The Future Of Investor-State Dispute Settlement (ISDS): Reforming A Controversial System
- IJLLR Journal
- 12 minutes ago
- 1 min read
By Aditi Sharma
ABSTRACT
Investor-State Dispute Settlement (ISDS) has long been a flashpoint in international economic law. Designed to provide neutral arbitration for foreign investors against host states, ISDS has evolved into a deeply contested mechanism. Critics argue that it undermines state sovereignty, privileges corporate interests, and lacks transparency, while defenders maintain that it is essential for protecting cross-border investment flows.
This article examines the future of ISDS at a time when reform is no longer optional but inevitable. Drawing on current debates within UNCITRAL and the European Union’s promotion of a Multilateral Investment Court, it explores reform models such as increased transparency, an appellate mechanism, and the balancing of investor rights with state regulatory autonomy. By comparing emerging practices with the traditional arbitration model, the article evaluates whether incremental reforms or a systemic overhaul is necessary.
Ultimately, the future of ISDS will determine not just the security of foreign investments but also the legitimacy of the international investment law regime itself. The debate is not about whether ISDS should change—but how deep and structural that change must be.
