The European Commission started its new approach in 2014, when it released the first draft version of the Comprehensive Economic and Trade Agreement (CETA) between the EU and Canada. This new approach already addressed the main issues encountered in the literature and by civil society organisations. The European Commission for instance introduced a deepened version of transparency, by including the 2014 UNCITRAL Transparency Rules. This will lead to the disclosure of information and documents as a default norm. The only exception will be where confidentially issues arise, which classification will be a decision of the Members of the Tribunal. In 2016, the Contracting Parties published the version of CETA which has been signed and is now subjected to ratification. This version shows the new approach undertaken by the European Commission and introduces, for instance, the revolutionary Appellate Tribunal. The ISDS has thereby been transformed into an Investment Court System (ICS), which resembles and shows features of a ‘regular’ court.

Another feature in the original CETA is the incorporation of the State’s right to regulate in the Preamble, which inclusion seems to show that CETA adheres to the latest generation of investment agreements. What the thesis further shows is that the signed CETA goes even further by the inclusion of a right to regulate as a substantive norm. It is necessary though that this will not go beyond what is strictly required to protect the interests of the public at large, as a substantive provision may tempt the Members of the Tribunal to act more and more in the interest of the State (maybe equally unjustly).

A revolutionary change in both versions of CETA is that the appointment of Tribunal Members has been taken away from both disputing parties. Namely, CETA introduces randomness as the determination for appointment. The Contracting Parties will be allowed though to appoint Members for the roster, from which Tribunal Members are to be chosen. Nevertheless, the thesis shows that reciprocity in the disputing parties’ interests will probably increase the likelihood of addressing the imbalance between both parties.

An interpretative tool has been introduced in both versions as well, thereby mirroring NAFTA. It will provide the Contracting Parties with a legislative tool to intervene in the case law. Such an instrument will remedy the alleged loss of State power in investment agreements by granting an overriding competence.

The most novel feature of the new system is that the ICS will introduce an appellate regime, in which more consistent and accurate case law is to be expected. The thesis has shown that although this introduction may lead to an increase in time and costs, efficiency should never be a reason to exclude an extra review open to both disputing parties.

The questions this thesis deals with touch upon the main arguments made in favour and against the older and latest system of dispute resolution, but it is now up to CETA to show in practice whether it is capable of convincing the remaining doubters on the system of dispute resolution.
 

 Written by Mike van de Klundert 
 Published on Law Blogs Maastricht