____________________________________________________________________________ An Advisory Centre on International Investment Law: Key Features Karl P. Sauvant Academic Forum on ISDS Concept Paper 2019/14 Version 2: 10 September 2019 Citation: Karl P. Sauvant, ‘An Advisory Centre on International Investment Law: Key Features’, Academic Forum on ISDS Concept Paper 2019/14, 10 September 2019. Academic Forum on ISDS Website: www.jus.uio.no/pluricourts/english/projects/leginvest/academic-forum/ Disclaimer: This work represents the views of the individual authors and not necessarily those of the Academic Forum on ISDS and its members. The Academic Forum on ISDS does not take positions on substantive matters. The paper has been distributed within the Forum for comment.
An Advisory Centre on International Investment Law:
Key Features
Karl P. Sauvant
Academic Forum on ISDS Concept Paper 2019/14
Version 2: 10 September 2019
Citation: Karl P. Sauvant, ‘An Advisory Centre on International Investment Law: Key Features’, Academic Forum on ISDS Concept Paper 2019/14, 10 September 2019.
Academic Forum on ISDS Website: www.jus.uio.no/pluricourts/english/projects/leginvest/academic-forum/
Disclaimer: This work represents the views of the individual authors and not necessarily those of the Academic Forum on ISDS and its members. The Academic Forum on ISDS does not take positions on substantive matters. The paper has been distributed within the Forum for comment.
AbstractTheUnitedNations Commission on International Trade Law (UNCITRAL) has putthe idea of an Advisory Centre on International Investment Law (ACIIL) on itsagenda. The Centre is meant to help under-resourced developing countries ininternationalinvestmentdisputes.Thispaperbeginswithabriefreviewoftheriseof such disputes and their costs, and outlines the principal characteristics of theAdvisoryCentreonWTOLaw, as aprecedent for anACIIL. It then focuseson thepossible key features of an ACIIL, namely the potential beneficiaries, the possiblerangeofservicesitcouldprovide,itsgovernance,anditsfinancing.Thepaperendswith a proposal for the way forward.∗ Karl P. Sauvant ([email protected]) is Resident Senior Fellow at the Columbia Center onSustainable Investment,a jointCenterofColumbiaLawSchooland theEarth InstituteatColumbiaUniversity. I am grateful to Nicolas Angelet, Meg Kinnear, Niall Meagher, Luke Nottage, FedericoOrtino, JanYvesRemy,GätanVerhoosel,DamonVis-Dunbar,KanawanWaitayagitgumjon, andLouWells for their helpful comments on an earlier draft of this paper, and Evan Gabor and YardenneKaganforexcellentresearchassistance.
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Introduction: the importance of an adequate dispute-settlement process fortheinternationalinvestmentregime
The international investment law and policy regime is one of the strongestinternational regimes in existence. It derives its strength from the facts thatinternationalinvestorscandirectlybringclaimsagainstallegedlyoffendingStatesifthey consider that their rights have been violated and that this investor-Statedispute-settlement(ISDS)regime—arbitrationbyadhoctribunals—settlesdisputesin a manner that can be (and typically are) enforced. This dispute-settlementmechanismisat theheartof the international investmentregimeandthereforeofgreatrelevanceforbothStatesandinvestors.Yet, thisdispute-settlementmechanismhas comeunder considerable criticism, asrecognizedinUNCITRAL’sWorkingGroupIIIon“Investor-StateDisputeSettlementReform”.1Many of these criticisms are reflected in theWorking Group’s reports2(and,hencedonotneedtoberepeatedhere).TheyareatthebasisoftheWorkingGroup’seffortstoimprovetheregime’sdispute-settlementmechanism.Improvementisallthemoreimportantasthenumberofinvestor-Statedisputesisrising,3and there is considerablepotential formoredisputes.By the endof2018,942knowntreaty-basedISDScaseshadbeenreported, involving117countriesasrespondents.4Sometwo-thirdsofthecaseshaddevelopingcountriesoreconomiesintransitionasrespondents,5andthegreatmajorityaroseonlysincetheyear2000.Moreover,ISDSproceedingscanalsobeinitiatedonthebasisofstatecontracts,aswellasinvestmentlawsadoptedbynationallegislatures,underdispute-settlementprovisions contained in them. Contract-based ISDS cases numbered 127 in ICSIDalone by the end of 2018,6and those based on investment laws of host countriesnumbered687—virtuallyalloftheminvolvingdevelopingcountriesoreconomiesintransition.Thisbroughttheoverall totalof ISDScaseseasilytowellover1,100bytheendof2018.8Inaddition,theaveragenumberofdisputeshasbeengrowingovertheyears.Newlyinitiated treaty-based investment arbitrations averaged 8 per year during 1996-1998,rosemorethanfourfoldto36peryearduring2006-2008anddoubledfurtherto 74 per year during 2016-2018.9During the same time periods, the annualnumber of new contract-based cases at ICSID alone averaged 3, 6 and 6,respectively.10It is quite likely that the number of disputes will grow further, as internationalinvestors discover and have recourse to the ISDSmechanism, facilitated perhaps(amongotherthings),bythird-partyfunders.11Infact, thepotential fordisputesisconsiderable,considering(1)thegrowthofinwardFDI(withitsstockamounting,atthe end of 2018, to US$32 trillion12); (2) the number of international investorscontrollingassetsabroad(whichissubstantiallyover100,000),thenumberoftheirforeign affiliates (which is substantially over one million) and the number of
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investors13insuchaffiliates(allofwhich,dependingontheapplicableinternationalinvestment agreement (IIA),mayhave a right to initiate arbitrationproceedings);(3) the number of State contracts and national investment laws grantinginternationaldispute-settlementrecourse;and(4)theembeddednessofFDIinhostcountries, involving, as it does, a wide range of interactions relating to theproduction process over the entire life-cycle of a project and, more broadly, therelationshipbetween foreignaffiliates andhost country governments.Add to that(5)thenumberofIIAs;(6)theirproclivitytowardsbroaddefinitionsof“investors”and “investments”; (7) their open-ended formulation of investor protections,especially in old treaties; (8) the often imprecise drafting of (especially older)treaties, inflexible State contracts, aswell asnational laws thatmaybe in conflictwithinternationalobligations;and(9)thefactthatviolationsofinvestorrightscantake place by different branches of governments and specialized agencies, and atanyadministrativelevel(i.e.,notonlythenationallevel),includingoutofignoranceofexistingobligations,increasinginthismannerthepossibilitiesofactionsthatcangive rise to disagreements. Finally, (10) changing natural resource prices canbecome a source of conflict, in the absence of contract clauses that allow foradjustments in light of changed circumstances, in particular (11) when newgovernmentscometopower.
The potential for conflicts of all kinds between host States and internationalinvestorsisthereforeconsiderable,asarethepotentialliabilities.And,whateverthecause, it isvirtuallyunavoidable that,as ineveryrelationship,disputesarise fromtimetotimebetweenhostStatesandinternationalinvestors.Adispute-settlementregimeisneededtosettlethem,especiallyifinvestorsdonottrustlocalcourts,andgovernments of host States do not want to use—or cannot use—the courts ofinvestors’homecountries.
