Donnelly Speaks Up for Business at UN Trade Meetings

Shaun Donnelly

USCIB Vice President for Investment Policy Shaun Donnelly single-handedly represented the views of the business community at last week’s meetings of the United Nations Commission on International Trade Law (UNCITRAL) Working Group III on Investor-State Dispute Settlement (ISDS).  The week-long meetings at UN Headquarters in New York were, according to Donnelly, “a painstaking death march through a draft UNCITRAL document on real or perceived problems with the existing ISDS system.” Eighty UN member governments (sixty of whom serve terms as full UNCITRAL members, plus 20 observer governments) were generally critical of the current systems and numerous NGO observers were always happy to chime in to attack ISDS investment arbitration and businesses which use those protections, reported Donnelly.

It fell to a relative handful of government delegations plus Donnelly and one European business representative, as well as fellow observer representatives from leading law and arbitration bodies such as the American Bar Association,  the American Society of International Law, and the American Arbitration Association to defend the well-established ISDS arbitration system.

“Clearly ISDS is under assault from NGOs and many developing countries,” said Donnelly. “The European Union and its member states are pushing hard for early negotiations on a new permanent multilateral investment court to replace the whole ISDS system.” Donnelly and other observers continued to emphasize in formal interventions and in corridor conversations with key delegations the proven strengths of the current ISDS system and, by implication, serious problems with some of the more state-dominated “reform” proposals.

“Frankly, it’s frustrating, “ Donnelly said, “to see UNCITRAL and many of its member governments so intent on rushing hell-bent to replace a proven system of independent, expert arbitrators to resolve complex investment disputes. Ideas from the EU and others to replace ISDS with some sort of state-dominated permanent court seem explicitly designed to be hostile to investors and are not helpful.”

UNCITRAL is scheduled to continue semi-annual WG meetings, alternating between Vienna and New York, and will be turning to debating specific alternative systems. These issues will need more attention from US and international business going forward, both at the sessions and intersessionally with national governments.

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