The 2020 QMUL-CCIAG Survey: what it reveals on how investors perceive proposed reforms to the ISDS system




On 29 October 2020, the School of International Arbitration, Centre for Commercial Law Studies, Queen Mary University of London (“QMUL”) released the results of a survey it conducted in collaboration with the Corporate Counsel International Arbitration Group (“CCIAG”) on Investors’ Perception and views of Proposed Reforms to the Investor-State Dispute Settlement (“ISDS”). The survey can be found here: http://www.arbitration.qmul.ac.uk/media/arbitration/docs/QM-CCIAG-Survey-ISDS-2020.pdf.

The study was conducted between 28 November 2019 and 31 December 2019 and comprised two phases: an online questionnaire completed by 86 respondents (quantitative phase) followed by 9 personal interviews (qualitative phase). All respondents represent investors and are either corporate counsel (79%), management representatives or commercial managers (15%).

Representatives from various industry sectors, including energy and electricity (39%), manufacturing (29%), and construction (20%), also took part in the survey.

The aim of the survey was to take stock of how investors view ISDS, and in particular to: (i) evaluate the use and effectiveness of the current ISDS system, (ii) evaluate the impact of potential reforms to the ISDS system, (iii) identify further ways or areas for reform, and (iv) challenge perceptions.

Professor Mistelis presented the results of the survey during the annual European Federation for Investment Law and Arbitration (“EFILA”) lecture, where he was joined by three experienced counsel for a thought-provoking round-table discussion: Mrs Nynke M. Hupkens-Sipma (Director Legal Affairs, Achmea), Mr Victor Orellana Martinelli (Upstream International Negotiator Attorney, Total, S.E.) and Mr Tom Sikora (Corporate Counsel International Arbitration Group (CCIAG).1

This note outlines the most notable results of this survey, in particular with regards to: investors’ overall satisfaction with the existing system, the creation of a multilateral advisory centre, the introduction of a universal code of conduct for arbitrators, changes to the process of arbitrator selection and appointment, the regulation of third party funding, the introduction of an appellate mechanism, the creation of a multilateral investment court, the imposition of mandatory mediation before commencing arbitral proceedings, and the introduction of binding treaty interpretation by States.


State of play

Respondents expressed positive views of ISDS (as it currently stands) as compared to other options such as government to government negotiation, direct negotiation between investors and states, mediation and litigation in the courts of the host states. The survey further confirms that investors do consider, when making their investment decisions, the “additional protection” offered by the dispute settlement mechanism found in investment treaties. Among the respondents, 68% indicated that the availability of ISDS is a decisive factor influencing their investment decisions.

During the EFILA conference, Mrs Nynke M. Hupkens-Sipma (Director Legal Affairs, Achmea) added that legal certainty and the rule of law in the host country are also important factors. She confirmed that bilateral investment agreements remain an important consideration for her company, Dutch insurance giant Achmea, although she noted that the March 2018 decision of the ECJ in the now famous Achmea case, which she described as literally pulling the rug under the feet of investors within the European Union, had made Europe less attractive to investors.


The creation of a multilateral advisory centre

Respondents were first asked how they viewed the creation of a multilateral advisory centre, envisaged as an intergovernmental body with sufficient independence to ensure legitimacy, possibly funded through contributions by member states and user fees where appropriate.

Most of the respondents to the survey indicated that they would support the establishment of such an advisory centre, indicating moreover that they were in favour of its services being open to investors as well as States (75% in both cases).

Most respondents to the survey (56%-72%) indicated that they agreed such an advisory centre could provide pre-dispute technical assistance, capacity building services, help with the drafting of treaties and contracts, sharing experiences and information. A lesser number of respondents (42%) indicated that they also agreed the centre could provide advice on the merits of the claim and on other courses of action (42%). In contrast, only 22% of respondents supported the idea that the centre could be involved in the proceedings, whether for providing representation, help with assembling evidence and preparing evidence, or briefing services on witness and documentary evidence.


Introducing a universal code of conduct for arbitrators

When asked whether the introduction of a universal code of conduct for arbitrators in ISDS would be a welcome development, a sizable portion of respondents (63%) indicated that such a proposal would improve the current ISDS system.