Moreover, international investment disputes are costly.14According to one study,averagepartycostspercasebetween2013andend-May2017wereUS$7.4millionfor claimants andUS$5.2million for respondents,with an upward trend; averagetribunal costs were US$1.1 million per case.15During the same time period, theaverage amount of damages claimed 16 amounted to US$1.1 billion per case(excluding larger cases, it came to US$196 million), also on an upward trend;however, the average amount awarded17to successful claimantswas considerablyless,US$171millionpercase,againonanupwardtrend.18Asthesenumbersimply,thoughtherearemanycasesinwhichthecostsaremuchlower,thereremainmanyin which the costs are much higher, reaching into the billions of dollars andaccounting for substantial shares of foreign exchange. While different authorsreportdifferentcost figures (andusedifferentmethodologies,e.g., reportmediancosts),19themain features are clear: costs are high and rising. To these financialcosts,onehastoaddthepotentialreputationalcostssufferedbyhostcountriesandthepotentiallossofFDIinflows.20Given thecentralityandpotencyof the regime’sdispute-settlementmechanism, itneeds tobebeyondreproach.This isoneof thereasonswhyStatesarereviewing
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their substantive obligations in IIAs,whymany States are drafting revisedmodeltreaties and why UNCITRAL’s Working Group III is discussing how the dispute-settlement mechanism can be improved. In doing so, it focuses on proceduralimprovements,asreflectedintheWorkingGroup’sreports.21One important aspect, however, is onlybeginning to get attention in theWorkingGroup’s discussions, and it is central to the legitimacy of the regime’s dispute-settlementmechanism: the fact that many developing countries have neither theexperiencedpersonnelnorthefinancialresourcestodefendthemselvesadequatelyininternationalarbitralproceedingsandpreparethemselvesproperlyinthecrucialphase immediatelyaheadofsuchproceedings.This limits,de facto, theirability tohave access to justice on the basis of equality of arms.22It is a regime flaw thatrequires attention not only because of its bearing on the credibility—and hencelegitimacy—oftheinvestmentregime,butalsobecauseoftheoftencostlydispute-settlement process, its outcome in terms of awards, and its potentially negativereputationalimplicationsfortherespondentsasinvestmentlocations.It is therefore laudable that UNCITRAL’s Working Group III—in response to thesuggestion of several member States23—has put the issues of de facto access tojustice and creating a level playing field in regard to international investment-disputesettlementonitsagenda,underthetitle“AdvisoryCentreonInternationalInvestmentLaw”.24The followingdiscussionaddressesanumberof issues relatedtotheestablishmentofsuchaCentre,beginningwithabriefdescriptionofasimilarinstitutioninthetradearea.
A.Theprecedent:theAdvisoryCentreonWTOLaw
Efforts to establishanAdvisoryCentreon International InvestmentLaw (ACIIL)25can learn from the successful approach pursued in another field, namely theinternational trade area, when interested governments created the independentAdvisoryCentreonWTOLaw(ACWL)asanintergovernmentalorganization.
TheACWLwasestablishedin2001.26AsofJuly2019,80countrieswereentitledtoitsservices.27Itsestablishmentreflectedthefactthat,afterthecreationoftheWTOin1995,thenumberandcomplexityofWTOdisputeshadrisenconsiderably.Eventoday,“[w]hilemostdevelopedcountrieshave‘in-house’legalexpertisethatenablethemtounderstandWTOlawandtoparticipatefullyintheWTOlegalsystem,mostdevelopingcountriesandLDCs[leastdevelopedcountries]donot.”28Togetherwithfinancialandinstitutionalconstraints,thissituationmadeitdifficultfordevelopingcountries to use theWTO’s dispute-settlementmechanism effectively. The ACWLwas therefore created “to provide these countries with this legal capacity and tohelpthemtounderstandfullytheirrightsandobligationsunderWTOlaw.”29
Accordingly,theACWLprovidesarangeofimportantservicestoitsbeneficiaries:alldeveloping countries that have become members of the Centre and havecontributedtoitsEndowmentFund.Inaddition,LDCsareautomaticallyentitledto
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the Centre’s services, without having to become ACWL members or having tocontributetoitsEndowmentFund,aslongastheyareWTOmembersorareintheprocess of becoming members.30 (Developed countries are not entitled to theCentre’sservices.)
TheservicesthattheACWLprovidesare(1)givingfreeadvice,intheformoflegalopinions, to governments on all procedural and substantive issues arising underWTOlaw;(2)assistingcountries(formodestfees,butfree-of-chargeforLDCs)inallstagesoftheWTO’sregularpanelandAppellateBodyproceedingsascomplainants,respondents and third parties, beginning with the initial assessment andpreparationofcasesandincludingadvocacyatpanelmeetings(includingansweringquestionsfrompanelsandpartiesatthemeetings),todraftingnoticesofappealandadvocacy during Appellate Body hearings; (3) supporting alternative dispute-settlementproceedings;and(4)holding trainingsonWTOlawandprocedures,aswell as arranging secondments for government lawyers at the Centre.31In 2018alone, theACWLprepared237 legalopinions, assisteddeveloping countries in17disputes (including five new ones), awarded training certificates to 39 delegates,andundertookvariousadhoctrainings.32
Astogovernance,theACWLisindependentfromtheWTO.ItsGeneralAssembly—consisting of representatives of the (in 2019) 47 members of the ACWL (36developingcountries;11developedcountries,plusoneassociatedevelopedcountrymember33)andthe44LDCsentitledtotheCentre’sservices—overseestheCentre’sfunctioning,monitorsitsfinancesandadoptstheannualbudget.34TheManagementBoard—consistingofsixpersonsfromdevelopedanddevelopingcountries,servingintheirpersonalcapacity—decidesonmattersrelatedtotheefficientandeffectiveoperation of theACWL and oversees themanagement of theACWL’s EndowmentFund; it reports to the General Assembly. Finally, an Executive Director and twoDeputyDirectorsmanagetheACWL’sday-to-dayoperations;theExecutiveDirectorisalsoanexofficiomemberoftheManagementBoard.35
The ACWL is financed from the revenues of an Endowment Fund establishedthrough contributions from developed and developing country members; feesgenerated by supporting dispute-settlement proceedings; and voluntarycontributions from members.36More specifically, the one-time contributions ofnewlyaccedingdevelopingcountriesaredeterminedonthebasisof theirshareofworld trade and per capita income, classified in three membership categories:Category A: CHF486,000; Category B: CHF162,000; and Category C: CHF81,000.37There is no fixed membership amount for developed countries; a financialcontribution is agreedwith theACWL’sGeneralAssemblyupon ratificationof theACWL Agreement. Developed countries also contribute the bulk of voluntarycontributions.Asalreadymentioned,LDCsthataremembersoftheWTO(orareinthe process of acceding to the organization) are entitled to the Centre’s serviceswithout having to becomemembers of the ACWL. The ACWT’s proposed regularbudgetfor2019isCHF4,665,000.38
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ThereisgeneralagreementthattheACWLhasdoneagoodjob39andinthismannerhas contributed to the legitimacyof the international trading system.The reasonsinclude that it has had excellent leadership and dedicated staff; that its staff isrespected and trusted by parties seeking the Centre’s assistance, helping staff toestablishanopenanddeeprelationshipwithbeneficiaries;andthatitcanactasanhonestbroker,includingbyadvisinggovernmentswhentoseekacompromise.
