In recent times, the EU and its trade partners have cranked up momentum on the establishment of a multilateral investment court, with the aim of replacing ad hoc arbitration provisions in investor-state dispute settlement (“ISDS”) for the protection of investors. In our previous post, we noted that this has caused some debate in the Canada-EU trade deal, where this provision led to objections by numerous member states, as well as last minute blocking of Belgium’s approval to the trade accord.
On February 27, 2017, the European Commission’s DG Trade held a public stakeholder meeting in Brussels aimed at presenting options for reform. EU Trade Commissioner, Cecilia Malmström noted significant international support for the project, led by the EU and Canada. Numerous industry associations, private firms, government representatives, academics, and NGOs attended the meeting. Participants aired numerous concerns ranging from the actual subject matter expertise of appointed judges to the rights of foreign investors in ISDS.
Based on the Commission’s proposal, the multilateral investment court (“MIC”) looks like it will be built on existing international court frameworks comprising elements such as first instance and appellate review, full-time salaried judges, and opt-in approach for existing investment rules (UNCITRAL etc.). The MIC has potentially far-ranging effects on the investment arbitration system as it stands today. While the intentions are to inject legitimacy and transparency into the currently ad-hoc system, many questions remain as to how the MIC will actually be implemented.
Following the completion of the Commission’s online public consultation on March 15, 2017, an impact assessment will be conducted.