This research paper seeks to analyze whether the Mauritius Convention on Transparency could provide a useful model for broader reform of the investor-State arbitration framework. To this end, it proposes a possible roadmap that could be followed if States were to decide to pursue a reform initiative aimed at replacing or supplementing the existing investor-State arbitration regime in international investment agreements (IIAs) with a permanent investment tribunal and/or an appeal mechanism for investor-State arbitral awards.
The reform plan is developed on three main blocks:
- The design of an International Tribunal for Investments (ITI);
- The design of an Appeal Mechanism (AM) for investor-State arbitral awards;
- The establishment of a multilateral instrument (the Opt-in Convention) to extend those new dispute resolution options to States’ existing IIAs.
The main pillars of the reform initiative reviewed in this paper are the following. First, what is envisaged is a truly multilateral dispute settlement system, resulting in the creation of one single ITI potentially competent to resolve investment disputes concerning as many States as would opt into it, and/or in the creation of one single AM potentially competent to serve as appellate tribunal for investor-State arbitral awards across all States’ IIAs. Second, the reform initiative is directed at one discrete issue of IIA reform, i.e. the treaties’ investor-State arbitration provisions, and avoids possible controversies on the reform of substantive protection standards for which consensus may be more difficult to achieve. Third, the mechanism of the Opt-in Convention effectively releases States from the burden of pursuing the potentially complex and long amendment procedures set out in the existing 3,000 IIAs.
Against this backdrop, the paper first analyzes the main challenges that would be faced when designing the ITI and the AM respectively and sets out the principal architectural and institutional options available to States when setting up those dispute settlement bodies. These include the options available in relation to the determination of the law governing the proceedings before the new dispute settlement bodies, their composition and structure, the systems of control over their awards and decisions, and questions of enforcement.
The paper then addresses the legal issues to be considered in drafting the Opt-in Convention, which would be the instrument by which the Parties to IIAs express their consent to submit disputes arising under their existing IIAs to the ITI/AM. While the Opt-in Convention would be primarily aimed at the existing IIA network, it would be without prejudice to the possibility that future investment treaties may refer to the new dispute resolution options, as States may deem appropriate.
The research paper concludes that the challenges involved in broader reforms of the investor-State arbitration regime are substantially more complex than the introduction of a transparency standard in investment treaties. At the same time, the paper also shows that the Mauritius Convention could provide a useful model if States wish to pursue such broader reform initiatives at a multilateral level.