SMU SIDRA Survey Report 2020

Exhibit 5.3.1 5.2.5 Consistent with the overall user findings, ‘enforceability’ (Client Users 67% and Legal Users 65%) and ‘impartiality’ (Client Users 47% and Legal Users 54%) were the top two factors that users took into account in the selection of a dispute resolution mechanism for investor-state disputes. Client Users selected ‘transparency of process’ (40%) and ‘flexibility of process’ (27%) and Legal Users selected ‘political sensitivity’ (39%) and ‘transparency of process’ (34%) as their third and fourth main considerations respectively. Only 5% of Legal Users indicated that ‘flexibility of process’ was a main factor. This can be explained by the fact that Legal Users have more familiarity with the procedural complexities of investor-state dispute settlement. With respect to other factors, few users considered ‘speed’ (Client Users 20% and Legal Users 7%) and ‘cost’ (Client Users 7% and Legal Users 12%) as main considerations. The higher percentage of Client Users identifying speed as a relevant consideration (20%) compared to Legal Users (7%) reflects Client Users’ interests in resolving their disputes quickly and getting back to business, whilst Legal Users may have increased awareness of the time required to resolve complex investor-state disputes. 5.3 Improving the Dispute Resolution Process for Investor-State Disputes The chart refers to the respondents who said developments were “Extremely Useful” and “Useful” in improving the dispute resolution process for Investor-State Disputes. Note: This question allows for multiple responses. The sum of the percentages may exceed 100% All Users Dispute resolution by neutral body Investment protection agreement between states Increase pool of experts in investor-state disputes Ability to use hybrid process Appeals mechanism Ability to use mediation Others Inclusion of other stakeholders 77% 75% 73% 52% 51% 47% 40% 16% Improving the Dispute Resolution Process 5.3.1 Even though arbitration remains the dispute resolution mechanism of choice in investor-state disputes, the need for reform in this area is apparent from users’ replies. 77% of the respondents indicated that the creation of a neutral dispute resolution body would be ‘extremely useful’ or ‘useful’. This is in line with current debates on the establishment of a permanent multilateral investment court. 75% of the respondents ranked investment protection agreements between states as an ‘extremely useful’ or ‘useful’ development to improve the dispute resolution process. This may indicate the need to improve the drafting language of bilateral and multilateral investment treaties. Other examples that respondents found ‘extremely useful’ or ‘useful’ included an increased pool of experts in investor-state disputes (73%), the ability to use mediation (52%), the ability to use hybrid processes (47%), and the existence of an appeals mechanism (51%), all of which coincide with recent initiatives to reform international investment law and dispute resolution. SIDRA INTERNATIONAL DISPUTE RESOLUTION SURVEY 23