More than a decade ago, I had blogged about developing countries, dispute settlement at the WTO and the role of the Advisory Center for WTO Law.
The principle of a Center to assist developing countries and least developed countries in dispute settlement in international trade has now moved to international investment. Unlike WTO law, the international investment dispute ecosystem does not have such a centre to assist countries not having capacity. Reliance on international arbitration law firms or local teams was the solution thus far.
The UNCITRAL Working Group III which is working on issues of reforming the investor state dispute settlement process (ISDS) has come out with a draft statute to establish an Advisory Centre for International Investment Dispute Resolution. It aims to provide training, support and assistance with respect to international investment disputes.
The rise of ISDS cases against developing countries has been a matter of concern and dealing with State capacity is one of the issues. The Centre is aimed to meet that deficit. A useful guide on the state of play in investment disputes is brought out by UNCTAD here. The complexity of investment treaties (both old and new) is shown beautifully in this diagram from the UNCTAD report.
However, the larger debate around ISDS still persists - with new model BITS, exclusion of ISDS chapters in regional trade agreements as well as finding innovative ways in substantive provisions (including expanding the scope of the right to regulate, strengthening domestic exhaustion of local remedies) of lessening their impact. One of the interesting points in the note attached to the draft statute is whether the Centre should be part of the larger organisational structure of the UN or should be independent like the ACWL.
Time will tell whether such a Centre will serve the purpose of addressing the capacity deficit of many countries in dealing with international claims on State actions.
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