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Dispute settlement | Brussels, 21 december 2016 - Latest update on 20 October 2017

The Multilateral Investment Court project

Since 2015 the European Commission has been working to establish a Multilateral Investment Court.

What would a Multilateral Investment Court do?

The overall objective for creating a Multilateral Investment Court is to set up a permanent body to decide investment disputes. It would build on the EU's groundbreaking approach on its bilateral FTAs and be a major departure from the system of investor-to-State dispute settlement (ISDS) based on ad hoc commercial arbitration.

A Multilateral Investment Court, like the approach in the FTAs, would bring the key features of domestic and international courts to investment adjudication.

The idea is that the Multilateral Investment Court would:

  • have a first instance tribunal
  • have an appeal tribunal
  • have tenured, highly qualified judges, obliged to adhere to the strictest ethical standards and a dedicated secretariat.
  • be a permanent body
  • work transparently
  • rule on disputes arising under future and existing investment treaties
  • only apply where an investment treaty already explicitly allows an investor to bring a dispute against a State
  • would not create new possibilities for an investor to bring a dispute against a state
  • prevent disputing parties from choosing which judges ruled on their case
  • provide for effective enforcement of its decisions
  • be open to all interested countries to join.

For the EU, the Multilateral Investment Court would replace the bilateral investment court systems included in EU trade and investment agreements.

Both the EU-Canada Comprehensive Economic Trade Agreement (CETA) and the EU-Vietnam Free Trade Agreement foresee setting up a permanent multilateral mechanism and contain a reference to it.

The EU now includes similar provisions in all of its negotiations involving investment.

Why do we need a Multilateral Investment Court?

The EU is the world’s largest exporter and importer of foreign direct investment. Investment, both inward and outward, brings jobs and economic growth. That’s why encouraging and retaining investments is vital for ensuring economic growth and jobs in the EU.

International investment rules and international investment dispute settlement have a role to play in encouraging and retaining investment. So it’s in the EU’s interest to ensure that the resolution of investment disputes operates effectively on an international level.

The EU is pursuing a modern and reformed approach to investment dispute resolution. However, most of the more than 3200 existing investment agreements – including the over 1400 agreements concluded by EU Member States – don’t contain the innovations and improvements the EU has developed in its recent investment negotiations. The Multilateral Investment Court would have the potential to replace the dispute settlement provisions included in those older agreements.

Where are we on EU level?

The Commission's objectives for the Multilateral Investment Court are based on the approach developed in the EU's bilateral free trade agreements and agreed by the other EU Institutions and all EU Member States.

In the European Commission’s 2014 public consultation on investment protection, some stakeholders already proposed reforming investment dispute resolution multilaterally as a more effective way to reform the ISDS system than bilateral reforms.

In its Concept Paper of 5 May 2015 on ‘Investment in TTIP – the path beyond’, the Commission also indicated that work should start on setting up a multilateral system for resolving international investment disputes. This work would be carried out in parallel to the reform process undertaken in bilateral EU negotiations.

The European Parliament, too, has supported the proposal to work towards a multilateral solution (such as in its resolution of 8 July 2015 containing the European Parliament’s recommendations to the European Commission on the negotiations for the TTIP).

The Commission’s Trade for All communication of 2015 also sets the objective to engage with partners to build consensus for a fully-fledged, permanent Multilateral Investment Court so as to develop a coherent, unified and effective policy on investment dispute resolution.

On 1 August 2016, the EU launched an impact assessment process on options for a multilateral reform of the investment dispute settlement system, including the possible establishment of a multilateral investment court.

News and developments

Many countries are currently engaged in internal reflections on their policies on investment protection and investment dispute settlement. The Commission is engaging with them on an exploratory basis.


Relevant documents

  • 9 October 2017: Commission hosts the side event "Multilateral reform of ISDS: Possible paths forward" in the margins of UNCTAD's Annual High-level IIA Conference (information and Commission's presentation) and watch the video recording of the event.
  • 13 September 2017: Commission released a Recommendation which once adopted by the Council would permit the EU to take part in negotiations for a new multilateral investment court. It also released an Impact Assessment (Summary) and Regulatory Scrutiny Board study.
  • 10 July 2017: the United Nations Commission on International Trade Law (UNCITRAL) agreed to work on the possible reform of investor-State dispute settlement (ISDS). Read the UNCITRAL press release and listen to the audio recordings of the EU interventions in the morning and afternoon sessions.
  • 20 January 2017: EU Trade Commissioner Malmström and Canadian Minister of International Trade Freeland co-host an informal ministerial meeting at the World Economic Forum in Davos, Switzerland. Read the co-sponsored discussion paper and the Commissioner's blog post.
  • 13-14 December 2016: The European Commission and the Government of Canada co-host an inter-governmental expert meeting of investment policy makers from over 40 countries in Geneva, Switzerland. Read the co-sponsored discussion paper.
  • 28 October 2016: The EU and Canada agree in a Joint Interpretative Instrument to CETA to "work expeditiously towards the creation of the Multilateral Investment Court" and the Council states its support for the Commission's work on the establishment of the Multilateral Investment Court.
  • 17 October 2016: The European Commission and the Government of Canada co-chair technical exchanges at the OECD-hosted Investment Treaty Dialogue in Paris, France. Read the co-sponsored discussion paper.
  • 17-21 July 2016: The European Commission and the Government of Canada co-chair a dedicated session in the margins of UNCTAD’s World Investment Forum in Nairobi, Kenya. Read the co-sponsored discussion paper.
  • February 2016: Both the Comprehensive Economic and Trade Agreement with Canada (CETA) and the EU-Vietnam Free Trade Agreement (EUVFTA) include provisions anticipating the transition from the bilateral Investment Court System (ICS) included in the agreements to a permanent Multilateral Investment Court. To ensure policy coherence at EU level, similar transitional provisions are proposed in the context of all other on-going or future bilateral EU trade and/or investment negotiations.
  • 14 October 2015: The “Trade for all” Communication sets out that the Commission would – in parallel with its bilateral efforts – “engage with partners to build consensus for a fully-fledged, permanent International Investment Court”.
  • 5 May 2015: The Concept Paper “Investment in TTIP and beyond – the path for reform” specified that work should start towards the establishment of a multilateral system for the resolution of investment disputes.
  • 27 March 2014 – 13 July 2014: The idea of establishing a multilateral investment dispute settlement system is put forward by a number of stakeholders in the public consultation conducted at EU level in 2014, in the context of the development of the EU's policy on investment protection and investment dispute settlement in the Transatlantic Trade and Investment Partnership (TTIP) agreement. The results of the 2014 public consultation are summarised in a report.


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