In a plenary session debate on Wednesday 29 November, many MEPs supported the idea of the EU launching negotiations on setting up a multilateral investment court (MIC) to resolve disputes, replacing the current system of private arbitration with an impartial and transparent multilateral court and associated appeals mechanism.
At the end of 2016, the European Commission and the Canadian government tabled a proposal for a single standing body to settle investment disputes in free-trade and investment agreements, moving away from the ad hoc investor-state dispute settlement system (ISDS) (see EUROPE 11687 and 11691).
The basis of this proposal is the model advocated by the EU for resolving disputes between investors and states by means of the Investment Court System in its free-trade agreements with Canada, Singapore and Vietnam and in its future trade and/or investment agreements.
On 13 September, the Commission submitted a recommendation to the Council that negotiations be opened on setting up a multilateral investment court (see EUROPE 11862).
On Wednesday, Trade Commissioner Cecilia Malmström said that the MIC would ensure a higher degree of legitimacy, reliability and consistency at global level by employing independent judges on a permanent basis in a two-instance system.
She made clear, however, that the MIC should only be called into action when national judicial remedies have been exhausted. Costs would be shared, but less developed countries might contribute less, she said.
It remains to be seen whether such a multilateral court would stand as a unilateral institution or be docked into another and how affected communities could contribute to court proceedings.
Malmström emphasised that there was strong support from member states for the idea, but that the EU still needs to get solid backing on the international stage.
During the debate, some MEPs, such as Marietje Schaake (ALDE, Netherlands) argued that a court of this sort should be open also to SMEs.
MEPs raise the issues of compliance with UN conventions, the relationship with national courts and the future of bilateral investment treaties concluded by member states and using ISDS.
Anne Marie Mineur (GUE/NGL, Netherlands) expressed the view that the MIC would still favour foreign investors who could seek compensation from states without being open to parties, such as trade unions. She called for investors to be subject to ILO and Paris international climate agreement obligations.
Heidi Hautala (Greens/EFA, Finland), too, called for the MIC to protect not only the rights of investors but also right of states to legislate and the rights of third parties. (Original version in French by Emmanuel Hagry)