Governments of the world largely do not trust Investor-State Dispute Settlement (ISDS). ISDS is the system by which corporate investors, in a world that is becoming increasingly privatized, gain the right to raise issues for arbitration directly against states without first seeking the aid of their home nation’s government. ISDS provisions are typically inserted into Bilateral Investment Treaties (BITs) between two states, but public outrage at the results from arbitration have states looking to remove ISDS provisions altogether from renegotiated BITs. Recently, Vodafone, a British telecommunications company, was granted a large reward in an ISDS dispute with India, “expos[ing] the serious consequences that the host state can suffer because of the draconian [ISDS] mechanism.” The Indian government is concerned that arbitration matters such as this will encourage government actions in opposition to international law, but it is also widely believed that such disputes as initiated under ISDS intrude on Indian sovereignty. Similarly, in Australia, the belief is that BITs should have no ISDS provisions included going forward. The US-Mexico-Canada Agreement passed with ISDS provisions mostly stripped. The main benefits from the ISDS are visible now, as the provisions help protect companies economically during times of crisis, but that also means that in the near future, states will face great harms from large ISDS claims.
Since 2017, the United Nations Commission on International Trade Law (UNCITRAL) has been working through sessions to discuss several proposals for ISDS reform. Instead of ISDS, the European Union has pushed for a Multilateral Investment Court (MIC). The European Union-Canada trade agreement (CETA) is the first attempt to put a MIC into effect. The European Union-Vietnam trade agreement similarly references MIC implementation. Overall, the European Union is trying to use the court framework to improve transparency and end forum-shopping in arbitration initiatives. This is a “hybrid solution that combines judicial and arbitration-inspired elements.” We have not yet seen the MIC in action, as it is still pending ratification since the initial October 2016 agreement to make it operational. Ultimately, states are not interested in developing the MIC beyond its current status as a basic idea of an appellate court that would require opting-in to resolve disputes.
The original UNCITRAL Working Group III meetings to work on ISDS reform were scheduled for Spring 2020 but later were put on hold due to the Covid-19 pandemic. The meetings were briefly revitalized via webinar sessions during the summer. UNCITRAL finally had its 39th session in October in Vienna, and the MIC still has not gained ground. Nonetheless, the MIC was doomed before the pandemic caused postponements.
Despite the benefits supporters present, the general flaws in this system were too much for most countries to agree, and Covid-19 has now given an opportunity for the idea to fade away. This is especially true as the pandemic has led to increased general concern regarding the existence of any ISDS system. The MIC is a poor alternative system, because it has the combined flaws of the General Agreement on Tariffs and Trade (GATT) before the World Trade Organization (WTO) was founded, the current WTO appellate body, and the maligned ISDS systems all in the basic plan.
Prior to the founding of the WTO, GATT disputes were decided by panels that had to have their reports approved by positive consensus, giving the responding party the ability to veto. The opt-in suggestion in the current proposal for an appellate court shows that the MIC would likely face the same issue of responding parties refusing to participate in disputes. Currently, the WTO’s appellate body is largely defunct due to the United States refusing to approve new appointments, and the WTO seeks consensus on all matters. There is no guarantee that this MIC design involving consensus would not face the same issue of member states refusing to appoint an appellate body. The remedy also fails to account for the greatest flaw of the ISDS – investors can still ask for extensive compensation in damages for lost profits. This is not a question of whether a system that was designed for trade disputes can be applied to the matter of investment. Instead, this is a question of what work nations are willing to do to put together a workable replacement to ISDS.
Nations are not willing to do the work to put forward a real proposal for ISDS reform, as most would prefer to do away with the system altogether. Covid-19 has given nations an excuse not to do the work to present a real alternative, and they will let the pandemic cause the MIC proposal, among other ISDS alternatives, to die. Before the pandemic hit, the MIC already appeared to many to just be a “rebrand” for ISDS in the form of a permanent court. States are not interested in maintaining an ISDS system; only corporations and lawyers who have profited off of its exploitation want to see it continue.
The problem with the ISDS is not the format of the dispute settlement. The problem is that it is designed to give corporations power to go after government policies, and there are no other types of organizations that are given a voice. The permanent court structure could provide transparency that the current ISDS structure lacks, but the suspicions held against investors are too numerous and too substantial for many nations to see this benefit as being worth the risk.
Options remain open for ISDS reform, but the world does not seem prepared to move forward with a single option to resolve disputes, instead preferring to maintain a “menu of possible solutions.” Drafts working papers on the “Appellate mechanism and enforcement issues,” as well as, “Selection and Appointment of ISDS tribunal members” are open for comment until November 15, 2020. Suggestions include making the MIC a complementary body to the current ISDS regime, and it fails to note any of the concerns with investors taking advantage of the system. Any decision that may be reached on the MIC or fate of ISDS reform may be finalized by the UNCITRAL drafters in the coming months and years, but it is unlikely that governments will agree to implement such a plan that ignores the key concerns felt around the world.
 Dispute Settlement-Investor-State,  UNCTAD Series 5, 5-6, UNCTAD/ITE/IIT/30.
 Scott Miller & Gregory N. Hicks, Investor-State Dispute Settlement: A Reality Check, Ctr. for Strategic & Int’l Stud., 1 (Jan. 2015).
 TNN, Biggest Setback for Government in Bilateral Pact, The Times of India, (Sept. 26, 2020, 11:21 AM), https://timesofindia.indiatimes.com/business/india-business/biggest-setback-for-government-in-bilateral-pact/articleshowprint/78329844.cms.
