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EU offers investment court for TTIP

Posted by EUbusiness at 12 November 2015, 23:45 CET |
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One issue in particular has been a thorn in the side of the ongoing talks between the EU and US over the Transatlantic Trade and Investment Partnership (TTIP) - the subject of investment protection and resolution of investment disputes.

TTIP's investor-to-state dispute settlement (ISDS) mechanism - a private system to resolve any possible disputes between investors and countries – was criticised as not having the right balance between protecting investors and safeguarding the EU’s right and ability to regulate in the public interest.

TTIP investor protection would, it was claimed, allow business to sue governments whenever new laws reduced their profits. Some high-profile ongoing cases under existing international agreements raised concerns about the right of governments to legislate, for instance, to protect the environment or consumers, without business challenging them in court.

Euro-MPs gave voice to these concerns earlier this year, saying what was needed was a new system of settling disputes between investors and states that would be run by publicly-appointed judges instead of private arbitration.

This week the Commission gave its answer to the criticism with a proposal for the Investment Court System, “a new and transparent system for resolving disputes between investors and states”.

The new system would be composed of fully qualified judges, proceedings would be transparent, and cases decided on the basis of clear rules. In addition, the Court is to be subject to review by a new Appeal Tribunal. The new system, says the Commission, protects governments' right to regulate, and ensures that investment disputes are adjudicated in full accordance with the rule of law.

We now await the US verdict on a what the Commission terms "a new, modernised system of investment courts, subject to democratic principles and public scrutiny".

US agreement would rekindle hopes that a deal on TTIP can be concluded next year – creating the the world's largest free-trade area, and helping to boost economic growth and create jobs on both sides of the Atlantic.

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Nick Prag

Nick Prag

Nick Prag is founder and managing editor of Prior to EUbusiness, he was senior editor at Europe Online SA in Luxembourg, where he played a major part in the launch of Europe Online International.