The future of ISDS is at a historic crossroads. In this final chapter we provide an overview of the ISDS reform process in the UNCITRAL and discuss the EU proposal for a Multilateral Investment Court in the context of this reform. First, we contextualise the current ISDS reform against earlier attempts to negotiate multilateral international investment agreements to explain how the current reform is different. Second, we discuss the scope of the reform and its process in the framework of UNCITRAL, particularly focusing on the identified ISDS concerns. Third, we outline the reform options that have emerged in the discussion and explain their correlation to the EU’s MIC proposal. In the final part of this chapter, we consider the potential contributions that an MIC could make to the rule of law and the legitimacy of international investment law. While the negotiations are set to conclude in 2025, the aim of this chapter is to place the EU’s proposal in the broader ISDS reform context and reflect on its external challenges in this reform process.

The Investment Court System is the core feature of the EU international investment policy. In its Opinion 1/17 the CJEU confirmed the legality of the new ICS in CETA under EU law, providing important legal and policy implications for the future co-existence of EU law and international investment law. This chapter offers a critical assessment of the ICS, examined through the CJEU’s reasoning in Opinion 1/17. First, we discuss the nature of the ICS in relation to the EU judicial system. Second, we consider the effects of the ICS on the autonomy of the CJEU and the interpretation of EU law. Finally, we focus on the main features of the ICS in light of the rule-of-law criteria, as the core EU value. Where relevant, the CJEU’s Opinion is supplemented by remarks of late Advocate General Bot, which uncover a number of relevant political considerations. The design and functioning of the ICS thus provide important insights into the EU’s understanding of the rule of law in international investment law, which is ultimately envisaged to be implemented through a Multilateral Investment Court.

The influence of the EU and EU law on investment arbitration is one of the hotly debated topics in today’s arbitration world. Since the EU obtained the competence for the regulation of foreign (direct) investment on behalf of its Member States through the 2009 Lisbon Treaty, the European Commission’s efforts have brought about much change for both the EU’s internal and the EU’s external investment law relations. On the EU-internal level, the Commission – since 2018 backed by the European Court of Justice’s Achmea judgment and since early 2019 also by the EU Member States – has worked towards the elimination of investment arbitration. It seeks to have these disputes litigated before EU Member State courts instead. On the EU-external level, the Commission has successfully negotiated a new dispute settlement model in the EU’s free trade and investment agreements: an investment court system, the compatibility of which with EU law the Luxembourg court confirmed in 2019. This chapter seeks to set out these developments in a structured manner. It is necessarily incomplete, since the interaction between the Commission, investment tribunals, courts and other actors continues to develop – despite the fact that this interaction to a considerable degree remains determined by mutual ignorance.