The Law and Practice of International

Courts and Tribunals 18 (2019) 303–313

brill.com/lape

Reforming International Investment Arbitration:

an Introduction

Chiara Giorgetti
University of Richmond
cgiorget@richmond.edu

Laura Létourneau-Tremblay
Pluricourts, University of Oslo
laura.letourneau-tremblay@jus.uio.no

Daniel Behn
Queen Mary University of London School of Law
d.behn@qmul.ac.uk

Malcolm Langford
Department for Public and International Law, University of Oslo
malcolm.langford@jus.uio.no

For over a decade, investor-state dispute settlement (ISDS) has suffered a so-
called legitimacy crisis.1 Critics have argued that ISDS is pro-investor, biased
against developing countries, beset by incoherent jurisprudence and plagued
by a lack of transparency and excessive costs and compensation.2 While the

1 Amongst the first scholarly critiques was Susan D. Franck’s, “The Legitimacy Crisis in
Investment Treaty Arbitration: Privatizing Public International Law through Inconsistent
Decisions,” 73 Fordham Law Review (2005), 107. For an analysis of the trajectory of the de-
bate, see Malcolm Langford and Daniel Behn, “Managing Backlash: The Evolving Investment
Treaty Arbitrator?,” 29(2) European Journal of International Law (2018), 551–580.
2 See e.g. Gus Van Harten, “Arbitrator Behaviour in Asymmetrical Adjudication: An Empirical
Study of Investment Treaty Arbitration”, 50 Osgoode Hall Law Journal (2012), 211, 251;
Zachary Douglas, “The MFN Clause in Investment Arbitration: Treaty Interpretation off the
Rails”, 2 Journal of International Dispute Settlement (2011), 97; George Kahale, “Is Investor-State
Arbitration Broken?”, 7 TDM (2012), www.transnational-dispute-management.com, accessed
31 October 2019.

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304 GIORGETTI et al.

system has its defenders,3 ISDS continues to attract controversy.4 Nine out of
ten of the over 2,600 international investment agreements5 permit arbitral
claims by foreign investors against states, and the number of cases has surged
to well over one thousand with a significant number challenging directly the
regulatory powers of states. Thus, while ISDS has emerged as a clear dispute
resolution tool of choice, it has also become a lightning rod for critique.6
The initial response of states to this ISDS phenomenon was a patchwork of
scattered unilateral, bilateral and plurilateral reforms.7 Initiatives have ranged
from denouncing the ICSID Convention and terminating investment treaties
to the development of new model treaties, the replacement of arbitration
with a court system8 and substantive reform of existing treaties;9 while ICSID
and other arbitral centers have revised their procedural rules.10 However, in

3 J ames Fry, “International Human Rights Law in Investment Arbitration: Evidence of In-
ternational Law’s Unity”, 18 Duke Journal of International and Comparative Law (2007), 77.
The regime also has clear support from various states.
4 “The arbitration game: governments are souring on treaties to protect foreign investors”,
The Economist, 11 October 2014.
5 Mostly bilateral agreements, but some plurilateral ones. About 90% of the investment
treaties available and coded on UNCTAD up to 2017 include ISDS (see UNCTAD Investment
Policy Hub (www. https://investmentpolicy.unctad.org/); see also Joachim Pohl, Kekeletso
Mashigo and Alexis Nohen, “Dispute Settlement Provisions in International Investment
Agreements: A Large Sample Survey”, OECD Working Papers on International Investment,
2012/02 (2012) (96% of the 1,660 bilateral investment treaties surveyed contain ISDS
language)).
6 See the PITAD database: pitad.org. Daniel Behn, Malcolm Langford, Ole Kristian Fauchald,
Runar Lie, Maxim Usynin, Taylor St. John, Laura Létourneau-Tremblay, Tarald Berge
and Tori Loven Kirkebø, PITAD Investment Law and Arbitration Database: Version 1.0,
Pluricourts Centre of Excellence, University of Oslo (31 January 2019).
7 Taylor St. John, The Rise of Investor-State Arbitration: Politics, Law, and Unintended
Consequences (OUP, 2018), Ch. 8; Malcolm Langford, Daniel Behn and Ole Kristian
Fauchald, “Backlash and State Strategies in International Investment Law”, in Tanja
Aalberts and Thomas Gammeltoft-Hansen (eds.), The Changing Practices of International
Law (CUP, 2018), 70–102.
8 E.g., Canada-European Union Comprehensive Economic and Trade Agreement (CETA).
9 E.g., NAFTA 2.0 (United States-Mexico-Canada Agreement (USMCA)). The Energy Charter
Treaty (ECT) has recently initiated a new process to modify the ECT according to the
mandate of its state contracting parties.
10 I CSID has initiated a number of processes over the past decade to reform rules applying
in ICSID disputes and a rules amendment process is occurring at the moment of writing.
Other arbitral institutions (principally the ICC and SCC) have modified or added rules to
allow for better administration of ISDS disputes.