B.AnAdvisoryCentreonInternationalInvestmentLaw
Any effort to establish an Advisory Centre on International Investment Law canlearnfromthearrangementsandexperienceoftheAdvisoryCentreonWTOLaw.40Thus, interested governments could establish an ACIIL as an independentintergovernmentalorganizationtodealwithinternationalinvestmentdisputes,withitsmembershipbeingopentoallcountries.Naturally,makingsuchaCentreoperationalrequiresaddressinganumberofissues.Someoftheseareoutlinednext.41
1.Beneficiaries
Tobeginwith—andusing as theprincipal criterion that respondent governmentsshould be under-resourced—the beneficiaries could only be developing countriesandeconomiesintransitionthataremembersoftheACIIL,with,ontheonehand,taking into account level of income, and, on the other hand, granting specialconditions to LDCs.42Many of these countries do not have the top-level in-househuman capacity to deal effectively with highly complex issues of internationalinvestment law,andmanyhavegreatdifficultiesallocating the financial resourcesrequired to hire international law firms to help in their defense. (A number ofdevelopedcountries,too,donothavethein-househumancapacityrequiredtodealwith the entire range of issues related to investment disputes. Switzerland, forexample,seeksexternalsupporttodefenditselfinISDScases,butithasthefinancialmeanstohireoutsidelawyerstodealwithcasesifandwhentheyarise.)Moreover, ifStates face(orare likely to face)disputesonly fromtimeto time, theopportunity costs of building up highly competent43in-house capacity (and thepossibility that competent staff may be rotated within the government, or hiredawaybyinternational lawfirms)maynotbeattractive.Atthesametime, itwouldbedesirableforgovernmentlawyerstobepartofanydefenseteamsandtodevelopthecapacitytopreventandresolvedisputesatthenationallevel(seebelow).
2.Services
Ideally, an ACIIL would assist requesting governments in the entire range ofchallengesrelatedtotheinternationalinvestmentlawandpolicyregimeingeneralandsourcesofconflictsinparticular.Mostnotably,suchassistancecouldbegearedtowards(1)seekingtoavoidthatconflictsariseinthefirstplace,includingthrough
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help in the drafting of IIAs, State contracts and national investment laws in amanner that helps to avoid conflicts between international investors and hostStates; (2) themanagement of conflicts between international investors and hostcountry governments at the national level so that, if and when conflicts arise(includingat thesub-national level), thesedonotreachthe international levelbutrather are resolved locally; and (3) the handling of disputes reaching theinternationallevelsothattheyaremanagedproperlywhentheyreachthatlevel.
There is no doubt that a number of countries would benefit from technicalassistance in regard to this entire rangeof challenges. Ideally, therefore, anACIILcouldbecomeaone-stopshop,sotospeak,andprovidecomprehensiveassistancetounder-resourcedgovernments.However,at least twoconsiderationsneedtobekeptinmindwhendiscussingthepossiblescopeofactivitiesofanACIIL,namelythedesirability to avoidduplicating theworkof other organizations and, at the sametime, keep funding needs down. Therefore, and before turning to the services anACIILcouldprovide,abriefreviewoftheassistancealreadyavailabletodevelopingcountriesisinorder.44
a.Conflictavoidance
The imprecise drafting of IIAs, State contracts and national laws and theirinsufficient implementation can be important reasons for conflicts betweeninternationalinvestorsandhostStatesthateventuallybecomeISDScasesandresultinhighcostsforrespondents.Addressingthisissueisthereforeimportant.Infact,anumberoforganizationsoffertechnicalassistanceinthisrespect(rangingfromthetraining of government officials to making ad hoc advisory services available torequestingcountries),oftenbasedonresearch.
Regarding thedraftingof IIAs and issues surrounding theseagreements,UNCTADhas a long-standing programme to provide training on the negotiation of suchtreaties, based on extensive and in-depth research and themonitoring of trends;informedbyintergovernmentaldeliberationsinitsInvestmentCommissionandits“Reform Package for the International Investment Regime”;45and, upon request,supplementedbycountry-specificadvisoryservices.46UNCTAD’s“InvestmentPolicyHub”, in particular, provides comprehensive information about the principal IIAmatters, including information on investment treaties, investment disputes,investment laws, andpolicymeasures.47TheOECD, too,has an intergovernmentalbodydealingwith investment issueswhosedeliberationsarepartly related to theorganization’s Policy Framework for Investment, 48 and the legal researchundertaken on investmentmatters. The Investment Policy and PromotionUnit oftheWorldBankGroupalsoprovidestrainingintheinternationalinvestmentarea.49Additionally, there are various non-governmental organizations that organizetraining and advisory services and undertake related research, including theInternational Institute for SustainableDevelopment50and the Columbia Centre onSustainableInvestment.51
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RegardingthedraftingofStatecontracts,negotiationssupportisavailablethroughtheInternationalSeniorLawyersProgram,whichhasalong-standingprogrammetoprovideprobonolegalservicestorequestinggovernmentsinrelationtoinvestmentand commercial contracts involving foreign investors.52TheAfricanLegal SupportFacility offers the same support toAfrican governments, free of charge.53And therecently established CONNEX initiative provides, also free of charge,multidisciplinary teams to requesting governments of developing countries andtransitioneconomiesworld-widenegotiatingcontractswithinternationalinvestors,focusedonextractiveindustriesandalsoinfrastructure.54Finally,theInternationalDevelopment Law Organization (IDLO) offers negotiation support related to theLDCs,basedonprobonoandreduced-feeservices.55
Regarding national investment laws, the same organizations that provide supportforthenegotiationofIIAsalsoassistinthedraftingofnationalinvestmentlaws.Inaddition, various countries provide funding for this purpose in the framework oftheirbilateralprogrammes.
