INVESTMENT COURT: REVIEW OF THE EU INITIATIVE

INTRODUCTION. Disputes between investors and States are traditionally resolved through arbitration, However, decades of arbitration practice have revealed some shortcomings and pitfalls of this mechanism. Nowadays, a reform of international investment arbitration is actively discussed on many international platforms. At the same time, there is a completely radical approach to solving the problem: the transition from arbitration to dispute resolution through a permanent judicial institution. In March 2018, the EU Council approved the launch of negotiations on the establishment of a Multilateral investment Court (MIC). Earlier, this idea was supported in the context of drafting agreements between EU and Vietnam and Canada. There is a number of prerequisites for such a court to emerge, including public opinion in the EU. However, the implementation of the project requires that many related issues be solved.

MATERIALS AND METHODS. The research is based on the theoretical works of scholars of different views on the topic; analytical works of legal practitioners; working materials of the European Commission, which leads comprehensive work on the development and promotion of the MIC project investment; among international legal sources the research used the Investment Protection Agreement between the EU and Vietnam and the Comprehensive Economic and Trade Agreement (CETA) between the EU and Canada, as wells as a recent advisory opinion of the EU Court of Justice on the relationship between the EU law and the new dispute-settlement mechanism. The methodological framework of the research is based on the comparative and historical method, as well as general scientific methods such as analysis, synthesis, analogy, description, deduction.

RESEARCH RESULTS. This study provides a manifold analysis of the MIC proposal. The reasons for a common interest in that proposal amid decrease of confidence in arbitration procedures are explained. The authors identify strong points of the investment court, which are needed for improvement of the current system of dispute resolution by arbitration. These features comprise the uniformity of approaches; the independence of judges; the legal correctness of the decisions; a facilitated access to justice for more vulnerable economic actors by means of special financial and procedural conditions. The comparison of the arbitration and judicial dispute resolution mechanism allows us to assess how far in reality the current development towards an in vestment court has advanced. Besides, the research provides a characteristic of the appeal mechanism within the investment court, as one of the most compelling arguments in favor of the proposal. Attention is also paid to the technical aspects in organization of the court. The authors point at issues of compatibility of the proposed court with the EU law (using the CETA provisions as an example).

DISCUSSION AND CONCLUSIONS. The presented discussions lead to the following conclusions. Indeed, the investment court has characteristics that can meet the basic demands for fair, transparent, independent, consistent, more accessible dispute resolution. For this reason the MIC project has the greatest chance of support, as compared to other possible options for the proposed reformation of the investment dispute settlement. However, the introduction of a judicial institution does not mean a complete rejection of the main elements of arbitration, such as the voluntary submission of the parties to the dispute settlement mechanism, the consensual nature of the recognition and execution of judicial / arbitral decisions, the use of time-tested procedural rules. A twotier structure of the investment court is bound to become its most prominent distinguishing feature, given that an appellate mechanism within the court would ensure the correctness of the decisions it should render from the perspectives of the law, fact, justice and due process. Internal scrutiny accompanied by strict rules of appointment and remuneration of judges would significantly strengthen the reliability of that institution. Moreover, the investment court has all the chances to gain popularity thanks to its simplicity of joining via the “opt-in” clause and to greater accessibility. Above all, as a recent opinion of the EU Court of Justice on this issue demonstrated, the introduction of the investment court does not affect the legal order of the Union and its members. In turn, that means that States consider as likely a smooth transition to the settlement of investment disputes within a new system of international justice.

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