ISDS Reform – A World Investment Court

The international investment law regime governed by numerous multilateral and bilateral agreements is fragmented; the single connecting thread is the Investor-state Dispute Settlement (ISDS) mechanism which resolves disputes between Investors and State. While the current mechanism has served the investment regime adequately the growing investments and subsequent disputes have brought to light criticism which is boiling into an ISDS crisis. The paper studies these criticisms which range from allegations on functioning of tribunals, breach of sovereignty to imbalance of power between disputing parties. Combating these criticisms some States have opted for an alternate dispute resolution mechanism by establishing Bilateral Investment Courts (BIC), frontrunner being European Union (EU) which has embedded BIC in Transatlantic Trade and Investment Partnership (TTIP), Canada-EU Comprehensive Trade and Economic Agreement (CETA) and the EU-Vietnam BIT, 2015. The paper reviews the provision of these agreements as blue prints for establishment of World Investment Court (WIC), the efforts for which has been undertaken by UNCITRAL Working Group III under the de facto leadership of EU. The paper further analyses whether establishment of a WIC would eventually lead to establishment of a World Investment Organization, unifying the international investment regime under an umbrella institution.