Forthcoming Chatham House and Herbert Smith Freehills Symposium: “TTIP: shaping the future for investor-state dispute settlement” – 4 March 2015

The proposed Transatlantic Trade and Investment Partnership (TTIP) between the EU and the US, two of the world’s largest economies, is intended to remove trade barriers, create wealth and promote investment.  On 13 January, the European Commission published the results of its public consultation on investment protection and investor-state dispute settlement (ISDS) in  TTIP.  Of the 150,000 responses, 97 per cent were negative.  Critics have stated that the ISDS proposals would allow corporates to undermine regulation by governments in fields such as environmental protection.  A further consultation is promised.

But why has ISDS in TTIP aroused such opposition?  Can it be improved to strike a balance between investment protection and the right of governments to regulate?  And, if TTIP is a blueprint for future free trade agreements (FTAs), what lies in store for this form of dispute resolution?

Chatham House in partnership with Herbert Smith Freehills are holding a symposium to bring together voices from across a broad range of stakeholders.

Participants:

Sapfo Constantatos, Senior Group Legal Counsel, Dispute Resolution in the General Counsel’s Office, Standard Chartered Bank
Andrew Coop, Senior Legal Adviser, EU and International Trade, Department for Business, Innovation and Skills
Lorenzo Cotula, Principal Researcher, Law and Sustainable Development, International Institute for Environment and Development
Andrea Shemberg, Lead, Investment and Human Rights Project, London School of Economics; Legal Adviser to UN Secretary-General’s Special Representative for Business and Human Rights (2007-11)
Christian Leathley, Partner, International Arbitration and Public International Law, Herbert Smith Freehills LLP, London

Chair:
Andrew Cannon, Partner, International Arbitration and Public International Law, Herbert Smith Freehills LLP, London

For further information, please click here.

Christian Leathley
Christian Leathley
Partner
+44 20 7466 2532
Andrew Cannon
Andrew Cannon
Partner
+33 1 53 57 65 52

Investment protection and ISDS in the TTIP: the discussion continues with more consultation around the corner

Yesterday afternoon, the EU Commission issued its Report on the outcome of the public consultation on the inclusion of investment protection and investor-state-dispute-settlement (ISDS) in the Transatlantic Trade and Investment Partnership (TTIP) being negotiated between the EU and the US. As discussed in our blog post here, the public consultation was launched against the backdrop of vociferous debate about the nature of ISDS and investment protection more generally and in relation to the TTIP. The controversy surrounding investment protection and ISDS in connection with the TTIP is described in our recent podcast.

It is no surprise that the Report reveals strong opposition to, and concerns about, ISDS in the TTIP. It is also no surprise that the discussion as to both the content of the investment protections (including any “right to regulate”, as it is known), and the nature of the mechanism by which these can be enforced, will continue. In its Report, in response to the criticisms of inclusion of ISDS in the TTIP, the Commission refers back to the fact that the consultation takes place in specific circumstances in which the Council (and therefore, to all intents and purposes, each Member State) has unanimously entrusted the Commission to negotiate high standards of investment protection and ISDS within the TTIP, providing the final outcome corresponds to EU interests.   Further, whilst the negotiating directives include an element of conditionality and make clear that a decision on whether or not to include ISDS is to be taken during the final phase of negotiations, it cannot be ignored that the US position is also that investment protection and ISDS should feature in the TTIP.

Whilst the consultation received an extremely high proportion of pre-populated responses organised by NGOs (which generally opposed the inclusion of ISDS), it also solicited responses from a broad cross-section of stakeholders which has allowed the Commission to identify a number of key points areas (or “core issues”) to develop. These are:

  • The protection of the right to regulate
  • The supervision and functioning of arbitral tribunals
  • The relationship between ISDS arbitration and domestic remedies
  • Review of ISDS decisions for legal correctness through an appellate mechanism

The Commission has committed to further consultation in the first quarter of 2015.  However, at this stage it is not clear how the next consultation on these “core issues” will put the Commission in a better position to develop the investment chapter. For example, the “right to regulate” is the flip-side of the guarantee to an investor of fair and equitable treatment. Any re-consideration of the right to regulate will be deficient if it does not take into account the positive rights of investors which impact on the state’s right, as well as the sectors in which such right should exist without limitation. Again, the relationship between ISDS arbitration and domestic remedies depends on the balance struck between investment protections and the rights of states.  A holistic approach is needed.

The Commission’s Report on the responses to the Consultation is found here, and the accompanying Commission Memo is found here. Aspects of the Report are considered in further detail below. You may also wish to hear Herbert Smith Freehills public international law partner Matthew Weiniger QC discussing these issues on the Today programme on Radio 4 on 14 January 2014 (at 18.55 mins into the broadcast).

For further information, please contact Matthew Weiniger QC, partner, Christian Leathley, partner, or Andrew Cannon, partner, or your usual Herbert Smith Freehills contact.

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Podcast – “The TTIP: Cutting through the hype surrounding investment protection and ISDS”

The Transatlantic Trade and Investment Partnership or “TTIP” has been making headlines across the EU and the US over the past months. Petitions against this free trade agreement have been signed by hundreds of thousands and protest actions have taken place across the Member States. In this short podcast, recently posted on our Public International Law Notes blog, partners Christian Leathley and Andrew Cannon look behind the headlines to consider some of the key issues being debated in relation to investment protection and ISDS and the implications of the outcome for investors investing from one market into the other.

For regular updates on investor-state-dispute-resolution and other public international law issues, please subscribe to our Public International Law Notes blog. Continue reading

The future of investor-state arbitration

We live in interesting times for investment arbitration. There is wider public engagement with investment protection than there has ever been, prompted by the European Commission’s public consultation on the proposed Transatlantic Trade and Investment Partnership (TTIP) between the EU and the US, and the agreement in principle of the text of the Comprehensive Economic Trade Agreement (CETA) between the EU and Canada.

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