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This paper argues that the current criticisms of Investor-State Dispute Settlement (ISDS) are ill-informed, and attempts at reforming the system are misguided. The definition of ISDS itself has been, for a long time, limited to investment quasi-judicial bodies or at best arbitration. Analysis of the roots of the ever growing backlash reveals that the main causes for concern are politically negotiated investment treaties, an inherently biased system, lack of transparency, and inconsistent decision-making. Examination of the core reasons behind these complaints leads to the conclusion that the EU Commission’s solution to reform ISDS through a permanent court raises more issues and will throw ISDS into disarray. A better approach is to accept the premise that the current system needs improvement. However, accepting this premise requires regulating disputes themselves, rather than simply regulating the resolution of cases, and establishing standards when unable to regulate these. The regulation of disputes would allow the work already begun by UNCITRAL through its notes on transparency to continue. This study will review how introducing mediation to regulate the process of Investor State Disputes (ISD) can improve and indeed complement the procedural gap evident in the current ISDS system. In particular, while considering more recent investment regimes, it will use the current effort by the Energy Charter Treaty Secretariat to facilitate mediation within the Treaty as an example of how this can be done.


A previous version of this article was incorrectly attributed to Monde Marshall