EU trade deals and the death of Investor-to-State Dispute Settlement

Aidan Robertson QC

The EU is about to sign a free trade agreement with Japan and it has released, in the last few days, a short FAQ document. Usually such agreements included investor-state dispute resolution mechanisms such as UNCITRAL, ICSID, and so on. The EU’s policy on this is made clear on page 6 of the recent FAQ: http://trade.ec.europa.eu/doclib/docs/2017/july/tradoc_155684.PDF

“A new system – called the Investment Court System, with judges appointed by the two parties to the FTA and public oversight – is the EU’s agreed approach that it is pursuing from now on in its trade agreements. This is also the case with Japan. Anything less ambitious, including coming back to the old Investor-to-State Dispute Settlement, is not acceptable. For the EU ISDS is dead.”

Thus, even if the UK secures a trade deal with the EU, disputes will not (on the EU’s approach) go to UNCITRAL or ICSID or anywhere else but the Investment Court System that is outlined in the FAQ.