During the past two decades, the treaty-based system of investor-state dispute settlement has com under increasing scrutiny. Critics contend that arbitral panels lack transparency, produce outcomes that are inconsistent and unpredictable, and undermine the right of host states to engage in legitimate forms of economic regulation by unduly favoring the interests of foreign investors.
Some observers question whether the assumption that underlies the current system -- the perception that domestic courts in developing countries are incapable of impartially adjudicating claims brought by foreign investors -- is still valid. Others assert that developing countries that have adopted the ISDS framework are no more successful at attracting foreign direct investment than developing countries that have declined to do so.
Until recently, proposals for ISDS reform focused on retaining the current system while limiting its reach and imposing more stringent ethical standards to improve transparency. More radical reforms include replacing special protections for foreign investors with new treaty-based guarantees and establishing new fora for dispute resolution, such as regional investment courts. Some developing countries have attempted to opt out of the current system by terminating their international investment agreements or by renouncing their obligations under the ICSID Convention.
The United Nations Commission on International Trade Law (UNCITRAL) promotes the harmonization of international trade law through the drafting of treaties, model laws, and other instruments that govern key aspects of international commerce, including dispute resolution.
UNCITRAL's Working Group III is in the process of drafting proposals for reforming investor-state dispute settlement. Visit the working group's website to access publicly available documents from its biannual meetings, including meeting agendas, reports, draft instruments, and submissions from national governments.
The non-governmental organizations listed below are reliable sources for information and research about the future of investor-state dispute settlement.
A selection of recently published books from the Georgetown Law Library's collection on the future of investor-state dispute settlement fiollows. To locate additional materials on this topic, use the Law Library's Advanced Search.