EFILA publishes response to the criticism against ISDS

Since the Lisbon Treaty entered into force almost 6 years ago, the European Commission began  developing its own  EU investment policy. The core of this new investment policy is the conclusion of trade and investment treaties with strategically important countries. In the context of these negotiations, the critique against investor-state dispute settlement (ISDS), which is contained in practically all Bilateral Investment Treaties (BITs) as well as in recently concluded Free Trade Agreements (FTAs) such as the EU-Canada treaty (CETA) and the EU-Singapore treaty, has become more vocal.


Critics have raised concerns about the pro-investor interpretation of investment treaty provisions and their perceived unpredictability, the alleged lack of transparency of arbitral proceedings, the alleged lack of independence and impartiality of arbitrators. Others have suggested that ISDS bypasses the operation of domestic law and national courts and stymies the right of states to regulate. Criticisms have also been raised against the investor-state arbitration process itself, claiming that it allows partisan, self-interested arbitrators to secretly overrule governments with no right of appeal.


EFILA decided to write a paper in order to address the most often voiced myths against ISDS. The paper aims at balancing the currently rather one-sided debate by providing an in-depth analysis, based on arbitration practice and literature. The EFILA paper in response to the criticism against ISDS is available under the following link: http://efila.org.domainpreview.nl/wp-content/uploads/2015/05/EFILA_in_response_to_the-criticism_of_ISDS_final_draft.pdf