where: C3 – Centre for International Development, Sensengasse 3, 1090 Vienna
please sign up at: Ingrid Pumpler, email@example.com or +43 1 3174010-100
Investor-state dispute settlement (ISDS) is a form of international dispute arbitration that allows foreign investors to sue states directly under international law. The primary aim of ISDS is to protect foreign investors from abusive treatment by governments, and – from a host country perspective – to encourage foreign direct investment. ISDS is part of more than 90 % of almost 3.000 existing bilateral investment treaties, and also of various free trade agreements with investor provisions, such as NAFTA. The use of ISDS has increased exponentially over the last 15 years and so has the debate about this topic. This holds especially for those countries which have faced investor claims that have attracted public attention or where ISDS is on the agenda of negotiations. As for the currently negotiated EU-US Transatlantic Trade and Investment Partnership (TTIP), the European Commissiondecided to consult the public on the envisaged investment provisions following unprecedented public interest.
Concerns with the current ISDS system relate, among others, to questions of public policy
space, to a perceived deficit of transparency, to questions about the independence and impartiality of arbitrators, to the legitimacy of arbitration tribunals, to the costs and time of the procedures and to the amount of compensation. The debate on “abandoning, retaining or reforming” (Campbell et al. 2014) current ISDS provisions has intensified, and many organizations such as the OECD or UNCTAD as well as scientists and NGOs have made valuable contributions to this debate.