The Multilateral Investment Court (MIC) is a proposed standing judicial body for resolving disputes between foreign investors and host states. It is intended to replace the existing system of investor-state dispute settlement (ISDS), in which disputes are typically heard by ad hoc arbitral tribunals constituted under treaties such as bilateral investment treaties (BITs) or the ICSID Convention.
The initiative has been driven principally by the European Union, which since 2015 has included an "Investment Court System" (ICS) in its trade and investment agreements — notably CETA (EU–Canada, signed 2016), the EU–Vietnam Investment Protection Agreement, and the EU–Singapore Investment Protection Agreement. The ICS provisions in these agreements were designed as a transitional step toward a fully multilateral court.
Negotiations on the MIC are taking place within UNCITRAL Working Group III, which since 2017 has been mandated to consider possible reform of ISDS. Discussions have addressed concerns about the current system, including:
- Lack of consistency in arbitral awards on similar treaty provisions;
- Limited mechanisms for appeal or correction of erroneous decisions;
- Perceived bias and "double-hatting" among arbitrators who also act as counsel;
- High costs and lengthy proceedings;
- Legitimacy concerns about private arbitrators ruling on public policy measures.
Key design questions under negotiation include whether judges would be permanently appointed and full-time, how an appellate mechanism would function, how the court would interact with existing BITs (which number in the thousands), and whether enforcement would rely on the ICSID Convention or the New York Convention on arbitral awards.
Support for the MIC is strongest among EU member states, Canada, and several Latin American governments. The United States has generally been skeptical, and many capital-exporting states prefer incremental reform of ISDS rather than its replacement. As of the mid-2020s, no MIC has been established.
Example
In CETA, signed by the EU and Canada in 2016, the parties agreed to an Investment Court System and committed to work toward establishing a Multilateral Investment Court.
Frequently asked questions
ICSID administers ad hoc tribunals chosen by the disputing parties for each case. The MIC would be a permanent court with tenured judges, standing rosters, and an appellate chamber, more closely resembling a traditional international court.
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