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of ISDS which has been in place for decades. The proposal is ambitious and
extends far beyond the CETA, the EU-Vietnam FTA and the TTIP as it is intended

as a model for other agreements containing investor protection provisions.

Therefore, there is a need to examine the main features of this new ICS
in order to assess whether the new system will achieve the goal of strengthening
the legitimacy of ISDS.

B. STRUCTURE OF THE ICS AND ITS FLAWS

(1) Tribunal of First Instance (“Tribunal”)

The unique innovation introduced by the EU is to replace the ad hoc
arbitration system with the ICS, which is divided by a two-tiered permanent

court system : (1) a Tribunal and (2) an Appellate Tribunal. The text of the draft
40
TTIP refers the lower court as the “Tribunal of First Instance” (“Tribunal”)
41
while the CETA and EU-Vietnam FTA refer to as the “Tribunal.” While the
2014 draft of CETA’s ISDS mechanism was based on ad hoc arbitration, the

2016 final text published on 26 February 2016 introduced a newly conceived
a permanent investment court while retaining certain features of arbitration.

(a) Composition of the Tribunal

42
43
The proposed TTIP and CETA provide for the permanent “Judges”
consisting of fifteen judges, five from EU Member States, five from the contracting
State (US/Canada) and five from third countries to hear claims brought by

investors for breach of investment protections standards. The draft TTIP and
EU-Vietnam FTA allow the specialized bilateral Committee established under

the Treaty to increase or decrease the number of Judges by multiples of three. 44

40. Article 9(1) of TTIP.
41. Article 8.27 of the CETA; Article 12 of the EU-Vietnam FTA.
42. Article 9(2) TTIP.
43. Article 8.28(2) of CETA.
44. Article 12(3) of the EU-Vietnam FTA; Article 9 (3) TTIP.

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