Idea Of A Multilateral Investment Court Makes Headway, Proponents Say 15/12/2016 by Catherine Saez, Intellectual Property Watch Leave a Comment Share this:Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Facebook (Opens in new window)Click to email this to a friend (Opens in new window)Click to print (Opens in new window)The European Union and Canada held an informal meeting in Geneva this week to present a project for a multilateral investment court to handle global investor-state disputes, hoping to draw interest and questions by other country delegates, according to sources. Time will be needed to gain acceptance of the idea, they said, and the next opportunity will be at the January World Economic Forum in Davos. The event was held at World Trade Organization, but the two sides said it was not related to WTO, rather just a convenient place to meet. The European Commission and the Canadian government organised a two-day meeting on 13-14 December to introduce their joint project of a multilateral investment court and have an informal exchange with others. An audience of some 160 attendees from 60 countries and 9 international organisations attended, they said yesterday during a technical briefing. No formal conclusions were issued after the meeting, an EU source said. The goal, according to a EU source, was to start off discussions and familiarise other with the idea of creating an international court dealing with investment disputes, which are currently dealt with by ad hoc investment state dispute settlements. According to an EU Commission fact sheet of 13 December, the multilateral investment court “would adjudicate disputes under future and existing investment treaties.” According to the EU source, the EU is involved in some 1,400 treaties out of the 3,200 currently in force worldwide. The multilateral investment court “would replace the bilateral Investment Court Systems included in the recent EU level trade and investment agreements,” the fact sheet said. Four Objectives According to the EU source, speaking at the technical briefing, the initiative is seeking to address four main issues. The first is the risk of legitimacy problems with the current system, and the perception that the ad hoc system is not dealing well enough with public issues. The second is a question of consistency between those 3,200 current agreements, a large number of which are very similar. However. under the current system, the same legal issue could receive different answers according to the panel it is submitted to. The third issue is the fact that there is currently no possibility of appealing judgments. Technical annulments are possible but only under very narrow grounds, the source said. Lastly, there have been some 700 disputes over the years and having those disputes under the same mechanism would answer questions of efficiency and practicality, he said. The joint initiative stems from the Comprehensive Economic and Trade Agreement (CETA) between Canada and the EU. According to the fact sheet, “The proposal for a multilateral reform has also been met with increasing interest by many third countries. The signed EU-Canada trade deal (CETA) and the EU-Vietnam trade agreement both contain a reference to the establishment of a permanent multilateral investment court. The EU includes similar references in all of its ongoing negotiations involving investment.” The EU-Canada CETA Joint Interpretative Instrument [pdf] states that “The EU and Canada will work expeditiously towards the creation of the Multilateral Investment Court. It should be set up once a minimum critical mass of participants is established, and immediately replace bilateral systems such as the one in CETA, and be fully open to accession by any country that subscribes to the principles underlying the Court.” The EU Commission is carrying out an impact assessment on the initiative, and a public consultation is expected to be launched in the coming days, the EU source said. The impact assessment report is expected to be delivered at the beginning of the summer 2017. He also said that Malmström and Canada’s Minister for International Trade Chrystia Freeland will be inviting ministerial colleagues in Davos in January for a breakfast event to continue talking about the initiative. On the time line, the EU source said from the EU side, after the impact assessment, there would be a need for a negotiating authorisation, which could be granted by the end of 2017 or early 2018. Time will be needed to propagate the idea, the source said and it is too early to know when negotiations could start. Project Explained In the fact sheet, the EU explained that the “multilateral investment court could be modelled on the set up of most domestic and international courts and tribunals, which are normally composed of two instances – a first instance and an appeal instance. The first instance level could adjudicate claims brought under investment treaties that interested countries have decided to assign to the authority of the multilateral court. The appeal instance could hear appeals of the decisions of the first instance tribunal.” It also explains that “The multilateral court would need to be a legal entity under international law, but it is too early to say whether it would be a new stand-alone body or be docked into an existing international organisation.” It added: “This perspective is kept open, but would need to take account of the views of the members of the international organisations being considered, their current and projected workload as well as the vocation and other activities of these existing organisations.” About the likely cost of a permanent multilateral investment court, the fact sheet states that “Projected costs would be comparable to those of other international tribunals, such as the International Law of the Sea Tribunal, which costs around USD 10 million per year to run or the WTO Appellate Body costs around USD 7 million to operate per year.” “One possibility could be that the multilateral court is financed through permanent transfers from members, which is how most international organisations such as the World Trade Organisation (WTO) are financed,” it said. A Canadian source said many people during the meeting welcomed the joint initiative. EU Trade Commissioner Cecilia Malmström, in a July blog post making the case for a new court, said, “People around the world are concerned that global economic integration is taking place without sufficient democratic control. One area of particular concern in recent years has been international rules on protecting foreign investments, as well as the system to enforce those rules, known as investor-to-state dispute settlement.” Over the past 40 years, countries negotiated some 3,200 investment agreements, and disputes are brought to specialised arbitral tribunals which are set up on a case-by-case basis, she said. in the blog post. There is “an increasing perception in the public debate in many countries that investment disputes have an impact on public policy, as they can lead to substantial payments of compensation by governments to investors,” she said. “Critics argue that the system lacks legitimacy, accountability and transparency.” Image Credits: Flickr – Tim Green Share this:Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Facebook (Opens in new window)Click to email this to a friend (Opens in new window)Click to print (Opens in new window) Related Catherine Saez may be reached at csaez@ip-watch.ch."Idea Of A Multilateral Investment Court Makes Headway, Proponents Say" by Intellectual Property Watch is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.