EU and Canada Adopt Rules Fleshing Out CETA’s Dispute Settlement Procedure

Arent Fox
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Arent Fox

On January 29, 2021, the EU and Canada adopted four important decisions to ready the novel Investment Court System (ICS) for disputes arising under the EU-Canada Comprehensive Economic and Trade Agreement (CETA).

The decisions establish:

  • Rules for the Appellate Tribunal, bringing it closer to becoming the first functioning appeal mechanism to decide disputes under international investment agreements. More here.
  • A code of conduct for ICS judges. The code seeks to limit certain controversial practices in the Investor-State Dispute Settlement (ISDS) system, such as “double hatting,” by prohibiting former ICS judges from acting as counsel, for a period of three years, in subsequent CETA disputes. More here.
  • Rules for mediation, with the aim of facilitating the early and amicable resolution of ISDS disputes. More here.
  • Rules for binding interpretations by the CETA Joint Committee, designed so that the State Parties can ensure that CETA provisions are interpreted as originally intended. More here.

Why Is This Important?

While the CETA has not yet been ratified by either party, these new procedural mechanisms aim to ensure that, upon ratification, the ICS will be fully functioning. At that time, all eyes will be on the CETA to see how its many innovations hold up in practice.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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