The European Union's Proposal for an International Investment Court: Significance, Innovations and Challenges Ahead

Abstract

Rampant discontent with the system that governs the protection of international investment and the functioning of investment tribunals has led to a widespread view that there is an urgent need for reform. This is particularly pronounced in the context of investor-state dispute settlement (ISDS). The European Union (EU) has responded to this need by proposing the creation of an international investment court. With its political weight, the EU confers unprecedented legitimacy on the critics of the current ISDS system and breaks with the latter's background in commercial litigation. The article explores the EU proposal, focusing on its significance, innovative provisions, and projected impact. It argues that the international investment court constitutes a ground-breaking reform proposal for ISDS but it also faces challenges. These need to be tackled in order to avoid affecting the court’s “legal feasibility” and prospective functioning, and the article proposes steps that can help address these issues.

Keywords: international investment court, investment dispute settlement, EU TTIP Proposal, ISDS, investor-state dispute settlement, reform of investment law

JEL Classification: F02, F13, F21, F53, K41, K39, K40, K10, K33, K49, K12, K19, K20, K29, H70, E22, H87, F50, F52