The EU TTIP Investment Court Proposal and the WTO Dispute Settlement System: Comparing Apples and Oranges?

In the Fall of 2015 and following an open consultation process, the European Union proposed important changes to the standard investor-state arbitration regime in the Transatlantic Trade and Investment Partnership (TTIP)-a multilateral investment and trade agreement between the European Union and the United States. Through these changes, the EU seeks to significantly reform investor-state dispute resolution (ISDS) given what it characterizes as "widespread public concern'' that the current ad hoc arbitration model lacks arbitral neutrality, transparency, and consistency and predictability in arbitral awards. The key element of the EU's proposed reforms is the creation of an Investment Court System (ICS) that is institutionally modeled after the WTO dispute resolution system. Similar to the WTO dispute resolution system, the ICS would have a First Instance Tribunal and an Appeals Tribunal dedicated to resolving international investment disputes staffed by permanent "judges'' chosen by the EU and the US. However, the EU's significant departure from traditional investor-state arbitration has raised many questions as to the suitability of importing WTO dispute resolution features into ISDS and, in particular, whether or not the proposed ICS would in fact serve the EU's goals of ISDS reforming through increased arbitral neutrality, transparency, and consistency and predictability in arbitral awards. Although both the WTO and ISDS regimes deal with matters of international economic law, there are key differences in each regime that should be considered. These differences include the characteristics of the disputing parties, the remedies available, and the underlying objectives of the dispute resolution systems. The authors conclude that these differences are so significant that certain institutional features tailored for the WTO simply do not translate into ISDS. As a result, these differences are likely to hinder the EU's efforts to reform ISDS through the ICS.