The North American Experience with Investor-State Arbitration: Does It Lead to a Permanent Investment Court?

This paper addresses two related questions: (1) does the experience of the three NAFTA Parties suggest that they would be more comfortable with a court structure replacing arbitration and (2) does this reflect the discomfort of developed democracies with investor-state arbitration (ISA)? To answer these questions the paper examines the experience of the three states Parties to NAFTA Chapter 11, the steps that they have taken over the years to change the procedure or interpretation of Chapter 11, the evolution of their Model BITs, other investment treaty practice and the extent to which they appear to have embraced the European Union’s call for some form of standing foreign investment tribunal to replace investor-state arbitration.