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Reforming International Investment Arbitration: an Introduction 305

late 2017, reform processes moved into a higher gear.11 The United Nations
Commission on International Trade Law’s (UNCITRAL) Working Group III was
tasked by states to reform ISDS, and was given a broad mandate to address the
legitimacy, real and perceived, of the current regime.12
How states, in a highly-decentralized regime, could agree on a multilater-
al reform process is a bit of a puzzle. Arguably, it was the result of a perfect
storm. The reasons are partly substantive: developed and developing coun-
tries now shared a common set of concerns about the conduct of ISDS – a
result of an ever-widening range of states facing claims, and particularly those
claims challenging key policies in Western states.13 However, it is also a mat-
ter of timing, technocracy, politics and message framing. UNCITRAL Working
Group III (WGIII) was open for a new mandate; the UNCITRAL Secretariat laid
the groundwork through a series of scoping studies; the European Union (EU)
reasoned that its campaign for an investment court might be better housed
in a multilateral setting; and UNCITRAL could boast that it had just set up a
model for multilateral reform of ISDS through the new Mauritius Convention
on Transparency in Treaty-based Investor-State Arbitration.
Whatever the reason, the mandate is distinct but also limited. First, unlike
most UNCITRAL reform processes, the process is to be “government-led” with
experts to play observer and advisory roles. Secondly, reform is to be problem-
driven rather than determined by solutions arrived at in advance. This is
clear from the wording of the staggered mandate. The Working Group has
proceeded in three phases: “identify and consider concerns regarding ISDS”;
consider “whether reform was desirable”; and “develop any relevant solutions
to be recommended to the Commission”. Thirdly, noting that the criticism
about investor-state arbitration is often polarized, UNCITRAL highlighted that
its work “should not be undertaken based on mere perceptions, but on facts”.14

11 The process emerged formally in 2016 when the UNCITRAL Commission requested the
UNCITRAL Secretariat to review how its background work on possible ISDS reform might
best be carried forward: UN Doc. No. A/CN.9/890. See discussion of history in Malcolm
Langford, Daniel Behn, Gabrielle Kaufman-Kohler and Michele Potesta, “UNCITRAL and
Investment Arbitration Reform: Matching Concerns and Solutions – An Introduction”, 21
Journal of World Investment and Trade (2020).
12 United Nations Commission on International Trade Law (UNCITRAL), “Report of
Working Group III (Investor-State Dispute Settlement Reform) on the work of its thirty-
fourth session (Vienna, 27 November–1 December 2017)”, UN Doc. No. A/CN.9/930/Rev.1
(19 December 2017).
13 For example, five new cases were filed against Spain at ICSID in 2019, see ICSID Secretariat,
The ICSID Caseload Statistics, vol. 2 (2019), 24.
14 U NCITRAL, “Report of the United Nations Commission on International Trade Law”,
Fiftieth session (3–21 July 2017), UN Doc. No. A/72/17 (2017), para. 245.

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306 GIORGETTI et al.

