Multilateral investor-state arbitration court: assessment of the UNCITRAL process and its achievements in light of civil society recommendations

Key points:

• Regrets that the ongoing negotiations on the possible establishment of a multilateral investment court (MIC), under the auspices of the United Nations Commission on International Trade Law (UNCITRAL) WG-III, are focusing more on procedural issues rather than substantive ones.

• Urges the European Commission, in its mandate to negotiate, to continue pursuing the reform of substantive law issues along with the procedural rules. Among the substantive issues, vague or too far-reaching provisions of fair and equitable treatment (FET) should be limited to non-discrimination and direct expropriation as essential elements of investment protection.
• Reminds the Commission of its request to be more involved in UNCITRAL's work.

• Would like for the amicus curiae model to include third party interventions by all stakeholders (such as local residents, workers, unions, environmental groups or consumers) and to ensure their due consideration by judges.

• Calls to ensure that some of the more crosscutting issues are kept on the negotiating table, including the chilling effect of ISDS, the exhaustion of local remedies, and access of third parties, such as local communities impacted by investments.

• Welcomes the OECD's work aimed at considering the challenges of sustainable development in investment agreements, but urges that it will complete its work by taking social issues into consideration, particularly making due diligence an eligibility criteria for foreign investors.

• Notes that while WG-III's work is centred on procedural elements, this may lead to benefits in the future, such as clearer and more stable case law, which would also facilitate reforming applicable substantive law in investment treaties.

• Considers it essential for an effective ISDS institutional reform to move away from ad-hoc arbitration, to take a more holistic approach to international investment governance, and not to just replace ISDS arbitration with an investor-state court.

• Reiterates the need to achieve consistency between the EU's ambitious sustainable development goals, and the framework for reforming the ISDS model.