Finally, and as observed earlier, even when the appropriate instruments are inplace,itisalsonecessarytoavoidill-advisedactionsbyStateauthorities,sometimesoutofignoranceofprovisionsinIIAs.Thischallengerequiresprimarilyactionatthenational level. In particular, it requires that central governments inform theirministriesandvarioussub-nationalentitiesabouttheobligationstheyhaveenteredintothroughinternationaltreaties.
b.Conflictmanagementatthenationallevel
If and when conflicts between international investors and host States occur—asthey inevitably do, as discussed earlier—the challenge becomes to manage themproperly and to avoid that they reach the international level. For this purpose, anumberof countrieshaveestablishedmechanisms tomonitor investorgrievancesbeforetheyescalateintooutrightconflicts,withaviewtowardsresolvingthem.Onesuch early-warning mechanism consists of the creation of the institution ofinvestmentombudspersons.Themostwell-knownoftheseisprobablytheOfficeofthe Foreign Investment Ombudsman, a grievance-resolution centre established intheRepublicofKoreain1999.56Anotherapproachistocreatenationalcoordinationcommittees towhich conflicts are being reported, with a view towards resolvingthem.Chile,Colombia,CostaRica,Mexico,andPeruareexamplesforhowthiscanbedone.57Thesemechanismsareveryusefultoaddressgrievancesandmanageconflicts,andthey are becoming more valuable as the number of international investmentdisputesrisesanddisputesbecomemorecomplexandcostliertoresolve.58Forthisreason,theWorldBankissupportingcountriesintheestablishmentofinvestment-grievance mechanisms to deal with investor grievances at an early stage and, ifpossible,resolvethem.59
Whendisputesreachtheinternationallevel,thechallengebecomesmanagingtheminamannerthatrespondentStatesareinthebestpossiblepositiontoprepareanddefendthemselvesadequately.Thisbeginswithundertakingproperpreparationswhenrespondentsarefacedwithformalnoticesofdisputesby claimants, that is, before arbitral proceedingsbegin.This is an important stage that may well be decisive for the subsequentdeliberations. In particular, governments that have not yet (or seldom) beeninvolved in international arbitral proceedings often lack the experienceof how tohandleanoticeofconsultationordispute.Forthisreason,ICSIDhasissueddetailedand practical step-by-step guidance on how to respond to investment claims;60italso provides capacity-building technical assistance on how cases are processedunderICSIDrules.61However,when it comes to formal international arbitral proceedings, virtually nosupport is available to respondent governments. The Permanent Court ofArbitration (PCA) has a Financial Assistance Fund that is financed by voluntarycontributions;ithelpsdevelopingcountriesthatmeetcertainconditionsmeetpartof the costs of (the relatively few) investment arbitrations administered by thePCA.62The United Nations Secretary-General’s Trust Fund to Assist States in theSettlement of Disputes through the International Court of Justice (ICJ) can assistStates that do not have the necessary financial resources in relation to expensesincurred in (the relatively few) ICJ investment arbitration cases; it is funded byvoluntary contributions and, hence, its support depends on the availability offunds.63Onoccasion,individualgovernmentsreceivefinancialsupportfromprivatefoundations,suchasUruguayinitscaseofPhilipMorrisvs.Uruguay.64TheAfricanLegalSupportFacilitymayselectivelyhelpcountriesinAfricainarbitrationcasesinwhich it has assisted them in negotiating the underlying contracts.65IDLO offersdispute-settlementsupportforLDCs,basedonprobonoandreduced-feeservices.66It ishowevernotclear towhatextentservicesofferedonaprobonobasiscanberelied on and are sustainable as an approach, given the costs involved; however,somefirmsmayprovidesuchservicesasastrategytoenterthemarketandbuilduptheirpractice.67Inotherwords,nopredictableservicescomparabletothoseavailableinotherareasrelatedtotheinternationalinvestmentlawandpolicyregimeingeneralandsourcesof conflicts in particular are available to support under-resourced respondentgovernmentsininternationalinvestmentdisputes.
d.ThepossiblescopeofactivitiesofanACIIL
Awiderangeof issuesrelatedto the international lawandpolicyregimerequiresattention,andunder-resourcedcountriescouldbenefitfromtechnicalassistanceinregard tomost of them. Fortunately, there are various support services available
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regarding most of them, even if these could be strengthened. However, when itcomestothehandlingofinvestmentdisputesattheinternationallevel,virtuallynopredictable support is available to under-resourced governments that arerespondentsininternationalinvestmentdisputes.This is particularly worrisome because—as discussed earlier—the number ofinvestmentdisputesislarge,thepotentialformanymoredisputesissubstantialandthecostsofinternationaldispute-settlementproceedings(both,intermsoffinancialcosts and possible negative effects for host countries) can be considerable;moreover, it is quite likely that high-quality representation may increase thelikelihoodof success in internationaldispute settlement.68At the same time,mostdeveloping countries and economies in transition do not have the human andfinancial resources to defend themselves adequately in international dispute-settlement proceedings; this, in turn, bears on the very legitimacy of theinternationalinvestmentlawandpolicyregime.In light of this situation, an independent Advisory Centre on InternationalInvestment Law would fill an important lacuna in the international investmentregime.Itcouldhave,asitscorepurposeandcompetency,toassistunder-resourcedbeneficiary governments in obtaining adequate legal defense in internationalinvestmentdisputes.Suchassistancecouldfocusontheselectionandappointmentofarbitrators;thepreparationofstatementsandevidence;thedevelopmentoflegalarguments;andtherepresentationathearings. Incorporatinggovernment lawyersfromrespondentStatesindefenseteams—includingintheformofmixedteams—would contribute to capacity building. Assistance could also include providingalternative dispute-resolution services and giving legal advice on procedural andsubstantive issues arising under international investment law. Moreover, since anumber of disputes are settle amicably after arbitrations have commenced andbeforefinalawardsarerendered,theCentrecouldplayausefulrole inpromotingsuchsettlements.69The scope of the Centre’s work could also encompass the initial assessment andpreparation of cases, given that proper preparations are crucial for the actualhearingsofdisputes;thiscouldincludeanalysesofrisksassociatedwithcasesandadvice togovernmentsas towhetherornot they should seek to settle a case—orseekmediation—beforeformalproceedingsbegin.ClosecooperationwithICSIDtopreparegovernments forpossible caseswouldbeverydesirable in this respect,70considering that that organization is already providing services in this area. ThiswouldalsocontributetothebuildingoflocalcapacityregardingISDSissues.In having this clear focus, an ACIILwould avoid duplication of thework of otherorganizations and—also an important consideration—itwould become financiallymore feasible, as dispute-settlement proceedings alone can be very expensive. Infact,particularcareneedstobe takennot tooverloadthemandateofaCentre,asotherwise financial considerations might ultimately prevent the Centre’sestablishment.
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Beyonditscoremandate,theCentre’sworkcouldeventuallybeextendedtoprovidetechnical assistance and capacity building in other areas of the internationalinvestment regime, in particular as regards the creation of conflict-managementarrangements at the national level and the exchange of experience and bestpractices. Such a phasing-in could take place in the light of experience gained, bemade dependent on need and the availability of resources and be subject to theavoidanceofduplication.
