Reply to the European Commission’s Public Consultation on Investment Protection and Investor-to-State Dispute Settlement (ISDS) in the Transatlantic Trade and Investment Partnership Agreement (TTIP)

This report by the International Institute for Sustainable Development (IISD) provides a detailed response to the European Commission's 2014 public consultation on investment protection and Investor-to-State Dispute Settlement (ISDS) within the Transatlantic Trade and Investment Partnership Agreement (TTIP). The IISD analyzes proposed text—much of it derived from the EU-Canada Agreement (CETA)—and argues that there are significant inconsistencies between the Commission's stated goals of protecting the right to regulate and the actual legal language proposed, which the IISD suggests could still allow for expansive arbitral interpretations.

• The IISD argues that the proposed definition of 'investment' is an open-ended, asset-based approach that could lead to unpredictable outcomes. Because it defines investment as "every kind of asset," the IISD contends it may cover assets like offshore bank accounts or minority shareholdings even if they are not associated with a functioning enterprise in the host state.
• The IISD identifies a contradiction between the European Commission's claim that protection applies only after an investment is made and the proposed text. The text defines an investor as someone who "seeks to make, is making or has made an investment," which the IISD asserts extends the treaty's scope to the pre-establishment phase.
• The IISD contends that the proposed Most-Favoured-Nation (MFN) treatment language fails to prevent the "importation of standards" from other treaties. It argues that the term "measure" is broad enough to include other investment treaties, potentially allowing U.S. investors to invoke more favorable guarantees negotiated by EU member states in separate bilateral treaties.
• While the IISD views the closed list of breaches for Fair and Equitable Treatment (FET) as a reasonable improvement, it warns that the provision regarding "legitimate expectations" remains too open. The use of the phrase "a specific representation" is seen as a low threshold that increases legal uncertainty and subjectivity.
• The IISD notes that the proposed approach to indirect expropriation includes a carve-out for non-discriminatory measures protecting public welfare objectives like health and the environment. However, it warns that the phrase "except in rare circumstances" could allow tribunals to undermine this carve-out by deciding what constitutes a rare circumstance.
• The IISD criticizes the proposed 'right to regulate' language in the preamble as being too limited. It argues that recognizing the right to take measures for "legitimate public policy objectives" is narrower than a general right to regulate and leaves the definition of "legitimate" to the discretion of tribunals.
• The IISD supports the EU's move to increase transparency by incorporating the UNCITRAL Rules on Transparency in Treaty-based Investor-State Arbitration, noting that the proposed text goes beyond these rules by extending transparency to all arbitrations under the agreement.
• The IISD argues that the proposed system does not actually favor domestic courts as claimed by the Commission. It points out that investors can still sue states directly in international arbitration without exhausting local remedies first.
• The IISD claims the proposed roster system for arbitrators is merely a backup and does not solve the problems of party-appointed arbitrators. Since the first two arbitrators are still nominated unilaterally by the parties, the IISD suggests the system may still encourage arbitrators to please their nominating parties to secure future appointments.
• The IISD views the proposed mechanisms to dismiss "frivolous claims" as useful for reducing the costs of arbitration, but argues they do not address the more significant problem of expansive interpretations of the merits or jurisdiction by tribunals.
• The IISD supports the general idea of a bilateral appellate mechanism to ensure consistency and predictability, similar to the WTO model, but notes that the provided draft provisions are too vague to determine if the mechanism will actually resolve existing ISDS problems.

APA

Bernasconi-Osterwalder, N. (2014). Reply to the European Commission’s Public Consultation on Investment Protection and Investor-to-State Dispute Settlement (ISDS) in the Transatlantic Trade and Investment Partnership Agreement (TTIP). International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/iisd_reply_eu_isds_ttip.pdf

Chicago

Bernasconi-Osterwalder, Nathalie. Reply to the European Commission’s Public Consultation on Investment Protection and Investor-to-State Dispute Settlement (ISDS) in the Transatlantic Trade and Investment Partnership Agreement (TTIP). International Institute for Sustainable Development, 2014. https://www.iisd.org/system/files/publications/iisd_reply_eu_isds_ttip.pdf.

Wikipedia

{{cite report |last1=Bernasconi-Osterwalder |first1=Nathalie |title=Reply to the European Commission’s Public Consultation on Investment Protection and Investor-to-State Dispute Settlement (ISDS) in the Transatlantic Trade and Investment Partnership Agreement (TTIP) |publisher=International Institute for Sustainable Development |date=June 2014 |url=https://www.iisd.org/system/files/publications/iisd_reply_eu_isds_ttip.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{bernasconiosterwalder2014reply, author = {Bernasconi-Osterwalder, Nathalie}, title = {{Reply to the European Commission’s Public Consultation on Investment Protection and Investor-to-State Dispute Settlement (ISDS) in the Transatlantic Trade and Investment Partnership Agreement (TTIP)}}, institution = {International Institute for Sustainable Development}, year = {2014}, month = jun, url = {https://www.iisd.org/system/files/publications/iisd_reply_eu_isds_ttip.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }