Originally from Investment Treaty Arbitration and International Law Volume 17

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I. INTRODUCTION

I will be arguing for the proposition that investor-state mediation will emerge as the preferred mechanism to resolve investor-state disputes. I am happy to say that it is an auspicious time to be making this case. As many of you will know, investment mediation and dispute prevention is one of the seven “reform” elements being considered by UNCITRAL Working Group III. The impetus for the creation of the Working Group III was, of course, the “growing consensus” that the existing investor-state dispute settlement system requires reform,  and it is telling that mediation is seen by Working Group III an essential part of the response.

In this paper, I will begin by comparing the apparently limited use of mediation in investor-state disputes at present with stakeholders’ favorable attitudes. Second, I will sketch the emerging legal framework that is rendering investor-state mediation an attractive alternative to arbitration. Third, I will turn to the key benefits of mediation. And finally, I will address the continuing hurdles faced by mediation.

Consequently, I will not dwell too long on the challenges faced by investor-state arbitration.

II. DEFINITION, PREVALENCE, AND ATTITUDES TO MEDIATION

Mediation is a familiar concept, and its key features are well captured by the definition in Working Group III’s draft provisions, which describe mediation as:

a process, irrespective of the expression used or the basis upon which the process is carried out, whereby parties attempt to reach an amicable settlement of their dispute with the assistance of a third person or persons (“the mediator”) lacking the authority to impose a solution upon the parties to the dispute.