ALTERNATIVES TO INVESTOR–STATE DISPUTE SETTLEMENT

The document argues that the investor-state dispute settlement (ISDS) system is flawed due to a lack of representation for the Global South, a lack of checks and balances, and jurisprudential incoherence. It examines 'revolutionary' European proposals like the Investment Court System (ICS) in the TTIP and CETA, which introduce permanent judges and appellate mechanisms. It also analyzes the more ad hoc responses of India, which introduced a model BIT requiring the exhaustion of domestic remedies, and South Africa, which replaced BITs with the Protection of Investment Act 2015 to shift toward state-to-state arbitration. The author recommends that African nations avoid purely domestic remedies and instead pursue regional, institutionalized court systems—such as an AU-EU or China-Africa Investment Court—to ensure fair representation and legal coherence.

• The ISDS system is characterized by a significant representational deficit for Africa; while cases against African states made up over 20% of the total caseload, African arbitrators accounted for less than 4%, and only 2% if limited to sub-Saharan Africa.
• The European Union's proposed Investment Court System (ICS) for the TTIP seeks to replace ad hoc arbitration with a permanent structure featuring a first instance tribunal and an appeal tribunal composed of publicly appointed judges.
• India has overhauled its investment treaty regime by introducing a new model BIT that requires investors to exhaust domestic judicial remedies or demonstrate their futility before pursuing arbitration.
• South Africa's Protection of Investment Act 2015 effectively removes investor-state arbitration, instead allowing the government to consent to international arbitration conducted between the Republic and the investor's home state.
• The author identifies three primary concerns with the existing ISDS framework: the lack of African representation among arbitrators, the absence of meaningful checks and balances in decision-making, and a lack of jurisprudential coherence and discipline.
• The author suggests that African countries could establish regional international court systems, such as an AU-EU Investment Court or a China-Africa Investment Court, to remedy the representational deficit and mature jurisprudence.

APA

Kidane, W. (2018). ALTERNATIVES TO INVESTOR–STATE DISPUTE SETTLEMENT. South African Institute of International Affairs. https://saiia.org.za/wp-content/uploads/2018/01/GA_Th3_DP-kidane_20180129_Alternatives-to-investor-state-dispute-settlement.pdf

Chicago

Kidane, Won. ALTERNATIVES TO INVESTOR–STATE DISPUTE SETTLEMENT. South African Institute of International Affairs, 2018. https://saiia.org.za/wp-content/uploads/2018/01/GA_Th3_DP-kidane_20180129_Alternatives-to-investor-state-dispute-settlement.pdf.

Wikipedia

{{cite report |last1=Kidane |first1=Won |title=ALTERNATIVES TO INVESTOR–STATE DISPUTE SETTLEMENT |publisher=South African Institute of International Affairs |date=January 2018 |url=https://saiia.org.za/wp-content/uploads/2018/01/GA_Th3_DP-kidane_20180129_Alternatives-to-investor-state-dispute-settlement.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{kidane2018alternatives, author = {Kidane, Won}, title = {{ALTERNATIVES TO INVESTOR–STATE DISPUTE SETTLEMENT}}, institution = {South African Institute of International Affairs}, year = {2018}, month = jan, url = {https://saiia.org.za/wp-content/uploads/2018/01/GA_Th3_DP-kidane_20180129_Alternatives-to-investor-state-dispute-settlement.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }