Transparency and participatory aspects of investor-state dispute settlement in the EU ‘new wave’ trade agreements

Abstract

This article scrutinizes the investment chapters in the new EU Free Trade Agreements from a transparency perspective. The article examines the claims that the dispute settlement mechanisms in the new treaties are sufficiently participatory and more transparent than their predecessors. Procedural standards related to confidentiality of proceedings shall be analysed in the context of existing transparency safeguards in investment arbitration. In addition to procedural guarantees of transparency, the article examines relevant substantive rules affecting participatory aspects of dispute settlement. Furthermore, the article discusses forum-shopping strategies of the parties in the field of investment-related disputes, including internal forum-shopping and parallel proceedings using different procedural mechanisms. In this context, lessons from other fields such as international commercial arbitration related to transparency (in cases in which public interest is present) are highlighted. The proposal for the establishment of an integrated, multilateral court for investment cases is also invoked.

Vulnerability Theory as a Paradigm Shift in International Investment Law: Reimagining the Role of the State

“…28 Other research has examined how, if at all, arbitrators include sustainable development or environmental considerations while interpreting IIAs, 29 or sought to address the role of the state's 'right to regulate' and its countervailing effects on foreign investment protection. 30 This gradual accumulation of scrutiny has led to a myriad of criticisms against IIL, targeting the vagueness of some of its foundational instruments (IIAs) and the principles found therein (such as that of fair and equitable treatment (FET)), 31 the shortcomings of its dispute settlement method (ISDS), 32 the ad hoc nature, as well as the inconsistent, and often unpredictable outcomes produced by the arbitral system, 33 the effects of ISDS claims on efforts of transitional justice 34 and national legislation alongside the so-called 'regulatory chill' these claims create, 35 the lack of transparency in ISDS procedures despite the inherent public character of many foreign investment disputes, 36 IIL's constraints on democratic processes in national systems 37 and IIL's distortive effects on national private law. 38 Last but not least, comprehensive scholarship has drawn attention to the asymmetrical protection offered by IIL, 39 whereby the various treaties effectively reserve the most powerful protections for the least vulnerable actors, 40 while leaving the most vulnerable actors out of the equation.…”