CCSI and UNCITRAL’s Working Group III on Investor-State Dispute Settlement Reform

CCSI participates as an observer organization in UNCITRAL’s Working Group III on Investor-State Dispute Settlement Reform. Working Group III is currently advancing a mandate to reform the investor-state dispute settlement (ISDS) system in international investment treaties. The ISDS mechanism permits investors to directly sue governments for alleged treaty breaches.

CCSI has prepared a video summary of the Working Group’s method of operation and progress (15 min video). 

Working Group III has identified concerns about ISDS, including: 

  • Concerns relating to the lack of consistency, coherence, predictability and ‘correctness’ of arbitral decisions;
  • Concerns relating to arbitrators and decision makers;
  • Concerns relating to costs and duration of ISDS cases; and
  • Third-party funding

The Working Group also identified the following cross-cutting issues that should be taken into account when developing reform solutions

  • Implications for third parties, and the role of third-party participation, including participation both by the general public and by local communities affected by the investment or the dispute at hand;
  • Means other than arbitration to resolve investment disputes as well as dispute prevention methods;
  • Exhaustion of local remedies;
  • Investor obligations and counterclaims;
  • Regulatory chill; and
  • Damages.

Having agreed that multilateral reform to address these concerns and cross-cutting issues is desirable, the Working Group is now identifying reform solutions

CCSI engages in various activities to support members of the Working Group and the Working Group’s mandate. Click on links below for information on our activities.

CCSI has made a number of written submissions to Working Group III (publications and videos available):

  • Draft Text Providing for Transparency and Prohibiting Certain Forms of Third-Party Funding in Investor–State Dispute Settlement  (July 2019) (with IISD and IIED)
  • Draft Treaty Language: Withdrawal of Consent to Arbitrate and Termination of International Investment Agreements (July 2019) (with IISD and IIED)
  • Shaping the Reform Agenda: Concerns Identified and Cross-Cutting Issues  (July 2019) (with IISD and IIED)
  • Third Party Rights in Investor-State Dispute Settlement: Options for Reform  (July 2019) (with IISD and IIED)
  • Reforming the International Investment Regime through a Framework Convention on Investment and Sustainable Development (October 2020) (with the Harrison Institute for Public Law and CAROLA) 
  • Comments to the Draft Workplan (March 2021) (with IISD and IIED)

Read more about CCSI’s submissions here.

UNCITRAL’s WGIII has identified a variety of concerns related to Investor-State Dispute Settlement. CCSI’s work as it relates to each of these concerns is set forth below.

Concerns relating to the lack of consistency, coherence, predictability and ‘correctness’ of arbitral decisions

Concerns relating to arbitrators and decision makers

Concerns relating to costs and duration of ISDS cases

 

Third-Party Funding

For more information on CCSI’s work on Third-Party Funding in ISDS related to UNCITRAL WCIII click here.

Implications for third parties and the role of third-party participation

Means other than arbitration to resolve investment disputes as well as dispute prevention methods

Exhaustion of local remedies

Investor obligations and counterclaims

Regulatory chill

Valuation and Damages

 

Other Relevant Publications:

Principles that should be guiding reform:

 

Alternatives to ISDS and termination of Investment Treaties

CCSI, with support from GIZ and the German Federal Ministry of Economic Cooperation and Development (BMZ)the German Cooperation, has organized a series of sessions for UNCITRAL Working Group III developing country delegates designed to provide a forum in which they can consider issues that will be discussed at forthcoming Working Group Sessions, and to prepare for these sessions and intersessional engagements (whether formal or informal, internal or external). For the 36th through 38th (resumed) session, CCSI conducted in-person sessions over the two days preceding the Working Group sessions. In advance of the 39th Session (which was postponed from April 2020 to October 2020 due to the COVID-19 pandemic), CCSI conducted a series of online preparatory sessions.

While organized by CCSI, these preparatory sessions benefit from input by the UNCITRAL Secretariat, as well as from external speakers (typically academics working on the relevant issue).

Below are the agendas for these sessions, and to the extent available, links to materials collected and collated by CCSI and provided to delegates at these preparatory sessions.

 

36th Working Group III Session Preparatory Session (27-28 October 2018; Vienna)

Day 1 Agenda:

  • An overview of UNCITRAL and Working Group III
  • An overview of Working Group III’s process to date
  • What to expect - the 36th session agenda
  • Looking more closely at past discussions 
  • Group brainstorm: What has/has not been covered in terms of cataloguing issues? 
  • Some concerns regarding ISDS and possible reform options, with Marc Bungenberg, Saarland University

Day 2 Agenda: 

 

37th Working Group III Session Preparatory Session (29-30 March 2019, New York): 

Day 1 Agenda:  

  • An overview of Working Group III’s process to date and insights from intersessionals 
  • The upcoming WGIII meeting – “Third Party Funding” 
  • The upcoming WGIII meeting – Are there “other concerns”?

 

Day 2 Agenda: 

  • An overview of UNCITRAL and Working Group III 
  • Workplans: An overview and discussion of state workplan submissions 
  • Considering Phase III of the Working Group’s ISDS Reform Mandate: Overview of issues, options and proposals for reform – framing, principles, objectives and options
  • Looking more closely at certain reform proposals
    • Multilateral Investment Court, with Marc Bungenberg, Saarland University
    • Appellate Body, with Marc Bungenberg, Saarland University
    • Procedural Reforms and Investor rights and obligations, with Lorenzo Cotula, International Institute for Environment and Development
    • Exploring limits on access to ISDS (e.g., exhaustion, restricting claims, filters, pleading standards), with Matthew Porterfield, Georgetown University
    • Termination and withdrawal of consent, with Matthew Porterfield, Georgetown University

 

38th Working Group III Session Preparatory Session (12-13 October 2019, Vienna)

Day 1 Agenda:

Day 2 Agenda:

Relevant Materials: 

 

Resumed 38th Working Group III Session Preparatory Session (18-19 January 2020, Vienna) 

Day 1 Agenda: 

 

Day 2 Agenda: 

 

Relevant Materials


 

39th Working Group III Session Preparatory Session (virtual online series; 11 June 2020 - 29 September 2020 )

  • Frivolous claims and security for costs (June 11, 2020)
  • Treaty interpretation by states parties (July 1, 2020) 
  • Reflective loss and shareholder claims (July 23, 2020)
  • Multiple proceedings, including counterclaims (August 6, 2020 )
  • Dispute prevention and mitigation as well as other means of dispute resolution (August 26, 2020) 
  • ISDS Reform Multilateral Implementations Options (September 8, 2020)
  • Damages (September 29, 2020)

CCSI hosted two stakeholder sessions on the UNCITRAL ISDS Reform Process. The general public was invited to present views on ISDS reform at UNCITRAL to government negotiators.