CCSI Submissions to UNCITRAL ISDS Reform Process

The United Nations Commission on International Trade Law (UNCITRAL) is currently working on how to reform international investment treaties, focusing in particular on those treaties’ provisions enabling investors to sue governments in international arbitration. As an observer organization in this process, CCSI has emphasized that in the context of investor-state dispute settlement (ISDS) reform, it is important to first consider what it is that investment treaties aim to achieve, and only then to consider what form(s) of dispute settlement will best advance those objectives. This means not only looking at reform of the existing ISDS mechanism, but also alternatives to it. Having identified various concerns about ISDS, UNCITRAL is now taking stock of potential reform options, and will consider this fall which options to pursue and in what order. To contribute to UNCITRAL’s work, CCSI, together with the International Institute for Environment and Development (IIED) and the International Institute for Sustainable Development (IISD), submitted four documents outlining potential reform options and considerations:

• “UNCITRAL Working Group III on ISDS Reform: How Cross-Cutting Issues Reshape Reform Options” discusses at a general level how issues such as regulatory chill, investor obligations and counterclaims, the rights of non-parties, and damages – issues that were recognized by the Working Group as being important for guiding its efforts and outputs – could inform the contours of reform solutions. 

• A “Draft Text Providing for Transparency and Prohibiting Certain Forms of Third-Party Funding in Investor-State Dispute Settlement”, (also available in Spanish and in French), builds on our work examining the role and implications of third-party funding, and provides draft language that could be used by states in reform instruments..

• “Third Party Rights in Investor-State Dispute Settlement: Options for Reform” builds on work highlighting the impact of ISDS on access to justice for third parties, and briefly elaborates on how investor-state arbitrations can affect third parties, while also offering examples of procedural tools that states could use to better safeguard those third parties’ rights.  

• In line with our broader work on objectives of international investment law, the costs and benefits of the current system, alternatives to investor-state arbitration, and strategies for advancing those alternatives, in  “Draft Treaty Language: Withdrawal of Consent to Arbitrate and Termination of International Investment Agreements,” we outline two more systemic and near-term options that states can explore to recraft their investment policies with domestic and international sustainable development objectives. 

The submissions are described by the authors in a series of videos, included below.

Concerns and Cross-Cutting Issues

Third Party Funding

Third Party Rights in ISDS