The reform proposal in particular addressed the debate surrounding the practice of double-hatting, in which individuals act simultaneously as arbitrators and legal counsel or as arbitrators and expert witnesses in international investment arbitration. Many have spoken strongly against this practice in the past. During UNCITRAL’s Working Group III on ISDS in 2017, for instance, some States even expressed support for a complete ban on this practice2 The investors responding to this survey however indicated that they were, for the most part, favourable to allowing arbitrators participating in ISDS to act as counsel (67%) or as an expert witness (57%) in other ISDS proceedings. In that regard, during the EFILA conference, Mrs Nynke M. Hupkens-Sipma (Director Legal Affairs, Achmea) stressed the importance of having arbitrators with background knowledge in the expertise area of a particular case, which requires having a diverse pool of arbitrators to pick from.

The survey respondents however nuanced their trust in the practice of double-hatting by overwhelmingly indicating that they would approve the imposition of a duty on arbitrators to disclose the number of their ongoing ISDS appointments, as well as of a limit on the maximum number of ISDS appointments an arbitrator can be involved in at any one time. Most respondents indicated that they would prefer to cap the number of ongoing ISDS appointments to five.


Changes to the process of arbitrator selection and appointment

Respondents to the survey were also asked to rate several reform proposals intended to increase confidence in the impartiality and independence of the system.

Mandatory lists developed by an institution with equal state and investor representation, as well as mandatory arbitrator lists developed by independent institutions were the most favourably rated (45% and 47%, respectively). In contrast, proposals to use mandatory arbitrator lists compiled solely by states and/or have state-nominated permanent judges sitting in a standing international court were quite unpopular (64% and 56%, respectively). Respondents found these proposals would undermine confidence in the independence and impartiality of the ISDS system.

This shows that investors value the ability to choose the decision makers. In fact, a number of interviewees commented that the appointment of arbitrators by the parties was an important feature of ISDS; according to them, if one eliminated that possibility, the system would lose its appeal. On a related note, 42% of the respondents indicated that changes to the selection and appointment of ISDS tribunals would raise their organisation’s risk in countries in which they have investments or are considering investing.


Regulation of third-party funding

A strong majority of respondents (74%) indicated that they considered the use of third-party funding in ISDS should be permitted. Almost three quarters of the respondents further indicated that third party funding should not be limited to impecunious investors, but should be made available to all investors, regardless of the depth of their pockets, as a commercial decision. In that regard, Mr Tom Sikora (Corporate Counsel International Arbitration Group, (CCIAG)) stressed during the EFILA conference discussing the results of the survey that denying third-party funding would raise questions of access to justice as smaller enterprises cannot afford the cost of an ISDS arbitration.

The survey nevertheless indicates a strong consensus amongst the respondents that third party funding should be regulated. In particular, in considering whether the use of third-party funding should be subject to mandatory disclosure by the parties, a majority of respondents thought a party should not be required to disclose either the use of third-party funding (59%) or the identity of the funder (70%).


The introduction of an appellate mechanism

When asked whether an appeals mechanism should be introduced in investment arbitration, Respondents expressed mixed views in response: equal proportions of respondents opposed and supported the introduction of an appellate mechanism (35% in both cases); 24% indicated that they were strongly opposed to it, and 17% were strongly in favour.

Respondents were more aligned when asked what their preferred scope of review would be if an appeal mechanism was to be introduced: a majority of respondents favor the inclusion of a mechanism to review serious procedural irregularity (77%) and manifest errors of law (66%). Less than half of respondents would welcome the review of manifest errors of fact (42%), and only 11% favour the re-hearing of the tribunal’s factual and legal findings.

While the idea of an appellate body in particular draws inspiration from the WTO Appellate Body, respondents have raised concerns that it would not be appropriate to import such a mechanism into the ISDS system. On this point, Mr Victor Orellana Martinelli (Upstream International Negotiator Attorney, Total, S.E.) explained during the EFILA conference that the role of precedent is more problematic within the ISDS system, given that the tribunal is tasked with adjudicating a dispute involving specific parties, treaty, and set of facts for the award.