This has opened the space for stakeholders from academia to civil society and
practitioners to play a key role in providing evidence rather than advocating
particular positions, although with some notable exceptions.
Yet, while the problem-centric model makes the reform process consider-
ably open-ended, it is crucially limited in one aspect. The mandate is limited to
procedural reforms (“regarding ISDS”) rather than the underlying substantive
rules found in investment treaties. This carve-out has attracted critique from
some states and civil society organizations. They allege that the core concerns
with the system cannot be addressed without accompanying substantive re-
form of the underlying rules as well.15 However, addressing the substance of
treaties proved a bridge too far for the Working Group. No sufficient consensus
exists amongst states on whether there are common problems with the under-
lying investment treaties. Moreover, only a fragile consensus existed initially
for wide-ranging procedural reforms – with considerable opposition to the pro-
cess from states such as the United States, Russia, Japan and Israel – and there
were pragmatic concerns about the feasibility of addressing the cornucopia
of diverse investment treaties within the confines of a single working group.
Interestingly though, as the process has advanced, the boundary between sub-
stantive and procedural reform is not always clearly visible16 and some pro-
posed procedural reforms will perforce have substantive implications.17
The core of the reform process is thus how to address the peculiarities that
have emerged from the combination of substantive investor rights under in-
ternational law with a particular form of international dispute settlement –
arbitration, where the state of the claimant-investor does not appear in the
proceeding and the host state’s actions are largely limited to defending claims
as a respondent. This is the status quo in ISDS, and while slightly different in
form depending on the arbitral institution hosting the arbitration, the arbitra-
tors selected, and the investment treaty that is to be applied, it possesses a
fundamental structure. ISDS arbitrations, with the exception of a tiny hand-
ful of cases, all flow one-way and are stacked on each side with a single cat-
egory of litigant: a foreign investor on the claimant side and a state hosting
the investment on the respondent side. ISDS arbitrations are also ad hoc (in
the sense that there is no centralized institutional authority) and one-off (they
are constituted to resolve a particular dispute). The tribunal is composed of

15 Anthea Roberts and Taylor St. John, “UNCITRAL and ISDS Reforms: Agenda-Widening
and Paradigm-Shifting”, EJIL: Talk!, 20 September 2019.
16 Malcolm Langford and Anthea Roberts, “UNCITRAL and ISDS Reform: Hastening
Slowly”, EJIL: Talk!, 29 April 2019.
17 E.g., Lise Johnson, Lisa Sachs, Brooke Güven and Jesse Coleman, Clearing the Path:
Withdrawal of Consent and Termination as Next Steps for Reforming International
Investment Law, CCSI Policy Paper, April 2018.

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Reforming International Investment Arbitration: an Introduction 307

arbitrators, not judges; and these arbitrators are appointed by the parties to the
dispute, are only vested with decision-making authority over a single dispute,
and are applying default rules on transparency that, while far from completely
opaque, are not comparable to a fully public system of adjudication, which
must also meet demands for transparency, representativeness and diversity.18
While investor-state arbitration was initially applauded in its early days – as
a solution to many problems experienced in resolving foreign investment dis-
putes with sovereigns (especially those related to access to domestic courts),
it has struggled to maintain its legitimacy and partly its effectiveness as it has
expanded and its public law dimensions have become more visible.
During its November 2018 meeting in Vienna, WGIII identified six issues to
be addressed by the reform process in its first stage of work: (1) excessive legal
costs; (2) duration of proceedings; (3) legal consistency; (4) decisional correct-
ness; (5) arbitral diversity; and (6) arbitral independence and impartiality.19
A challenge for WGIII in those early meetings was in assessing whether the
identified concerns about ISDS were well-founded and serious enough to
justify systemic reforms. Nonetheless, in April 2019, WGIII met in New York
and agreed that reform was necessary.20 Moreover, several other issues have
emerged in the process such as third-party funding, prevention of investment
disputes and calculation of damages.21
Reform has thus become the operative word in relation to ISDS and its fu-
ture; and the process has begun to gather some speed.22 However, an open
question persists on what reform of the status quo will look like, and, even
more importantly, whether the replacement will work. In agreeing to pursue
reform of ISDS, participating states agreed to focus on discussing, elaborat-
ing and developing multiple potential reform solutions simultaneously, as op-
posed to sequentially.23 While all of the reform possibilities are not all on the
table yet, many of them are, and early in the October 2019 session in Vienna
they coalesced into a programme of future work.

