INVESTMENT-RELATED DISPUTE SETTLEMENT

This report details the results of a 2016 IISD expert meeting regarding the design of a proposed multilateral International Dispute Settlement Agency. The experts advocated for a shift from the narrow investor-state arbitration model toward an inclusive system allowing governments, investors, communities, and individuals to seek justice. The proposed framework includes a three-tiered judicial system (Judicial, Appellate, and Jurisdictional Chambers) alongside non-adversarial mechanisms like fact-finding and mediation. Key discussions centered on expanding jurisdictional scope to include human rights and environmental law, ensuring the independence and diversity of adjudicators, and establishing funding mechanisms to ensure access to justice for resource-poor stakeholders.

• The current international system for investment-related dispute settlement is considered too narrow because it focuses primarily on arbitrating alleged breaches of international treaties and contracts between only two stakeholders: investors and governments.
• A proposed new international regime for investment disputes should be inclusive, providing access to justice for investors, governments, communities, and individuals, and addressing relationships such as Investor–Community and Government–Citizen.
• The proposed Agency would utilize a broad legal basis for resolving disputes, incorporating international law (including human rights), domestic law (such as labour and environmental law), contractual obligations for communities, and private sector standards like the Equator Principles.
• The Draft Agreement proposes three dispute resolution options: fact-finding to elucidate factual disagreements, mediation to facilitate amicable settlements, and a judicial mechanism for binding decisions.
• The proposed judicial arm of the Agency would consist of three specialized chambers: a Judicial Chamber as the court of first instance, an Appellate Chamber to review decisions, and a Jurisdictional Chamber to handle preliminary challenges to jurisdiction.
• To prevent abuse of the system, the Draft Agreement includes a 'clean hands' provision that prohibits stakeholders from submitting claims if they engaged in corruption, fraudulent misrepresentation, concealment, or abuse of process regarding the investment.
• Regarding enforcement, the Draft Agreement suggests that final decisions by the Tribunal be treated as binding judgments of a domestic court within a State Party, while mediation settlements would rely on future international treaties.
• Experts discussed the need for a diverse composition of the Agency, emphasizing the importance of representing different geographic backgrounds, economic systems, and legal traditions to ensure legitimacy.
• Participants suggested that the Agency should be established as a sui generis initiative rather than being housed in existing institutions like ICSID, the PCA, or the WTO, which they viewed as too narrowly focused.
• To ensure access to justice for resource-poor stakeholders, participants proposed several financial mechanisms, including legal aid systems, pro bono institutions, university-associated legal clinics, and third-party funding.

APA

International Institute for Sustainable Development (2016). INVESTMENT-RELATED DISPUTE SETTLEMENT. https://www.iisd.org/system/files/publications/investment-related-dispute-settlement-montreux-expert-meeting.pdf

Chicago

International Institute for Sustainable Development. INVESTMENT-RELATED DISPUTE SETTLEMENT. 2016. https://www.iisd.org/system/files/publications/investment-related-dispute-settlement-montreux-expert-meeting.pdf.

Wikipedia

{{cite report |author=International Institute for Sustainable Development |title=INVESTMENT-RELATED DISPUTE SETTLEMENT |date=2016 |url=https://www.iisd.org/system/files/publications/investment-related-dispute-settlement-montreux-expert-meeting.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{internationalinstituteforsustainabledevelopment2016investmentrelated, author = {{International Institute for Sustainable Development}}, title = {{INVESTMENT-RELATED DISPUTE SETTLEMENT}}, institution = {International Institute for Sustainable Development}, year = {2016}, url = {https://www.iisd.org/system/files/publications/investment-related-dispute-settlement-montreux-expert-meeting.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }