mgimorusjirlRussian Journal of World Politics and Law of NationsRussian Journal of World Politics and Law of Nations2949-6322МГИМО МИД России10.24833/RJWPLN-2023-3-130-149mgimorusjirl-54Research ArticleEconomicsModernization of the Investor-State Dispute Settlement System: Reform or Revolution?LifshitsI. M.

Ilya M. Lifshits – Doctor of Juridical Sciences, Professor, Department of International Law

6a, Vorobiyovskoye shosse, Moscow, Russian Federation, 119285

i.lifshits@edaslawfirm.ruShatalovaA. V.

Anastasiya V. Shatalova – Master of Private International Law, Lawyer

1, 1-i Golutvinskii pereulok, Moscow, Russian Federation, 119180

a.shatalova@edaslawfirm.ruRussian Foreign Trade Academy of the Ministry for the Economic Development of the Russian FederationRussian FederationEDAS Law BureauRussian Federation20232910202423130149Copyright © Lifshits I.M., Shatalova A.V., 20242024Lifshits I.M., Shatalova A.V.Lifshits I.M., Shatalova A.V.Данная работа распространяется под лицензией Creative Commons Attribution 4.0.This work is licensed under a Creative Commons Attribution 4.0 License.https://polities.mgimo.ru/jour/article/view/54

The UN Commission on International Trade Law established Working Group III in 2017. Within the framework of this Working Group, States’ delegations and representatives of international governmental and non-governmental organizations seek to work out solutions problems identified in the investor-State dispute settlement system. Such problems include: the lack of consistency and predictability of arbitral awards; the lack of independence and impartiality of arbitrators; and the cost and duration of proceedings. These problems can be remedied, as the UNCITRAL Secretariat and States have suggested, through reforms to the system. However, the sheer number of proposals make this look more like a revolution.

The authors researched the provisions of bilateral investment treaties, case law of tribunals demonstrating the problems of the ISDS system, as well as the works of Russian and foreign scholars. The methodological basis of the research contains general scientific and special methods.

The authors analyze several options for reforming the ISDS system outlined by Working Group III. First, they consider the Draft Code of Conduct for Arbitrators, the provisions on third-party funding and the establishment of an advisory centre in the ISDS system. Each of these initiatives is able to solve certain problems of the system. Second, the authors analyze documents relating to the creation of an appellate mechanism and a standing multilateral mechanism for the settlement of investment disputes. The authors conclude that initiatives may bring the fundamental changes to the system.

The authors conclude that the only way to remedy the identified shortcomings of the ISDS system is through reform. All the problem can and should be rectified through consistent work, and not by radical changes. Not only will the revolutionary options considered, such as the appellate instance and the court, fail to solve existing problems, but they will actually add new ones. For example, a “revolution” of the system may result in the establishment of the two parallel regimes of investor-state dispute resolution.

English translation from the Russian text: Lifshits I. M., Shatalova A. V. 2023. Obnovlenie sistemy uregulirovaniya sporov mezhdu investorami i gosudarstvami: reforma ili revolyutsiya? Moskovskiy Zhurnal Mezhdunarodnogo Prava [Moscow Journal of International Law]. No. 1. P. 29–46. https://doi.org/10.24833/0869-0049-2023-1-29-46

 

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The authors declare that there are no conflicts of interest present.