A Multilateral Approach to Investor-State Dispute Settlement Issues in the Asia-Pacific Region

Abstract

Bilateral agreements are not the optimal solution to address modern challenges regarding the resolution of investment disputes. The time has come for multilateral agreements to define a clear procedure for resolving investment disputes and the formation of arbitration for these purposes. On November 15, 2020, ASEAN members and five regional partners signed the Regional Comprehensive Economic Partnership (RCEP), arguably the largest free trade agreement in history. Although the RCEP agreement defines the basic principles of legal protection of investments, it does not contain a procedure for settling disputes directly between investors and parties to the agreement, i.e., Investor-State Dispute Settlement (ISDS), but rather postpones the issue for future negotiations. Nevertheless, a majority of countries understand the importance of investment protection and have significant outward FDI that will support stronger ISDS protections within a multilateral framework. Therefore, it is recommended that in the near future member countries will come to an agreement and adopt appropriate amendments to the RCEP regarding ISDS.