This piece examines recent trends in the use of third-party funding (TPF) in treaty-based ISDS and the implications of TPF for investor conduct, developments in investment law and host state conduct. TPF has been raised in two multilateral processes currently underway: the talks to amend ICSID arbitration rules and to consider multilateral reform of ISDS at UNCITRAL. Given the narrow nature of the TPF discussions in ICSID, the authors make the case for policy-makers to consider full or partial bans of TPF at UNCITRAL.
Delegates involved in the UNCITRAL Working Group III process on multilateral ISDS reform have until July 15, 2019 to submit to the UNCITRAL Secretariat their reform proposals and the timing for when such items may be considered in an overarching project schedule. That schedule would help guide the working group under Phase 3 of its mandate, which is devoted to crafting solutions to ISDS-related concerns.
The April 2019 deliberations on multilateral ISDS reform at UNCITRAL Working Group III were due to tackle a series of questions that emerged in Phase 2 of the process. This piece breaks down why the scope of these discussions should be expanded to include important concerns raised by developing countries, and describes three core issues that must not be ignored. These involve the right to participation by affected parties; the rule of law and domestic courts’ jurisdiction; and the chilling of sovereign states’ authority and responsibility to govern.
Delegates had a new round of deliberations for multilateral reform of ISDS at UNCITRAL from April 1 to 5. The meeting of Working Group III, which is tasked with this process, was held in New York.
UNCITRAL conferred a broad mandate on Working Group III to consider possible reform of ISDS. In Phase 1 governments identified and considered concerns about ISDS. Phase 2, where they consider whether reform is desirable in light of those concerns, is well advanced. The next meeting in New York in April 2019 is expected to conclude this phase and decide how to pursue the final phase, in which governments will develop any relevant solutions to recommend to the Commission. This note addresses three issues at the heart of the legitimacy crisis confronting the international investment regime that should inform the remainder of Phase 2.
Multilateral ISDS Reform Is Desirable: What happened at the UNCITRAL meeting in Vienna and how to prepare for April 2019 in New York
UNCITRAL Working Group III has decided that multilateral reform is desirable to address various concerns regarding ISDS. Its next session will identify other concerns that may have been missed and prepare a work plan to develop solutions. This article reviews the UNCITRAL process so far and helps governments prepare for the upcoming session.
UNCITRAL Working Group III decides that multilateral reform of ISDS desirable; governments to submit proposals to develop work plan for reform
UNCITRAL Working Group III continued discussions on possible reform of investor–state dispute settlement (ISDS) at its 36th session, held October 28–November 2, 2018 in Vienna.
Third-party litigation funding (TPF) is a rapidly expanding industry composed of speculative investors who invest in a legal claim for control of the case and a contingency in the recovery. In the wake of the global financial crisis and the demand by speculative finance for new investment vehicles, TPF has discovered the regime of bilateral investment treaties (BITs) with investor–state dispute settlement (ISDS) mechanisms.
Working Group III of the United Nations Commission on International Trade Law (UNCITRAL) continued discussions on possible reform of investor–state dispute settlement (ISDS) at its 35th session, held April 23–27, 2018 in New York.
International Council for Commercial Arbitration (ICCA)–Queen Mary Task Force Report on Third-Party Funding in International Arbitration
The ICCA-Queen Mary Third Party Funding Taskforce, comprised of representatives drawn from among all relevant stakeholders and interested members of ICCA
During the week of November 27–December 1, 2017, Working Group III of the United Nations Commission on International Trade Law (UNCITRAL) held its first meeting on possible reform of investor–state dispute settlement (ISDS).
The International Council for Commercial Arbitration (ICCA)–Queen Mary Task Force on Third-Party Funding in International Arbitration opened its draft report for public comment.
SIAC Investment Arbitration Rules come into effect; new SCC rules include appendix on investment treaty disputes
On January 1, 2017, the Investment Arbitration Rules of the Singapore Investment Arbitration Centre (SIAC) came into effect. Among the highlights are provisions on early dismissal of claims and defences, submissions by non-disputing parties and mandatory disclosure of third-party funding arrangements. The tribunal may consider such arrangements when apportioning costs. The 2017 Arbitration Rules of the Stockholm Chamber […]
On February 1, 2016, the Singapore International Arbitration Centre (SIAC) released draft rules tailored to investment arbitration (Draft SIAC Rules), to be finalized in May following public consultation.
Claim against Venezuela dismissed; State acted legitimately in response to contractual violations Vannessa Ventures Ltd. v. Bolivarian Republic of Venezuela, ICSID Case No. ARB(AF)04/6 Damon Vis-Dunbar A claim by Vannessa Ventures against Venezuela has been rejected on its merits, with the tribunal concluding in January 16, 2013 decision that Venezuela had responded properly to contractual […]