Investor-State Dispute Settlement (ISDS): Reform proposals and their associated hidden risks
Palmer Prince Dagadu
The proliferation of ISDS in International Investment Agreements (IIAs) shows how appurtenant the ISDS mechanism has become. However, with the increasing number of ISDS cases, the debates about the cons of the mechanism is also gaining recognition especially in countries where ISDS is on the agenda of IIA negotiations. The issue of ISDS reform is so crucial that it should be done in a well-informed manner and take into account the interests of all stakeholders in a well-balanced approach. Despite the ongoing consensus about the necessity to reform the current ISDS mechanism, the scope, procedures, and modalities for the reform remain contested because the reform proposals by some countries and international organizations comes with certain hidden risks which may end up further fragmenting the international investment system. This article sets out some possible reform proposals and probes into the hidden risks that are associated with them. It further suggests that in order to strike a progressive balance between the interests of the disputing parties; the investors and the states, the ISDS reform proposals should be developed and implemented in a concerted effort by employing a multilateral framework which will integrate the ISDS mechanism and domestic court proceedings.