 Prabhash Ranjan, The Perils of State Overreach, The Hindu, (Sept. 30, 2020, 12:15 AM), https://www.thehindu.com/opinion/op-ed/the-perils-of-state-overreach/article32726276.ece.
 Brenda Horrigan, Leon Chung & Chad Catterwell, Australian Government to Review its Bilateral Investment Treaties, Lexology (Sept. 2, 2020), https://www.lexology.com/library/detail.aspx?g=21e91ee6-ff1c-4750-81a6-944d92657bfb.
 Lori Wallach, The US Drops ISDS, The Globalist, (Jan. 24, 2020), https://www.theglobalist.com/united-states-european-union-trade-isds-usmca-uncitral-mic/.
 Sharon Schmidt, Austria: Thoughts on the Legitimacy, Sustainability and Future of ISDS in Times of Crisis, Mondaq, (Sept. 28, 2020), https://www.mondaq.com/austria/operational-impacts-and-strategy/988580/thoughts-on-the-legitimacy-sustainability-and-future-of-isds-in-times-of-crisis?signup=true.
 Wallach, supra note 6.
 Frédéric Simon, EU Plans to Reform Energy Charter Treaty Falling Short, Activists Say, EURACTIV.com, (Apr. 30, 2020), https://www.euractiv.com/section/energy/news/eu-plans-to-reform-energy-charter-treaty-falling-short-activists-say/.
 Commission Presents Procedural Proposals for the Investment Court System in CETA, European Commission, (Oct. 11, 2019), https://trade.ec.europa.eu/doclib/press/index.cfm?id=2070.
 A Future Multilateral Investment Court, European Commission (Dec. 13, 2016), https://ec.europa.eu/commission/presscorner/detail/en/MEMO_16_4350.
 Joanna Lam & Güneş Ünüvar, Transparency and Participatory Aspects of Investor-State Dispute Settlement in the EU ‘New Wave’ Trade Agreements, 32 Leidan J. of Int’l L. 781, 786 (2019).
 Id., at 787.
 European Commission, supra note 10.
 U.N. CITRAL, 39th Sess., at 3 ⁋ 9, U.N. Doc. A/CN.9/WG.III/WP.194 (Jan. 16, 2020).
 Multilateral Instrument on ISDS Reform Webinar – 23 April 2020, U.N. Comm’n on Int’l Trade L., https://uncitral.un.org/en/multilateralinstrumentwebinar
 See Peter Leon, Ernst Müller & Natasha Rachwal, AFCFTA Protocol Must Provide a Fair Regulatory Environment and Protection for Investors, Lexology (Oct. 12, 2020), https://www.lexology.com/library/detail.aspx?g=849f7834-70d1-4ff1-ba23-69ad2fdb8e5d; Mufliha Noor, Government to Resume Discussions on the Reform of ISDS, Tech. Times of Pakistan (Oct. 5, 2020), https://www.technologytimes.pk/2020/10/05/government-to-resume-discussions-on-the-reform-of-isds/.
 See generally Lino Torgal & Cláudia Saavedra Pinto, The Multilateral Investment Court Project: The ‘Judicialization’ of Arbitration?, Lexology (July 24, 2019), https://www.lexology.com/library/detail.aspx?g=318efe3f-e1db-473e-b21b-de423d8109d8.
 See James Bacchus & Jeffrey Sachs, Why We Need a Moratorium on Investment Disputes During COVID-19, The Hill (June 9, 2020, 05:00 PM), https://thehill.com/opinion/international/501872-why-we-need-a-moratorium-on-trade-disputes-during-covid; Jamie Doward, Global Firms Expected to Sue UK for Coronavirus Losses, The Guardian (Aug. 15, 2020, 09:50 AM), https://www.theguardian.com/law/2020/aug/15/global-law-firms-expected-to-sue-uk-for-coronavirus-losses.
 The Process – Stages in a Typical WTO Dispute Settlement Case, World Trade Organization, https://www.wto.org/english/tratop_e/dispu_e/disp_settlement_cbt_e/c6s4p1_e.htm (last visited Oct. 6, 2020).
 Aditya Rathore & Ashutosh Bajpai, The WTO Appellate Body Crisis: How We Got Here and What Lies Ahead?, Jurist, (Apr. 14, 2020, 07:16 PM), https://www.jurist.org/commentary/2020/04/rathore-bajpai-wto-appellate-body-crisis/#:~:text=The%20United%20States%20is%20blocking,the%20Appellate%20Body%20(AB).&text=The%20Obama%20administration%2C%20blocked%20the,failed%20to%20protect%20American%20interests.
 Umair Ghori, Investment Court System or Regional Dispute Settlement: The Uncertain Future of Investor-State Dispute Settlement, 30 Bond L. Rev. 83, 88-89 (2018).
 Wallach, supra note 6.
 Kimberly Ann Elliott, U.S. Trade Deals May Finally Drop Special Protections for Investors, World Politics Review, (Aug. 18, 2020), https://www.worldpoliticsreview.com/articles/28997/u-s-trade-deals-may-finally-drop-special-protections-for-investors.
 Lam, supra note 11, at 800.
 See Leon, Müller & Rachwal, supra note 17.
 Working Group III: Investor-State Dispute Settlement Reform, U.N. Comm’n on Int’l Trade L., https://uncitral.un.org/en/working_groups/3/investor-state (last visited Oct. 6, 2020).
 Possible Reform of Investor-State Dispute Settlement (ISDS) Appellate Mechanism and Enforcement Issues, (U.N. Comm’n on Int’l Trade L., Working Paper A/CN.9/WG.III/WP., 2020).
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