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UNCITRAL and ISDS Reforms: Concerns about Costs, Transparency, Third Party Funding and Counterclaims

Published on June 6, 2018        Author:  and
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As explained in a previous post, we have put together four posts that compile the most relevant quotes from the first two meetings of the UNCITRAL Working Group sessions on states’ concerns about investor-state dispute settlement. To facilitate discussions about the desirability of reforms and their potential nature, we have organized these quotes into key themes that emerged during the meetings. This blog sets out quotes about costs, transparency, third party funding and counterclaims. The other blogs deal with concerns about:

  1. Facts versus Perceptions and Systemic Problems or Solutions
  2. Consistency, Predictability and Correctness
  3. Arbitral Appointments, Incentives and Legitimacy

We avoid editorializing because we think that it is important for other stakeholders to hear states’ concerns expressed in their own words. We have grouped states’ concerns under headings but otherwise have kept the interventions on each sub-topic in the order in which they were made. For an analytical framework for understanding these reform dynamics, see Anthea Roberts, Incremental, Systemic, and Paradigmatic Reform of Investor-State Arbitration, 112 AJIL _ (2018) (forthcoming).

  1. Costs & duration of arbitral proceedings

SOUTH AFRICA – on significant costs of arbitration: “In terms of the issue of costs when it comes to ISDS, we believe that the amounts at stake in investment treaty arbitration are often very high. Claims for compensation do amount to billions of dollars in most cases and in this context entering into treaties with the investor dispute settlement clauses carry significant financial costs for governments particularly the developing countries whose fiscal position can be seriously affected even when cases have been discontinued or when the outcome is said to be in favor of the state. The state will usually have to bear the exorbitant costs of legal defense and arbitrators fees. Furthermore large claims may serve to sustain threats of arbitration increasing the bargaining power of investors in informal discussions with governments to water down regulatory measures or to settle a dispute.” Read the rest of this entry…

 

UNCITRAL and ISDS Reforms: Concerns about Arbitral Appointments, Incentives and Legitimacy

Published on June 6, 2018        Author:  and
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As explained in a previous post, we have put together four posts that compile the most relevant quotes from the first two meetings of the UNCITRAL Working Group sessions on states’ concerns about investor-state dispute settlement. To facilitate discussions about the desirability of reforms and their potential nature, we have organized these quotes into key themes that emerged during the meetings. This blog sets out quotes about arbitral appointments, incentives and legitimacy. The other blogs deal with concerns about:

  1. Facts versus Perceptions and Systemic Problems or Solutions
  2. Consistency, Predictability and Correctness
  3. Costs, Transparency, Third Party Funding and Counterclaims

We avoid editorializing because we think that it is important for other stakeholders to hear states’ concerns expressed in their own words. We have grouped states’ concerns under headings but otherwise have kept the interventions on each sub-topic in the order in which they were made. For an analytical framework for understanding these reform dynamics, see Anthea Roberts, Incremental, Systemic, and Paradigmatic Reform of Investor-State Arbitration, 112 AJIL _ (2018) (forthcoming).

  1. General observations: the lack of independence and impartiality of adjudicators

INDIA – on the problem of pro-investor and pro-state arbitrators for impartiality and independence: “The very fact that there are investors arbitrators and there are states arbitrators is a testimony that impartiality and independence is lacking in the system. The system is lacking in adequate ethical requirements. And there’s a lot of conflict of interest in this system which needs to be corrected. Third party funding is a problem as well. The mix of third party funding, multiple hatting and lack of adequate ethical standards has the potential to derail the system.” Read the rest of this entry…

 

UNCITRAL and ISDS Reforms: Concerns about Consistency, Predictability and Correctness

Published on June 5, 2018        Author:  and
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As explained in a previous post, we have put together four posts that compile the most relevant quotes from the first two meetings of the UNCITRAL Working Group sessions on states’ concerns about investor-state dispute settlement. To facilitate discussions about the desirability of reforms and their potential nature, we have organized these quotes into key themes that emerged during the meetings. This blog sets out quotes about predictability, consistency and correctness. The other blogs deal with concerns about:

  1. Facts versus Perceptions and Systemic Problems or Solutions 
  2. Arbitral Appointments, Incentives and Legitimacy 
  3. Costs, Transparency, Third Party Funding and Counterclaims

We avoid editorializing because we think that it is important for other stakeholders to hear states’ concerns expressed in their own words. We have grouped states’ concerns under headings but otherwise have kept the interventions on each sub-topic in the order in which they were made. For an analytical framework for understanding these reform dynamics, see Anthea Roberts, Incremental, Systemic, and Paradigmatic Reform of Investor-State Arbitration, 112 AJIL _ (2018) (forthcoming).

  1. Inconsistency and lack of predictability:

EUROPEAN UNION – on the relationship between costs and consistency and predictability: “We think that the system has an effect of increasing those costs and hence by looking at the system we may be able to identify ways to gradually bring about reductions and these costs. We see this happening in three ways. The first way is because the system as it currently functions does not bring about predictability and does not bring about consistency. What does this mean. It means that in any given case before any freshly constituted ad hoc tribunal, a lawyer who is doing his or her job properly will make any possible argument that can be made legally in that particular situation. It doesn’t matter if that particular legal argument has been dismissed on multiple occasions by other tribunals. It may be the case that that particular ad hoc tribunal will accept the argumentation and so any diligent lawyer will have to make that argument again. So we think increasing and dealing with the issue of predictability and consistency will help address the issue of costs.” Read the rest of this entry…

 

UNCITRAL and ISDS Reforms: What are States’ Concerns?

Published on June 5, 2018        Author:  and
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What are states’ concerns about investor-state dispute settlement (ISDS)? To help answer that question, we have put together four posts that compile the most relevant quotes from the first two meetings of the UNCITRAL Working Group sessions. To facilitate discussions about the desirability of reforms and their potential nature, we have organized these quotes into key themes that emerged during the meetings.

As explained in a previous post, UNCITRAL granted Working Group III a mandate to: (i) identify and consider concerns regarding ISDS; (ii) consider whether reform was desirable in light of any identified concerns; and (iii) if the Working Group were to conclude that reform was desirable, develop any relevant solutions to be recommended to the Commission.

The mandate calls for the process to be “fully transparent” and thus recordings of the session are available online. These posts are in keeping with that call for transparency. They communicate states’ key concerns to other interested stakeholders, which is important given the disconnects that often exist between different communities in the field.

This post will list quotes about two general issues that emerged in the Working Group: whether states should be concerned with facts and perceptions, or just facts; and whether some of the problems identified were systemic in nature or called for systemic solutions. The next three blogs provide quotes about the concerns states raised with respect to the following topics:

  1. Consistency, Predictability and Correctness of Awards
  2. Arbitral Appointments, Incentives and Legitimacy
  3. Costs, Transparency, Third Party Funding and Counterclaims

Read the rest of this entry…