Some interviewees raised concerns that an appellate mechanism would adversely impact costs and efficiency, opening the door to what could be an endless process for decisions that can already take an average of 5 years (or more) and set-aside and annulment proceedings at the enforcement stage, which would be detrimental for the overall ISDS system. For this reason, there was overall a consensus amongst interviewees that the scope of review on appeal, if introduced, should be strictly defined and limited.

In conclusion, the results demonstrate that discussions bringing investors and States together would be necessary to create an appropriate appellate mechanism for all ISDS stakeholders.


The creation of a multilateral investment court

The survey sought the respondents’ views in response to the proposed creation of a multilateral investment court (the “MIC”), on which would sit full-time judges tasked with hearing investment claims by investors against states. A majority of the respondents (56%) indicated that they do not favour the establishment of a MIC, and 31% indicated that they strongly oppose it. In contrast, only 8% indicated that they would strongly support the creation of a MIC.

Respondents and interviewees raised concerns that the creation of a MIC would likely have an adverse impact upon investors’ recourse to a stable, neutral and open system, negatively affecting the credibility of the ISDS system and investors’ confidence in it. Most interviewees also expressed the concern that the MIC would eliminate the ability of parties to select the arbitrators, which they consider to be one of the most important features of the current ISDS system.

Speaking at the EFILA Conference, Mr Tom Sikora (Corporate Counsel International Arbitration Group, (CCIAG)) outlined five fundamental problems which he said reflect many of the concerns collectively brought forward relating to the creation of a MIC: (i) it would tilt the balance of dispute settlement fundamentally against investors; (ii) it would eliminate party autonomy on the selection and appointment of arbitrators, (iii) it would fundamentally reduce the pool of qualified arbitrators and reduce the effectiveness of the efforts being made to achieve diversity among arbitrators, (iv) it would introduce uncertainty as to enforcement of the arbitral awards rendered by the State-appointed arbitrators sitting on the MIC, which would require the creation of another instrument to provide for the enforceability of such awards, (v) it would introduce uncertainty as to how dispute settlement will be funded and maintained over time, and by whom.

Overall, therefore, the conclusion is that investors prefer to maintain the existing ISDS system with recourse to an ad hoc arbitral tribunal.


Dispute prevention and the use of alternative dispute resolution

The survey respondents were asked whether they would welcome the imposition of a mandatory requirement to go through mediation before commencing arbitration proceedings. Respondents were overall in favour of this proposal (63%).

Interestingly, interviewees indicated that although they view mediation as better suited than formal dispute resolution mechanisms to achieve the parties’ commercial business objectives, recourse to mediation should be voluntary. Investors also expressed an additional concern that the introduction of a mandatory mediation requirement may lead to an increase in unnecessary time and costs.


Binding treaty interpretation by states

Finally, respondents to the survey were asked whether the issuing, by states, of binding treaty wording interpretations to be applied by ISDS arbitrators would affect their confidence in the system. While nearly half of investors (48%) found that the proposal would undermine their confidence in the ISDS system, 38% of respondents indicated that they believe it would increase their confidence in the system.



The QMUL-CCIAG survey indicates that, overall, investors are satisfied with the current ISDS system. While they do see scope for reform in ISDS, they remain positive about the existing system as compared to other dispute resolution systems. Thus, while some may argue that the entire ISDS system needs to be re-thought in its entirety, this survey rather suggests that investors would prefer incremental and all-inclusive changes over aggressive “throw the baby with the bath water” reforms. All in all, this survey provides a valuable check-in on the investors’ perspective which will hopefully be taken into account by States as they continue their discussions on the reform process of ISDS, including in the context of UNCITRAL’s Working Group III on investor-state dispute settlement, which last met in October 2020.3


1 See the 6th Annual EFILA Lecture, Investors Perceptions of ISDS- A Moral Philosophy Approach to ISDS.
Available at: https://efila.org/annual-lecture-2020/ –

2 http://arbitrationblog.kluwerarbitration.com/2019/10/21/uncitral-and-investment-arbitration-reform-a-little-more-action/.

3 See the latest information on the October 2020 summit of the Working Group III in Vienna:





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