18 Although an attempt has been made with transparency: United Nations Convention on
Transparency in Treaty-based Investor-State Arbitration (New York, 2014) (the “Mauritius
Transparency Convention”).
19 U NCITRAL, “Possible reform of investor-State dispute settlement (ISDS)”, UN Doc. No. A/
CN.9/WG.III/ WP.149 (5 September 2018).
20 U NCITRAL, “Report of Working Group III (Investor-State Dispute Settlement Reform) on
the work of its thirty-seventh session (New York, 1–5 April 2019)”, UN Doc. No. A/CN.9/970
(9 April 2019).
21 Malcolm Langford, “UNCITRAL and Investment Arbitration Reform: A Little More
Action”, Kluwer Arbitration Blog, 21 October 2019.
22 Julian Arato, “ISDS Reform: Working Group III Gets Down to Brass Tacks”, International
Litigation Blog, 22 October 2019.
23 U NCITRAL, supra note 19, paras. 81–82.

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308 GIORGETTI et al.

The proposals range from the transformative, which require major struc-
tural overhauls, to small tweaks to the status quo. Structural proposals so far
include an appellate mechanism, a multilateral investment court, a court plus
an appellate mechanism and an advisory centre for developing states;24 while
non-structural options include “other potential solutions”,25 such as a code of
conduct for arbitrators, restricting reflective loss claims for shareholders, regu-
lating third-party funding and expanding the possibility for counter-claims,
together with a range of hybrid proposals to increase state control of treaty
interpretation, new mechanisms for selection of arbitrators, and alternative
dispute resolution.26 However, while the number of general models are often
condensed into a few base features (i.e., a court, a court and appellate mecha-
nism, ISDS plus appellate mechanism, state-state arbitration, a better ISDS, and
no ISDS), the details and options that must be considered in order to construct
each of these different models are both numerous and complex. Thus, states
and scholars have also begun to identify how a single reform package might
encompass all of the proposed reforms, a so-called Multilateral Convention
on Procedural Reform, that would permit states to opt-in for their preferred
options and accept bilateral obligations concerning investment disputes when
their choices are matched by other states.27
Another challenge facing WGIII is the geopolitical dynamics and the di-
vergent ideology within the UNCITRAL process. States have been neatly
categorized as one of three types – incrementalists, systemic reformers, or
paradigm-shifters,28 and their relative support and engagement determines
the speed and substance of the reform process. For the incrementalists, the
options for reform are not so different from the manner in which modifica-
tions to the system have already occurred: from within, through de-centralised
and largely informal processes – led by those in the arbitration community –
that adapt and modify existing practices in light of the problems identified.
Systemic reformers maintain that they can accept a world in which some form
of ISDS exists, but only if there is a systemic overhaul to many of the features

24 With a discussion as to whether this should be open to small- and medium-sized investors.
25 U NCITRAL, supra note 19.
26 U NCITRAL, “Possible reform of investor-State dispute settlement (ISDS)”, UN Doc. No. A/
CN.9/WG.III/WP.166 (30 July 2019).
27 See Anthea Roberts and Taylor St. John, “UNCITRAL and ISDS Reform: Visualising
a Flexible Framework”, EJIL: Talk!, 24 October 2019; Stephan W. Schill and Geraldo
Vidigal, “Designing Investment Dispute Settlement à la Carte: Insights from Comparative
Institutional Design Analysis”, 18 Law and Practice of International Courts and Tribunals
(2019).
28 Anthea Roberts, “Incremental, Systemic, and Paradigmatic Reform of Investor-State
Arbitration”, 112 American Journal of International Law (2018).

