Compelling Parties to Mediate Investor-State Disputes: No Pressure, No Diamonds?

27 January 2019, Kobe University Social Science Research Paper Series

23 Pages Posted: 8 Feb 2019 Last revised: 23 Oct 2019

See all articles by James Claxton

James Claxton

Waseda University; Rikkyo University

Date Written: January 21, 2019


There was nothing preordained about arbitration becoming shorthand for investor-state dispute settlement. The ICSID system was built on the assumption that disputing parties would choose conciliation to settle their disputes. Those expectations went unrealized as arbitration rose to prominence, and since that time institutions, parties, and academics have observed that facilitated negotiation could play a greater role in resolving investor-state disputes.

A number of domestic court systems have made mediation part of the fabric of dispute resolution through incentives and compulsions to mediate. Drawing on this experience, this manuscript considers how obstacles to the uptake of investor-state mediation might be overcome through “internal” measures in treaty practice and “external” measures by arbitrators and dispute-resolution institutions. The timing to adopt such measures is opportune. Mediation provisions are increasingly introduced into investment treaties, investor-state mediator trainings are spreading, the Singapore Convention is on the horizon, and recent pronouncements by the IBA and UNCITRAL encourage the use of mediation in place of arbitration to resolve investor-state disputes.

Against this backdrop, the manuscript concludes with a package of proposed measures, engaging various stakeholders, that could be adopted to encourage the greater use of mediation and contribute to shifting a paradigm that has historically placed arbitration at the center of the investor-state dispute settlement system.

Keywords: investor-state mediation, investor-state arbitration, international investment arbitration, investor state dispute settlement (ISDS), alternative dispute resolution (ADR), arbitration, mediation, international economic law

JEL Classification: F21, K33, K41

Suggested Citation

Claxton, James, Compelling Parties to Mediate Investor-State Disputes: No Pressure, No Diamonds? (January 21, 2019). 27 January 2019, Kobe University Social Science Research Paper Series, Available at SSRN: or

James Claxton (Contact Author)

Waseda University ( email )

1-104 Totsukamachi, Shinjuku-ku
Tokyo, 169-8050

Rikkyo University ( email )

3-chome Nishi-ikebukuro
Tokyo, 171-0021

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