On 11 October, the European Commission put before the Council four proposals that could be implemented to deliver the EU’s commitment to develop specific rules that would turn the Investment Court System (ICS) provisions in the EU Canada Comprehensive Economic and Trade Agreement (CETA) into a reality.
Whilst the basis of the ICS are already set out in CETA, ICS can only be implemented once all the EU Member States have ratified the treaty. However, the Joint Interpretative Instrument on CETA agreed by the EU and Canada in October 2016 includes a commitment to apply the system as soon as the agreement is ratified.
The four proposals ask the Council to make decisions on the adoption of the following:
- a decision setting out the administrative and organisation matters regarding the functioning of an Appellate Tribunal;
- a code of conduct for Members of the Tribunal, the Appellate Tribunal and mediators, as members of the ICS;
- rules for mediation for use by disputing parties in investment disputes; and
- a position by the Council on behalf of the EU in the CETA Joint Committee, as regards the adoption of binding interpretations by the CETA Joint Committee of the investment provisions of CETA.
These recent developments in setting out the practical framework for the ICS envisaged under CETA are important as they represent the new EU approach to investment disputes. As the EU has taken to same approach in the agreements it has negotiated with Singapore, Vietnam and Mexico, these proposals are of particular interest as they demonstrate how the ICS can be made a reality.
It is worth remembering that the Commission has an active role in Working Group III of the United Nations Commission on International Trade and alongside its Member States the EU has submitted a concept paper setting out how a multilateral investment court could be established.