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Reforming International Investment Arbitration: an Introduction 309

that are central to how ISDS currently operates. The EU’s proposal for a mul-
tilateral court of first instance and appellate review is a key example, and is
virtually identical to the investment court system that the EU is using as a
non-negotiable component in its recent regional trade and investment trea-
ties, including in its recent trade agreement with Canada. However, systemic
reformers such as China are currently restricting themselves to proposing
adding an appellate mechanism on top of a standard or somewhat reformed
version of ISDS, stopping short of seeking to abolish arbitration under invest-
ment treaties.29 The principal aims of paradigm-shifters would not stop short
at abolishing arbitration, elimination of ISDS may be the goal. A minority of
states, with South Africa and Brazil being the most visible, would accept mod-
els that may only allow access to some form of arbitration after the exhaustion
of local remedies, or a form of arbitration that removes any direct right of ac-
tion by investors to initiate claims, such as a system of state espousal under a
state-state dispute settlement mechanism.
Given the large spectrum of views on what problems require reform and
what reforms best address the most problems, states have identified the
need for objective, ideologically neutral, and data-driven research and work-
ing methods that can provide input into the process. One result is that the
UNCITRAL Secretariat is tasked with synthesizing existing research, discussing
options, and most likely providing core treaty text. Another is that all observ-
ers have been invited to contribute research on all topics. In addition, the ISDS
Academic Forum, of which the editors of this symposium are members, re-
ceived a specific request in April 2019 to provide research on the topic of selec-
tion and appointment of adjudicators.

…
This Special Issue of The Law and Practice of International Courts and Tribunals
grew out of these research demands. It contains selected papers from the
first major conference of the ISDS Academic Forum, which was held at the
University of Oslo on 31 January–1 February 2019.30
The ISDS Academic Forum was formed in late 2017 to “exchange views, ex-
plore issues and options, test ideas and solutions, and make a constructive con-
tribution to the ongoing discussions on possible reform of ISDS, in particular

29 U NCITRAL, “Possible reform of investor-State dispute settlement (ISDS) – Submission

from the Government of China”, UN Doc. No. A/CN.9/WG.III/WP.177 (19 July 2019).
30 A second collection of papers from the conference will be published in the Journal of
World Investment and Trade.

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310 GIORGETTI et al.

the discussions in the context of UNCITRAL’s Working Group III (WGIII)”.31

The membership of almost one hundred scholars is quite diverse and all mem-
bers are required to publicly disclose all engagements in arbitral practice. In
addition to generating research, the group has also prepared language glos-
saries for states on ISDS, hosted side events at UNCITRAL, provided ongoing
analysis of the process, and facilitated members’ participation as observers in
the various sessions.
The contributions to the present Special Issue offer in-depth analysis on
some of the concerns identified and reform options proposed by WGIII in its
work on reforming ISDS. Each of the articles is presented in the spirit of pro-
viding research-driven guidance that can inform the discussions and debates
on reforming ISDS. By examining some of the concerns identified in ISDS – in-
cluding their underlying causes – the contributions suggest the most appropri-
ate reform alternative or direction.
The Special Issue begins with three contributions that assess specific is-
sues related to systemic reforms. The first article, by Stephan W. Schill and
Geraldo Vidigal, investigates the possibility of a comprehensive systemic
change by assessing the feasibility of designing investment dispute settlement
“à la carte” with a Multilateral Investment Court (MIC) coexisting with other
modes of dispute resolution.32 Drawing on comparative institutional design
analysis – analyzing the experiences from international dispute settlement
more generally – the authors argue that a model of “dispute settlement à la
carte” would preserve the ability of states to choose their preferred means of
adjudication, while enhancing legal certainty and coherence in investment
dispute settlement. Such a Multilateral Institution for Dispute Settlement on
Investment (MIDSI) is envisioned as a permanent body whose members are
elected by a multilateral assembly of states parties to the MIDSI Agreement –
participation in the institution itself would be independent from submission
to the jurisdiction of any dispute settlement options it offers. This multilateral
institutional framework would allow participants to make use of their pre-
ferred mode of dispute settlement, but still provide the structure for multi-
lateral cooperation in respect of the settlement of investment disputes and
potentially also in shaping the future of the international investment regime
on substance.

