Investment Mediation and Regional Economic Integration Organizations: The European Union and the Central American Integration System in Comparative Perspective

Published date01 December 2016
Date01 December 2016
C R Q, vol. 34, no. 2, Winter 2016 119
© 2016 Association for Confl ict Resolution and Wiley Periodicals, Inc.
Published online in Wiley Online Library ( • DOI: 10.1002/crq.21171
Investment Mediation and Regional Economic
Integration Organizations: The European Union
and the Central American Integration System in
Comparative Perspective
Belen Olmos Giupponi
International investment agreements ( IIAs ) often provide for arbitra-
tion as the main dispute settlement method, but they rarely regulate
mediation. However, this legal landscape is changing rapidly due to
the inclusion of clauses contemplating mediation and the adoption of
specifi c rules by international bodies. Investment mediation is presented
as a complementary tool that avoids the escalation of confl icts and is
more eff ective and less time consuming and causes less disruption to the
investment environment. Against this backdrop, the main aim of this
article is to explore recent developments in investment mediation in
regional economic integration organizations ( REIOs ), focusing on the
European Union ’ s experience.
T raditionally, investment mediation, which is understood as the des-
ignation by the disputing parties of a neutral third party to provide
a negotiated solution to investment disputes, has been considered a mar-
ginal mechanism or tool for the resolution of international investment
disputes.  is is mainly due to the fact that international arbitration has
been the preferred mechanism to resolve investment disputes. Indeed, sev-
eral international investment agreements (IIAs) provide for the constitu-
tion of an arbitral tribunal under diff erent sets of international arbitration
rules and procedures, frequently under the norms adopted in the frame-
work of the International Centre for Settlement of Investment Disputes
(ICSID) and the United Nations Commission on International Trade
C R Q • DOI: 10.1002/crq
Nevertheless, the interest in mediation and other alternative dispute
resolution (ADR) tools, such as conciliation, has grown over the years
in international investment law (Coe 2005). To avoid the escalation of
confl icts, IIAs have encompassed various prevention provisions, includ-
ing diff erent techniques such as negotiation, conciliation, and mediation
(Reisman 2010). In addition, dispute prevention policies (DPPs) would
prevent or effi ciently resolve potential investment disputes.
Recent trends in mediation in international investment law demon-
strate fast-moving modifi cations.  e reasons behind this trend are varied
and complex. One main factor has been the proactive role played by inter-
national arbitral institutions that have developed new rules that enhance
mediation as an ADR method. A clear example are new rules on media-
tion adopted by the International Chamber of Commerce (ICC), in force
since 2014. Another signifi cant element in this evolution is the inclusion
by the European Union (EU) of several clauses on mediation in the area
of common commercial and investment policy. In addition, the recent
questioning of international arbitration, due perhaps to misinformation,
has produced as a positive side eff ect (Morek 2012 ) a renewed interest in
investment mediation. Finally, costs are often considered another advan-
tage that investment mediation would off er over arbitration (Alibekova
and Carrow 2007).
is main aim of this article is to scrutinize the development of these
trends regarding mediation in international investment law.  e article looks
into the diff erent dispute prevention mechanisms that are being promoted
and adopted in the fi eld of the settlement of investment-related disputes.
In analyzing current trends, the article identifi es the main advantages and
drawbacks of including mediation clauses in IIAs and other international
agreements, such as new free trade agreements (FTAs), which also com-
prise investment protection clauses. Against this background, the article
underlines the role played by regional economic integration organizations
(REIOs), primarily the EU. Based on the EU s experience, confl ict preven-
tion and mediation clauses in IIAs, including state-to-state consultations,
are examined.  e article then observes predominant developments in other
REIOs, namely, the Central American System of Integration (SICA), to
assess the impact of REIOs in the diff usion of ADR mechanisms. Analyses
that include this regional comparative perspective are rare. Hence, this article
attempts to fi ll this gap in the literature. Finally, the article presents a critical
refl ection on the state of the art, considering factors that underpin the evolu-
tion and the limitations experienced in the implementation of norms.

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