Great controversy has arisen in connection with the latest proposal advanced by the European Union during its negotiations with the United States, for approval of the Transatlantic Trade and Investment Partnership Treaty (TTIP). Prompted by lobbying by the European Parliament, a number of member States and certain public opinion, the European Union has introduced several innovative measures to the new proposed version of the Treaty, with regards to investment protection and dispute settlement. In particular, the European Union proposes the creation of a two-tiered permanent court composed of “judges” pre-appointed by the United States and Europe. Such a model, which parts from traditional Investor-State Dispute Settlement proceedings, is an attempt to address the main difficulties and flaws detected in investment arbitration. This article summarises both the positive and negative reviews exposed by the arbitral community in connection with the new system advanced by the European Union. Advantages of the new model include, among others, the express protection of States’ so-called “right to regulate”, a firm commitment regarding the transparency of proceedings and the implementation of a strict ethical code for arbitrators in order to prevent conflicts of interest. On the contrary, the main concerns noted against such a system refer to the distortion of the dispute settlement arbitration mechanisms which may reduce the protection of foreign investments, complicate the enforcement of the courts’ resolutions in third-countries to the Treaty and increase the risk of inconsistencies between courts’ first and second instances, amongst others.
Iurgium [previously Spain Arbitration Review]