31 Website of the ISDS Academic Forum: http://bit.ly/isds-academic-forum.

32 Stephan W. Schill and Geraldo Vidigal, “Designing Investment Dispute Settlement à la
Carte: Insights from Comparative Institutional Design Analysis”, 18 Law and Practice of
International Courts and Tribunals (2019), 314.

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Reforming International Investment Arbitration: an Introduction 311

The second piece, by Wolfgang Alschner, addresses the issue of the “correct-
ness” of arbitral decisions, a central concern in the current efforts to reform
investor-state arbitration.33 The article empirically evaluates the effective-
ness of the three existing ISDS correction mechanisms that can guide future
tribunals in not repeating past mistakes. The mechanisms analyzed include
review by annulment committees, domestic courts, or treaty parties through
authoritative interpretations. Alschner shows empirically that annulled or set-
aside decisions continue to be cited by later tribunals and that authoritative
interpretations are disregarded. This conclusion serves as an important warn-
ing that past arbitral “mistakes” (which might also be perceived as “incorrect”
decisions to use the unfortunate nomenclature of UNCITRAL) are repeated
and continue to shape the development of investment law. As policy remedies,
Alschner thus proposes a more explicit shepardization of awards, tighter rules
on what counts as precedent, and broader institutional reforms as possible so-
lutions to improve arbitral decision-making.
Addressing concerns related to arbitral independence and impartiality,34
as well as the tricking absence of geographic and gender diversity,35 James
Devaney proposes, in the third piece of the symposium, the creation of an in-
dependent panel for the scrutiny of investment arbitrators (IPSIA).36 Such a
panel would address some of the criticisms levelled at ISDS more generally,
without removing completely the role that parties currently play, by suggest-
ing eligible candidates for selection as arbitrator. IPSIA could be tasked to
scrutinize suggested candidates and facilitate the appointment of the highest-
qualified individuals to investment arbitral tribunals. Aligning more towards a
model of improvement of ISDS, the article further discusses the procedures to

33  olfgang Alschner, “Correctness of Investment Awards: Why Wrong Decisions Don’t Die”,
W
18 Law and Practice of International Courts and Tribunals (2019), 345. UNCITRAL, “Possible
reform of investor-State dispute settlement (ISDS): Consistency and related matters”, UN
Doc. No. A/CN.9/WG.III/WP.150 (28 August 2018); see also Anna De Luca, Mark Feldman,
Martins Paparinskis and Catharine Titi, “Responding to Incorrect ISDS Decision-Making:
Policy Options”, 21(1) Journal of World Investment and Trade (2020).
34 Chiara Giorgetti, Steven Ratner, Jeffrey Dunoff, Shotaro Hamamoto, Luke Nottage,
Stephan Schill and Michael Waibel, “Independence and Impartiality in Investment
Dispute Settlement: Assessing Challenges and Reform Options”, 21(1) Journal of World
Investment and Trade (2020).
35 Andrea K. Bjorklund, Daniel Behn, Susan Franck, Chiara Giorgetti, Won Kidane, Arnaud
de Nanteuil and Emilia Onyema, “The Diversity Deficit in International Investment
Arbitration”, 21(1) Journal of World Investment and Trade (2020).
36 James Devaney, “An Independent Panel for the Scrutiny of Investment Arbitrators: An
Idea Whose Time has Come?”, 18 Law and Practice of International Courts and Tribunals
(2019), 369.