3.Governance
Membership in an ACIIL could be open to all countries: developing countries,economiesintransitionanddevelopedcountries.AswiththeACWL,anACIILcouldhave a general assembly (consisting of representatives of its members andbeneficiaries)tooverseeallaspectsoftheCentre’sfunctioning,andamanagementboard (consisting of a small number of representatives chosen to reflect theorganization’s membership) to decide matters related to the Centre’s operation.SuchastructurewouldallowtheACIILoperateinanindependentmanner.An Executive Director could manage the Centre’s day-to-day activities. TheExecutive Director would have to provide competent leadership, supported bydedicated staff who is respected and trusted by beneficiary respondents. This, inturn,wouldallowthestafftoestablishastrongrelationshipwithrespondentsandtoactasanhonestbroker, includingbyadvisinggovernmentsonwhentoseektosettleadispute. Infact,suchaCentremightbe inabetterpositionthananyotherorganizationtoacquirethetrustanddeepcooperationofitsclients.Crucially—and this is central to the Centre’s credibility—the in-house staff oflawyerswouldhave to be experts in international investment law. Staffingwouldhave to recognize that international investment law is not a unified body of law,making it a complex 71 matter to resolve investment disputes—although notnecessarilyamorecomplexmatterthanresolvingWTOdisputes:WTOlawincludesmany different agreements covering various topics (antidumping, subsidies,intellectualproperty, technicalbarriers,etc.),while investmentdisputes (althoughinvolving a much higher number of instruments) are largely about a handful ofprovisions.72(TheACWLhad, as of July2019, a professional staff of 12,with fouradditionalstaffonitssecondmentprogramme.73)
4.Financing
As discussed earlier, the conduct of arbitration proceedings is costly. Hence, theestablishmentofanACIILwouldrequirethecreationofasubstantialtrustfund.Itcould be financed by countries that have a particular interest in a functioninginternational investment regime and are in a position to provide technicalassistancefunds,aswellasone-timepaymentsbygovernmentsbecomingmembersoftheCentre.
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TheCentrecouldchargesomeofitsmembersmodestfeesforitsassistance,ifonlytomakesurethattheyareconscientiousinusingitsservicesandtosignalseriouscommitment.74Moreover, incases inwhichtribunalsallocate(partof)thecostsofarbitration and/or defense to claimants, these funds should revert to the trustfund.75 Beyond that, the Centre would need to elicit voluntary contributions,includingfromfoundations.Finally,itmayalsobeworthwhiletoconsideralonger-termapproach in the frameworkofwhich IIAs could stipulate that investorswithclaimsaboveacertainsizeneedtopayasmallpercentageof theirclaims intotheACIIL’strustfund,contributinginthismannertothefinancingneedsoftheCentre.76While such an approach raises all sorts of questions andhencewouldneed to befurther thought through,77it could also contribute to more conservative claims78andfurthermorediscouragefrivolousclaims.
Underlyingthe importantquestionofhowto financeaCentre is theconsiderationthatawell functioningandbroadlyacceptedinternational investmentregimeis intheinterestofStatesandinvestors.
Summary,conclusionsandthewayforward
Thereisundeniablyasubstantialneedforassistanceforunder-resourcedStatesona range of issues related to the international investment law and policy regime.Nowhereisthatneedgreaterthaninrelationtoitsdispute-settlementmechanism,theheartoftheinvestmentregime.Thecentralityandpotencyoftheregime’sdispute-settlementmechanismmakesitimportantthatallStateshavedefactoaccesstoitonthebasisofequalityofarms,todefend themselves in the best possiblemanner. This is all themore important inlightof theriseof international investmentdisputes(andthesubstantialpotentialfor considerably more disputes) and the costs of these disputes. Yet, manydeveloping countries simply do not have the experienced personnel and financialresourcestodefendthemselvesadequatelyininternationalinvestmentdisputes.Itis a regime flaw that undermines the credibility—and hence legitimacy—of theinvestmentregime.Theproposal foranAdvisoryCentreon International InvestmentLawthat isnowontheagendaofUNCITRAL’sWorkingGroupIIIismeanttorectifythisdeficiency.
TherearemanyissuesthatneedtobedecidedinestablishinganACIIL,79especiallyits beneficiaries, the scope of its services, its governance, and its financing. GiventhatestablishingsuchaCentreiscostly(inlightofthecostsofinternationaldisputesettlement)andconsideringtheworkundertakenbyotherorganizations, itwouldbeadvisabletofocustheCentre’sworkonassistingunder-resourcedgovernmentsinthelegaldefenseininternationalinvestmentdisputes.
Hence, andmore specifically, the coremandate of an ACIIL—its central objectiveand competence—could consist of providing under-resourced governments
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(through its own staff, in combination with representatives of the respondentgovernments) with assistance in the selection of arbitrators, the development oflegal arguments, the preparation of statements and evidence, and therepresentation at hearings. It could also include providing alternative dispute-resolution services and giving legal advice on issues arising under internationalinvestment law. The focus of its mandate could furthermore include the initialassessmentandpreparationofcases,giventhatproperpreparationsarecrucialfortheactualhearingofcases.
Such an Advisory Centre would complement the assistance provided by variousgovernmentalandnon-governmentalorganizations inothermattersrelatedtotheinvestment regime, especially regarding conflict avoidance (including thenegotiationofIIAs)andconflictmanagementatthenationallevel. Overtime,withexperiencegained,dependingonneedandtheavailabilityofresources,andsubjecttotheavoidanceofduplication,theCentre’sservicescouldeventuallybeextendedtootherareasofassistance.Indetermining theservicesprovidedbyanACIIL, careneeds tobe taken that thescopeofitsworkdoesnotbecometoobroad:overloadingtheCentre’smandateattheoutsetcouldriskraisingthefinancialresourcesthatarerequiredtobringitintoexistence,jeopardizingtheentireproject.By providing administrative and legal assistance to under-resourced respondents,anACIILwouldestablishalevelplayingfieldininternationalinvestmentdisputes.Itwouldprovidede factoaccess to justice andequalityof arms. In thismanner, theACIILwouldfillasignificantlacunaintheinternationalinvestmentregime,alacunathat is of great importance for many developing countries and economies intransitionand,more fundamentally, for thecredibilityandhence legitimacyof theregime itself. Efforts leading to its establishment should be initiated as soon aspossible,inparalleltoothereffortstoimprovetheinternationalinvestmentlawandpolicyregime.It is therefore timely for the UNCITRAL Working Group III to consider thedesirabilityofanAdvisoryCentreon International InvestmentLaw, in lightof thequestionsraised inthispaper.Perhapsan informal inter-sessionalmeetinghostedbyinterestedgovernmentscouldthendevelop—onthebasisofbroadelementslaidoutbytheWorkingGroup—aconsideredunderstandingofthekeyissuesinvolvedinrelationtotheestablishmentofanACIIL,forconsiderationduringasubsequentsessionoftheWorkingGroup.Beyondthat,interestedgovernmentsmayalsowanttoconsultontheideaofanACIILatthemarginsofothermeetings,especially inaregionalcontext.Finally,andasapreparatorystep, theUNCITRALSecretariat—orthe ISDS Academic Forum—could perhaps organize a webinar for interestedgovernment representatives to outline the idea of an Advisory Centre onInternational Investment Law and, in this manner, contribute to reaching aninformedunderstandingoftheidea.
