Emerging Trends in Investor-State Dispute Settlement in New Free Trade Agreements

The Investor-State dispute settlement (ISDS) mechanism is going through a churning. Several countries, developed and developing, have started contesting the ISDS regime. This is reflected in the treaty practice of these countries. This article studies some of the recently signed free trade agreements (FTAs) that contain an investment chapter to find out if there are broad discernible trends in the treaty practice of countries on ISDS reflected in these FTAs. The article argues that there are three broad trends that one can decipher. First, some FTAs do not contain an ISDS provision. Second, some contain a limited ISDS provision. Third, the FTAs signed by the European Union shows a departure from the traditional ISDS mechanism toward an investor court system to settle international investment law disputes. These trends in FTAs on ISDS are part of the global practice that is not reposing the similar faith in ISDS as was the case in the last few decades.