MIC’s Institutional Lessons from the DSM’s Collapse and the Equilibrium Between Investor Protection and State Sovereignty

The JFIEL Conference

Introduction

The Multilateral Investment Court (“MIC”) is proposed as a forum to adjudicate disputes between states and investors, consisting of a set of permanent judges elected by states. This adjudicatory system would replace Investor-State Dispute Settlement (“ISDS”), which uses arbitration as a mode of resolving such disputes. Proposals for the MIC have received significant hostility from international investors and scholars on investment law, with both quarters unanimous on its sole purpose as undermining arbitration as an integral component of the ISDS framework. Some have even argued that the move can be characterised as an attempt by losers to cartelise, for “transnational corporations always win investment arbitrations”. They consider MIC proposals to constitute bare exertions of state sovereignty, a collective act by ISDS losers to consolidate and target transnational corporations. Alongside such vociferous critiques of the MIC, states are proactively undermining investor rights by either prohibiting access to international fora altogether…

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