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1See,“WorkingGroupIII:2017topresent. Investor-StateDisputeSettlementReform”,availableat2See,UNCITRAL, “Report ofWorkingGroup III (Investor-StateDispute SettlementReform) on thework of its thirty-fourth session (Vienna, 27 November–1 December 2017)”, documentA/CN.9/930/Rev.1 of 19 December 2017, available at https://undocs.org/en/A/CN.9/930/Rev.1,and its Addendum: UNCITRAL, “Report of Working Group III (Investor-State Dispute SettlementReform) on the work of its thirty-fifth session (New York, 23–27 April 2018)”, documentA/CN.9/935,availableathttps://undocs.org/A/CN.9/935;UNCITRAL,“ReportofWorkingGroupIII(Investor-State Dispute Settlement Reform) on the work of its thirty-sixth session (Vienna, 29October–2November 2018)”, documentA/CN.9/964, available at https://undocs.org/A/CN.9/964;and UNCITRAL, “Report of Working Group III (Investor-State Dispute Settlement Reform) on theworkofitsthirty-seventhsession(NewYork,1–5April2019)”,documentA/CN.9/970,availableathttps://undocs.org/A/CN.9/970.3For a recent comprehensive discussion of the rise of treaty-based investment disputes and theirsalientfeatures,see,RobertoEchandi,“Thedebateontreaty-basedinvestor-Statedisputesettlement:empiricalevidence(1987-2017)andpolicyimplications”,ICSIDReview,2019,pp.1-30,andMalcolmLangford, Daniel Behn and Laura Letourneau-Tremblay, “Empirical perspectives on investmentarbitration:whatdoweknow?Does itmatter?” ISDSAcademicForumWorkingGroup7Paper,15March 2019, available at https://www.cids.ch/images/Documents/Academic-Forum/7_Empirical_perspectives_-_WG7.pdf.4See,UNCTAD,“UNCTADfactsheet:numberofnewinvestor-statedisputesettlementcasesin2018”,IIA Issues Note, issue 2 (May 2019), available athttps://unctad.org/en/PublicationsLibrary/diaepcbinf2019d4_en.pdf,p.1.5 See, UNCTAD, Investment Dispute Navigator, available athttps://investmentpolicy.unctad.org/investment-dispute-settlement. For the classification ofcountries, see UNCTAD,World InvestmentReport 2019: Special Economic Zones (Geneva: UNCTAD,2019),annextable1.6 See, ICSID, “Spotlight on contract-based disputes at ICSID”, available athttps://icsid.worldbank.org/en/Pages/resources/Spotlight-on-Contract-based-Disputes-at-ICSID.aspx.AsofDecember31,2018,ICSIDhadregistered706casesundertheICSIDConventionandAdditionalFacilityRules.Contract-basedcasesamountedto16%ofthetotal.See,ICSID,“TheICSIDcaseload—statistics (Issue 2019-1), available athttps://icsid.worldbank.org/en/Documents/resources/ICSID%20Web%20Stats%202019-1(English).pdf,p.7.7Ibid.,p.10.Inafewofthesecases,theinstrumentofconsentwasalsoatreaty.8Thesearepubliclyknowndisputesonly.9 See, UNCTAD, “Investment Dispute Navigator”, available athttps://investmentpolicy.unctad.org/investment-dispute-settlement.10See,ICSID,“Spotlightoncontract-baseddisputes”,op.cit.Inafewofthesecases,theinstrumentofconsentwasalsoatreaty.11See,BrookeGuvenandLise Johnson, “Thepolicy implicationsof third-party funding in investor-state dispute settlement” (New York: CCSI, 2019), available athttp://ccsi.columbia.edu/files/2017/11/The-Policy-Implications-of-Third-Party-Funding-in-Investor-State-Disptue-Settlement-FINAL.pdf. It is not clear to what extent (if at all) respondentshavehadaccesstothird-partyfunders.12See,UNCTAD,WorldInvestmentReport2019,op.cit.,p.216.13It has been observed that, “As a consequence of ISDS tribunals’ permissive approach to SRL[shareholder reflective loss](the “pro-SRL interpretation”), investment treaties expose the Statespartiestomultiple(potentiallylimitless)claimsinrelationtoasingledispute.Thefirm,aswellasitsindividual shareholders,may all bring suit over the same alleged treaty breach.Andmost treatiesrequireneitherthatsuchclaimsbejoinednorthattheybebroughtsimultaneously.”See,JulianArato,Kathleen Claussen, Jaemin Lee, and Giovanni Zarra, “Reforming shareholder claims in ISDS”,
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UNCITRAL Academic Forum on ISDS Working Paper 2019/9, available athttps://papers.ssrn.com/sol3/papers.cfm?abstract_id=3433465,para.7.14Foradiscussion,see, forexample,CatherineTiti, JulienChaisse,MarkoJovanovic,FacundoPérezAznar, andGabrielBottini, “Excessive costs& insufficient recoverabilityof cost awards,”AcademicForum on ISDS, 14 March 2019, available at https://www.cids.ch/images/Documents/Academic-Forum/1_Costs_-_WG1.pdf;seealsoLangfordetal.,op.cit.,pp.7-10,andSusanD.Franck,MythsandRealities in InvestmentTreatyArbitration (Oxford: OUP, 2019).Moreover, there are other costs: asNicolasAngeletpointedout, the financingof investment arbitrationdisproportionately affects thefinancingofpublicwelfareindevelopingcountries,suchashealthandeducation.;seehis“Financinginvestor-Statedisputesettlement:istherearolefortheAfricanDevelopmentBank?”ICCACongressSeries,no.19,pp.546-555.15Matthew Hodgson and Alistair Campbell, “Damages and costs in investment treaty arbitrationrevisited,” Allen & Overy, 14 December 2017, availableathttp://www.allenovery.com/SiteCollectionDocuments/14-1217_Damages_and_costs_in_investment_treaty_arbitration_revisited_.pdf. The mean averages aredistortedbythelargestclaims.16ExcludingYukosvs.theRussianFederation.17AgainexcludingYukosvs.theRussianFederation.18Ibid.19See,Langfordetal.,op.cit.,Echandi,op.cit.,Titietal.,opcit.,andLukeNottageandAnaUbilava,“Costs, outcomes and transparency in ISDS arbitrations: evidence for an investment treatyParliamentary Inquiry,” Sydney Law School Research Paper no. 18/46, August 2018, available athttps://ssrn.com/abstract=3227401.20Thus, ithasbeenclaimedthat the filingofclaims leads tosubstantial losses inFDI inflows;see,ToddAlleeandClintPeinhardt,“Contingentcredibility:theimpactofinvestmenttreatyviolationsonforeigndirect investment”,InternationalOrganization,vol.65(2011),p.414.ResearchbyShahryarMinhas andKarenL.Remmer suggests that,while disputes registered at ICSIDbetween1984 and2006didnothaveanimpactonthereputationofhostStatesrespondentsininternationalinvestmentdisputesandinvestmentflowstothem,thoseregisteredafter2006did.Seetheir“Thereputationalimpact of investor‐State disputes,” International Interactions, vol. 44 (2018), pp. 862‐887,availableathttps://www.tandfonline.com/doi/ref/10.1080/03050629.2018.1492384.21Op.cit.22Thesameissuecanberaisedforresourceconstrainedinternationalinvestors,especiallysmallandmedium-sizedenterprisesandnaturalpersons.Thisissueisnotbeingdiscussedhere.23See(asof31July2019),documentsA/CN.9/WG.III/WP.162-SubmissionfromtheGovernmentofThailand, para. 26; A/CN.9/WG.III/WP.159/Add.1 - Submission from the European Union and itsMember States, para. 38;A/CN.9/WG.III/WP.161 - Submission from the Government of Morocco,para 18; A/CN.9/WG.III/WP.164 -Submission from the Governmentof Costa Rica, Annex I (c);A/CN.9/WG.III/WP.173- Submission from the Governmentof Colombia, p. 8;A/CN.9/WG.III/WP.174-SubmissionfromtheGovernmentofTurkey(advancecopy),sectionIII;andA/CN.9/WG.III/WP.179-SubmissionfromtheGovernmentoftheRepublicofKorea(advancecopy),section2,allavailableathttps://uncitral.un.org/en/working_groups/3/investor-state.24SeeinthiscontextthereportpreparedbytheUNCITRALSecretariatforthisagendaitem:UnitedNations Commission on International Trade Law, Working Group III (Investor-State DisputeSettlementReform), “Possible reformof investor-Statedispute settlement (ISDS):AdvisoryCentre.Note by the Secretariat”, Thirty-eighth session, Vienna, 14–18 October 2019, documentA/CN.9/WG.III/WP.168 of 25 July 2019, available athttps://uncitral.un.org/sites/uncitral.un.org/files/wp168.pdf. There may be other ways in whichthis objective could be achieved. In particular, one could establish a litigation fund on whichcountriescoulddraw;onecouldsetuparevolvingfundintowhichsuccessfulrespondentscouldpaya part of the damages that they did not need to pay; and one could seek tomobilize pro bono orreduced-feeservices.
