EU Trade Commissioner Cecilia Malmström said: ”This is a very welcome decision. In the EU’s bilateral trade talks, we have already moved away from the old ISDS model towards the modern and transparent investment court system. Looking ahead to the long term, the multilateral level will be highly important for managing the growing number of bilateral investment agreements. I am delighted that EU Member States in the Council have now given their unanimous backing to this initiative, that we proposed last September. The EU's new policy on investment is fundamentally based on transparency, so I am glad that the Council decided to make the mandate publicly available. We can now continue working with like-minded partners around the globe, towards launching negotiations to create a multilateral investment court - knowing that EU citizens are fully informed of our negotiating instructions."
Since 2015, the Commission has followed a new approach to investment dispute settlement, which implies including the Investment Court System (ICS) in the EU's bilateral agreements. The Commission has in parallel been working on the multilateral investment court project. The new approach was a direct response to problems identified with the traditional ad-hoc mechanism for arbitrating investment disputes and with the Investor-State Dispute Settlement (ISDS), including its lack of legitimacy, consistency and transparency. The ICS, by comparison, is based on the features of a permanent public domestic or international court, including independent judges, transparent and efficient proceedings, as well as a mechanism for appeals.
However, due to its bilateral nature, the ICS cannot resolve disputes under the whole multitude of existing investment treaties. The multilateral investment court initiative therefore aims to replace existing bilateral mechanisms – including those in the over 1,400 investment treaties concluded by EU member states and other interested countries - with a permanent body to decide on international investment disputes. The multilateral investment court is intended to be an international court empowered to hear disputes over investments between investors and states that will have accepted its jurisdiction over their bilateral investment treaties.
The EU seeks to champion the creation of an international court and ensure that EU’s policy for resolving international investment disputes mirrors the EU’s approach to settling international disputes more generally. This would add a much needed piece to the multilateral system. The multilateral investment court should be for investment dispute settlement what the World Trade Organisation is for trade dispute settlement, thus upholding a multilateral rules-based system.
- Publication date
- 20 March 2018
- Directorate-General for Trade
- Trade topics
- Multilateral Investment Court