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25 Austl. Int'l L.J. 49 (2018)
Investor-State Dispute Settlement Challenges and Reforms

handle is hein.journals/austintlj25 and id is 55 raw text is: 






       This article will discuss the issues that have emerged over time in the field of investor-
       State dispute settlement (ISDS) as the field has matured, and the efforts being made
       by different stakeholders to reform the current system. The first part will give a brief
       background to the ISDS system. The second part will discuss the criticisms of the system
       that have emerged and the challenges of reforming the system given its structural aspects.
       The third part will outline the reform efforts currently underway, including the reform
       mandate of UNCITRAL Working Group III. The fourth part   will look to the future,
       reflecting on some dynamics that have emerged during the UNCITRAL negotiations.


A.    Hybrid  nature  of investment arbitration
Foreign  direct investment law  is largely based on a network  of more  than  3,000 known
bilateral and multilateral investment treaties (and other agreements with investment chapters)
that incorporate a core set of protection standards for foreign investors, coupled with a strong
enforcement   regime that allows an investor to have direct recourse against a host State in
international arbitration.'
    Investment  arbitration has been  called a hybrid system       of sui generis character.2 This
characterisation reflects the largely public international law  character of the  source of
obligations, the Bilateral Investment  Treaties, (BITs), on the one  hand,  coupled  with a
procedural  enforcement  mechanism   with rules based largely on the model  of international
commercial  arbitration, on the other. As Anthea Roberts has poignantly observed, 'Investment
treaties ... lie at the fault line of many problematic dichotomies, such as public and private
law and  international and domestic law. ... States and private parties simultaneously hav[e] a
vertical substantive relationship (between governor and governed) and a horizontal procedural
one  [in the event of a dispute] (between equal disputing parties).'

    Associate, Norton Rose Fulbright. Any views expressed in this article are solely the views of its author and should not
    be attributed as representing the views of Norton Rose Fulbright Australia. The author attended the 34 h, 35h and
    36,h sessions of UNCITRAL Working Group III.
    UNCTAD   reports that 'The cumulative number of all signed IIAs [international investment agreements], inde-
    pendently of whether they have entered into force, is 3,322', see United Nations Conference on Trade and Develop-
    ment (UNCTAD), 'World Investment Report 2018 - Investment and New Industrial Policies', 89.
2   See Zachary Douglas, 'The Hybrid Foundations of Investment Treaty Arbitration' (2004) 74 British Yearbook of
    International Law 151.
    Anthea Roberts, 'Clash of Paradigms: Actors and Analogies Shaping the Investment Treaty System' (2013) 107

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