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25For a discussion of earlier efforts to establish an ACIIL, see Anna Joubin-Bret, “Establishing anInternationalAdvisoryCentreonInvestmentDisputes?”(Geneva:ICTSDandWEF,2015),availableathttp://e15initiative.org/wp-content/uploads/2015/09/E15-Investment-Joubin-Bret-Final.pdf, andRobertSchwieder, “Legal aidand investment treatydisputes:Lessons learned from theACWLandinvestment experiences”, available athttps://papers.ssrn.com/sol3/papers.cfm?abstract_id=3093651#. See also, EricGottwald, “Levelingtheplayingfield: Is it timefora legalassistancecenter fordevelopingnations in investmenttreatyarbitration?” American University International Law Review, vol. 22 (2007), pp. 238-275, LukeNottage and Kate Miles, “'Back to the future' for investor-State arbitrations: Revising rules inAustralia and Japan tomeet public interests,” Sydney LawSchoolResearchPaperNo. 08/62, June2008, available at https://ssrn.com/abstract=1151167, p. 21, Karl P. Sauvant, “The evolvinginternationalinvestmentlawandpolicyregime:waysforward.E15TaskForceonInvestmentPolicy”(Geneva:InternationalCentreforTradeandSustainableDevelopmentandWorldEconomicForum,E15 Initiative, 2016), available at https://ssrn.com/abstract=2721465, ch. 3.4, andFranck, op. cit.,pp.301-302.26ForadiscussionoftheACWL,seeNiallMeagherandLeahBuencamino,“TheAdvisoryCentreonWTOLaw (‘ACWL’),”MaxPlanckEncyclopediaof InternationalProceduralLaw (forthcoming 2019)and the literature cited therein, andNiallMeagher, “Representing developing countries before theWTO: the role of the Advisory Centre on WTO Law (ACWL)”, available athttps://cadmus.eui.eu/bitstream/handle/1814/35747/RSCAS_PP_2015_02.pdf.27See,ACWL,“Members”,availableathttps://www.acwl.ch/members-introduction/.28 ACWL, “The services of the ACWL,” available athttps://www.acwl.ch/download/ql/Services_of_the_ACWL.pdf,p.2.29Ibid.30Ibid.,p.5.31Ibid.,pp.8-26.32 ACWL, “Report on operations 2018”, available athttps://www.acwl.ch/download/dd/reports_ops/Final_Report_on_Operations_2018-for-website.pdf,p.1.33Theassociatememberstatuswasdesignedtofacilitatetheparticipationofinterestedgovernmentspending ratification of the ACWL agreement. Associate members have all the privileges of a fullmember,excepttheright tovote(therehavenotbeenanyvotesso far).Currently,Germany is theonlyassociatemember;itisintheprocessofbecomingafullmember.34See,ACWL,“Members”,op.cit.,andACWL,“TheservicesoftheACWL”,op.cit.,p.4.35Ibid.36Ibid.37Ibid.,pp.5-6.38 See, ACWL, “Budget for 2019: Proposal of the Management Board,” documentACWL/MB/W/2019/6 of 5 October 2018, available athttps://www.acwl.ch/download/general_assembly_mmeting_documents/11.12.2018/ACWL-MB-W-2018-6-Budget-for-2019.pdf,para.5.39See,e.g., JamesRansdell, “Financialandtechnicalsupport for litigants in inter-Statedisputes: theexample of the WTO and the Advisory Centre for WTO Law”, 1 February 2017, availableathttps://ssrn.com/abstract=2957476,GregoryC.Shaffer, “Assessing theAdvisoryCentreonWTOLawfromabroadergovernanceperspective”,29November2011,MinnesotaLegalStudiesResearchPaper No. 11-46, available athttps://ssrn.com/abstract=1966251 and Chad Bown,Self-EnforcingTrade:DevelopingCountriesandWTODisputeSettlement(Washington: Brookings Institution Press,2009).40ForoneconceptionofanACIIL,seeJeremySharpe,“Aninternationalinvestmentadvisorycenter:Beyond the WTO model”, EJIL: Talk!, 26 July 2019, available at https://www.ejiltalk.org/an-international-investment-advisory-center-beyond-the-wto-model/.41Foranexhaustivediscussionoftheissues,see,CCSI,“Ascopingstudyonsecuringadequatelegaldefense in proceedings under international investment agreements. Prepared for the Ministry ofForeignAffairsoftheNetherlandsbytheColumbiaCenteronSustainableInvestment”,forthcoming.
