged by the vast majority of investment treaties over the past several decades. Rather than attempt to reform, the evipa drafters have done tabula rasa and opted for revolution instead. The EVIPA’S envisaged method to select, appoint, and remunerate the members of that body – both at the first instance level and at the appellate level – represents an abrupt and profound abandonment of the traditional arbitration model so frequently and presently used in international disputes around the world. The evipa may thus present an opportunity to test an alternative dispute resolution system and thus to aid in determining the most effective and appropriate method to resolve the international investor-State disputes of the future.