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312 GIORGETTI et al.

appoint members of the panel, propose and scrutinize candidates, as well as

the advisory nature of the panel.
Next, Szilárd Gáspár-Szilágyi investigates the role of domestic courts in
investor-state disputes in the context of proposed possible paradigmatic
changes to ISDS.37 More specifically, he examines whether investors rely on
the domestic courts of the host state prior to initiating a claim; and if they do,
what are some of the reasons explaining such reliance, including whether or
not such reliance is a worthwhile pursuit for foreign investors at all. He argues
that his findings should help UNCITRAL WGIII conceptualize the meaning of
“investor-state dispute” by realizing that domestic proceedings are also part of
the larger concept of ISDS. ISDS occurs on multiple levels, in various forms,
before multiple fora. The relationship between domestic and international
methods of ISDS should therefore inform the reform discussion. The article
concludes by analyzing a “complementary model” of ISDS reform where in-
vestors would be required to resort to domestic courts first before any inter-
national proceeding. Such an approach might resonate for states like South
Africa38 and Indonesia.39
The Special Issue concludes with an historical examination of the origins
of the backlash that has led to the current initiative to reform ISDS. Georgios
Dimitropoulos explains that that backlash arose from the rising tensions origi-
nating from certain historical path-dependencies in the field.40 By tracing the
historical roots, he identifies three main tensions: contractualism vs. unilater-
alism; economic rationality vs. political rationality; flat world view vs. diverse
world view. Dimitropoulos suggests that two main lessons may be learned by
identifying and understanding these historical tensions. First, the reform dis-
cussion needs to be informed by the study of systems of domestic investment
law and policy; and, second, the reform discussion should move beyond its
procedural confines, and include reform of substantive law as well.

37 Szilárd Gáspár-Szilágyi, “Let us Not Forget about the Role of Domestic Courts in Settling
Investor-State Disputes”, 18 Law and Practice of International Courts and Tribunals
(2019), 389.
38 U NCITRAL, “Possible reform of Investor-State dispute settlement (ISDS) – Submission
from the Government of South Africa”, UN Doc. No. A/CN.9/WG.III/WP.176 (17 July 2019),
paras. 43–46.
39 U NCITRAL, “Possible reform of Investor-State dispute settlement (ISDS) – Comments from
the Government of Indonesia”, UN Doc. No. A/CN.9/WG.III/WP.156 (9 November 2018),
paras. 11–12.
40 Georgios Dimitropoulos, “The Conditions for Reform: A Typology of ‘Backlash’ and
Lessons for Reform in International Investment Law and Arbitration”, 18 Law and Practice
of International Courts and Tribunals (2019), 416.

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Reforming International Investment Arbitration: an Introduction 313

The existing scholarship on ISDS has provided the basis for identifying,
investigating and assessing many of the concerns with the current system.
Moreover, scholars have engaged actively in the process, seeking to provide
research on specific issues, insight into the causal mechanisms that produce
arbitral awards that allegedly lack consistency, coherence and/or correctness,
and the causes of a continued lack of diversity in ISDS, and suggesting and
evaluating possible reform options, such as the selection and appointment of
adjudicators, third-party funding and a code of conduct.41
Yet, UNCITRAL-centric research has its challenges: policy options can be
assessed and explained, but the key and intertwined choices rest with the
states; empirical data has limitations and is not available on all aspects of
ISDS (e.g., third-party funding); and the legal and quantitative modelling of
future scenarios is complicated by the number of proposals and the need to
synthesize the lessons of multiple international courts and arbitral tribunals.
Equally demanding for scholars engaged in the process is maintaining their
own neutrality: distinguishing between their normative, doctrinal and em-
pirical perspectives and managing their different hats. Some scholars are en-
gaged as experts on state, civil society, practitioner and investor delegations to
UNCITRAL WGIII and some also act as arbitrators, counsel and state advisors
in ISDS. Yet, the possible beauty of the UNCITRAL WGIII is that it has provided,
on one hand, a clear receptacle for integrating scholarly research into public
policy and, on the other hand, a forum for scholarly accountability given the
open, transparent and multi-stakeholder nature of the process.
UNCITRAL WGIII’s attempt to wrest reform out of a complex system with
diverse political views and interests is notable. It is the editors’ hope that the
contributions selected for this Special Issue assist states’ delegates, policy
advisers and all stakeholders in the process of ISDS reform by providing and
explaining new ideas and shedding the light on – and possibly challenging –
old ones.

41 See for example: https://www.jus.uio.no/pluricourts/english/projects/leginvest/academic

-forum/papers/.

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