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42One could also consider the possibility of granting other members of the ACIIL (includingdeveloped countries) the right to seek assistance in specific circumstances, e. g., to request legalopinionswhenanumberof(developedanddevelopingcountry)governmentsfaceclaimsarisingoutofthesamemeasures/circumstances,asthismayhelpclarifyissuesofrelevancetotheinvestmentregimeasawhole.43Andifthein-housecapacityisnottop-level,respondentsmaybeatadisadvantagewhendefendingthemselves.Moreover,if,becauseofinadequaterepresentation,respondentslosecases,unfortunateprecedents (even if not binding) may be set for subsequent cases, with potential systemicimplications.44Foracomprehensivereview,seeCCSI,op.cit.45 See, UNCTAD, “UNCTAD’s Reform Package for the International Investment Regime (2018edition)”, available at https://investmentpolicy.unctad.org/publications/1190/unctad-s-reform-package-for-the-international-investment-regime-2018-edition-.46See,UNCTAD,“ReviewoftechnicalcooperationactivitiesofUNCTADandtheirfinancing.Reportbythe Secretary-General of UNCTAD”, document TD/B/WP/290/Add. 1, available athttps://unctad.org/meetings/en/SessionalDocuments/wpd290add1_en.pdf.47See,UNCTAD’s“InvestmentPolicyHub”,availableathttps://investmentpolicy.unctad.org.48 See, OECD, “The Policy Framework for Investment,” available athttps://www.oecd.org/investment/pfi.htm.49 See, World Bank, “Investment policy and promotion”, available athttps://www.worldbank.org/en/topic/investment-climate/brief/investment-policy-and-promotion.50See, e.g., IISD, “12th Annual Forum of Developing Country Investment Negotiators”, available athttps://www.iisd.org/event/12th-annual-forum-developing-country-investment-negotiators. SometrainingsareprovidedtogetherwiththeSouthCentre.51 See, CCSI, “Policy and advisory work + investment law and policy”, available athttp://ccsi.columbia.edu/work/projects/?proj_type=policy-advisory&proj_area=investment-law-policy.52Fordetails,see,InternationalSeniorLawyersProject,“Ourwork”,availableathttp://islp.org/our-work/.53 For details, see, African Legal Support Facility, “What we do”, available athttps://www.aflsf.org/tags/african-legal-support-facility.54Fordetails,CONNEXSupportUnit,“About”,availableathttps://www.connex-unit.org/en/.55For details, see, IDLO, Investment support services for least developed countries” available athttps://www.idlo.int/Investment-Support-Programme-LDCs#Partners; the programme is based onprobonoorreduced-feeservices.56 For details, see, “Foreign Investment Ombudsman, About us”, available athttp://ombudsman.kotra.or.kr/eng/au/message.do.Foradiscussion,seeF.Nicolas,S.ThomsenandM.Bang,“LessonsfrominvestmentpolicyreforminKorea,”OECDWorkingPapersonInternationalInvestment,n°2013/02(2013).57Foradiscussion,seeUSAIDandAPEC,“Investor-Statedisputepreventionstrategies:selectedcasestudies” (Washington, DC: USAID and APEC, 2013), available athttps://www.apec.org/Groups/Committee-on-Trade-and-Investment/~/media/Files/Groups/IEG/20130625_IEG-DisputePrevention.pdf.Seealso,APEC,BestPracticesGuidebook:CapacityBuildingtoEnsureAppropriateandPromptConsiderationof Investors’Complaints to Improve the Investment Climate within APEC (Moscow: Ministry of EconomicDevelopment,2012),availableathttps://www.apec.org/-/media/APEC/Publications/2015/7/Best-Practices-Guidebook--CapacityBuilding-to-Ensure-Appropriate-and-Prompt-Consideration-of-Investo/IEG_Best-Practices-Guidebk-2015.pdf.58The fact thatmanydisputes are settledduringarbitralproceedings suggests that thesedisputescouldpotentiallyhavebeensettlednationallybeforereachingtheinternationallevel:ofthedisputesbrought to ICSID,36%of the casesweredisputes thatwere settledorproceedingwereotherwisediscontinued. See, ICSID, “The ICSID caseload—statistics (Issue 2019—1)”, available athttps://icsid.worldbank.org/en/Documents/resources/ICSID%20Web%20Stats%202019-1(English).pdf.
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59See,World Bank, “Investment policy and promotion: product offering” (Washington, DC:WorldBank Group, n.d.), available at http://pubdocs.worldbank.org/en/952171510251453291/IPP-Tools-booklet.pdf.60 See, ICSID, “Practice notes for respondents in ICSID arbitration”, available athttps://icsid.worldbank.org/en/Documents/resources/Practice%20Notes%20for%20Respondents%20-%20Final.pdf.61 See, ICSID, “Introduction to ICSID course”, available athttps://icsid.worldbank.org/en/Pages/about/Introduction-to-ICSID-Courses.aspx.62See,PCA,“FinancialAssistanceFund”,availableathttps://pca-cpa.org/en/about/structure/faf/.63 See, ICJ, “Financial assistance to parties”, available at https://www.icj-cij.org/en/financial-assistance-to-parties.64Bloomberg Philanthropies supported Uruguay in this case. See, Sarah Boseley, “Bloomberg andGateslaunchlegalfundtohelpcountriesfightbigtobacco,”TheGuardian,18March2015,availableathttps://www.theguardian.com/society/2015/mar/18/bloomberg-gates-foundation-fund-nations-legal-fight-big-tobacco-courts.65InformationprovidedbyStephenR.Karangizi,DirectorandChiefExecutiveOfficer,ALSF.66Fordetails,see,IDLO,op.cit.67Inaddition,sincemostinvestment-disputecasesdonotinvolveaclearpublicinterest(as,e.g., inPhilipMorrisvs.Uruguay),butratherareofapurelycommercialnature,thisreducestheappealofprobonoservices.68For a discussion of the extent to which attorney experience affects arbitration outcomes, see,SusanD.FranckandLindseyR.Wylie,“Predictingoutcomesininvestmenttreatyarbitration,”DukeLawJournal,vol.65(2015),pp.461-526.69See,AnaUbilava, “Amicablesettlements in investor-Statedisputes:empiricalanalysisofpatternsandperceivedproblems,” SydneyLawSchool,ResearchPaperno.19/17 ,March2019, available athttp://dx.doi.org/10.2139/ssrn.3352181.70This could be done, for example, through joint workshops in interested countries, in order tofamiliarizegovernmentswiththerangeofissuessurroundinginvestmentdisputes.71OneofthecomplexitiesconcernsthepossibilitythattheACIIL,inrepresentingStates,mayhavetotakedifferentpositionsonthesameobligation,dependingontheunderlyinginstrument.72However, ACIIL lawyers would require a different skill set than those working in the ACWLbecauseadvocacy inWTOdisputes isdifferent fromadvocacy in ISDS,whereextemporaneousoralpleadingsandwitnessexaminationareessential.73See,ACWL,“Staff”,availableathttps://www.acwl.ch/staff/.74There is also the question of avoiding that a few governments with many disputes de factomonopolizetheCentreonaccountofarelativelyhighnumberofarbitrationstheyface.Oneapproachtodealingwiththisissueistoconsideraprogressivescaleoffees.75ThiswouldrequiresettingupaninternalsystemforACIILlawyerstoaccountfortheirtimespentonaparticularcase.76AnideaadvancedbyPatrickPearsall.77Forexample:Wouldsuchanapproachleadtoinvestorsclaimingthatthedamagessufferedwereactuallyhigheronaccountofsuchaprovision?Wouldtribunalscompensateforthisindetermingingawards?Should(partof)suchapaymentbereimbursedifinvestorsprevail?78See,NottageandUbilava,op.cit.,,whosestatisticssuggestthatclaimsmaybeoverstated.79Foranexhaustivediscussionoftheissuesinvolved,seeCCSI,“Ascopingstudy”,op.cit.
