Draft Provisions on An Advisory Centre on International Investment Law concluded by UNCITRAL Working Group III

18 Apr 2024, 28 mins ago

The Forty-eighth session of the United Nations Commission on International Trade Law (UNCITRAL) Working Group III (WG III) on Investor-State Dispute Settlement Reform concluded on 5 April 2024 in New York. In this session, it was noted that the WG III has finished its discussion on the Draft Statute in relation with the establishment of the Advisory Centre.

As a background summary, in 2017 the UNCITRAL entrusted WG III with a broad mandate to work on the possible reform of Investor-State Dispute Settlement (ISDS). So far, WG III has identified and discussed the concerns regarding ISDS and considered concrete elements for the ISDS reform. In 2023, the UNCITRAL encouraged WG III to present its draft provisions in regard to an advisory centre on international investment law for UNCITRAL’s consideration in 2024.

On 8 April 2024, WG III announced the conclusion of its work on the draft statute, which represents another major step towards the Investor-State Dispute Settlement reform. The proposed Advisory Centre aims to provide training, support and assistance with regard to international investment dispute resolution and enhance the capacity of States (in particular, for least developed and developing countries) in preventing and handling international investment disputes. The draft statue of the Centre will be presented to the UNCITRAL for its adoption in July 2024 in New York.

At the time of writing this blog, neither the final draft statute, nor the formal working report has been disclosed to the public. However, the working document that was discussed during the 48th session shows that Articles 1-8 of the draft statute have already been approved by WG III, which means that the provisions in these Articles are unlikely to be deviated from except for minor editorial changes, should there be any.

In summary, Article 1 declares the establishment of the Advisory Centre. Article 2 provides the objectives of the Advisory Centre, which are in line with the announcement on 8 April 2024, and Article 3 lists the general principles of the Advisory Centre, in particular, emphasising its independence from undue external influences, including donors.

Article 4 discusses the membership of the Advisory Centre. Accordingly, both States and regional economic integration organisations may become members. Moreover, states have been divided into three groups: least developed countries, developing countries and others.

Article 5 presents the structure of the Advisory Centre, which consists of a Governing Committee, an Executive Committee and a Secretariat headed by an Executive Director. Each member shall appoint one representative to the Governing Committee, which shall endeavour to make all decisions by consensus or at least four-fifths majority of the Members present and voting. The Executive Committee will consist of six members, and each group shall nominate two members. The Executive Director shall not hold any other employment or engage in any other occupation without the approval of the Executive Committee.

Article 6 provides details of technical assistance that the Advisory Centre shall offer to its Members. Article 7 then illustrates legal advice and support with regard to international investment dispute proceedings that the Advisory Centre shall provide upon request from a Member, including conducting a preliminary assessment of the case, assisting with the selection of arbitrators as well as experts, supporting the preparation of statements and evidence, representing the Member in proceedings, facilitating the appointment of external legal representatives and performing any other functions, as assigned by the Governing Committee. In providing these services, priority will be given to the least developed countries.

Article 8 clarifies that the operation of the Advisory Centre shall be funded by contributions from the Members, fees for services provided by the Advisory Centre and voluntary contributions. This indicates that the services offered by the Advisory Centre, especially those under Article 7, will be chargeable to the Members, though the price list has not yet been disclosed.

Further, WG III has disclosed an informal paper, which is yet to be finalised, containing sample budget figures for setting up and operating the Advisory Centre. Accordingly, it is estimated that an initial funding of USD 5.3 million would be required for the first year. Afterwards, the annual budget of the Advisory Centre would be USD 4.87 million. Costs of the Regional Offices have not been included. Each Member, including those recognised as the least developed countries, will have to contribute annually.

Gherson will continue to follow the discussion regarding the worldwide reform of ISDS.

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