requirement is intended to prevent the investor forum shopping.45 There is also scope for the tribunal to decide as a preliminary question, on an expedited basis, an objection that a claim is manifestly without legal merit.46 This provides a mechanism to strike out frivolous or baseless claims. A related mechanism to discourage frivolous claims is the tribunal’s ability to award costs against the investor if the tribunal finds in favour of the respondent’s objection.47
The investor is also expressed to have the burden of proving all elements of its claim.48 This is unlikely to constitute a change from the position which would have prevailed absent such a provision.
The TPP has improved provisions which ensure both transparency of the arbitral proceedings and that its interpretation is within the control of member States. In respect of the former, the host State is required to provide all of the arbitral documents (including the notice of arbitration, pleadings, transcripts and the award) to the other non-disputing TPP members and to the public,49 and hearings are open to the public. These requirements are subject to provisions for the protection of appropriate confidential information.
As regards its interpretation, the TPP’s provisions enable Parties to maintain some control. A TPP Party who is a party to an arbitration can have the question of whether a measure falls within one of its exceptions to the TPP (under Annex I or II to Chapter 9) determined jointly by the TPP Parties50 rather than the tribunal, which interpretations are binding on the tribunal.51
Finally, there is a commitment by TPP member States to consider, at a later date, both a Code of Conduct for arbitrators to ISDS52 and an appellate review mechanism to correct errors of law53.
3. Conclusion
The worldwide concern that ISDS provisions allow foreign companies to sue governments in respect of laws and policies aimed at safeguarding the environment, health and other sensitive areas, is misdirected. It is not the ISDS mechanism that should be critiqued. Rather, attention should be directed to the substantive investment protections themselves - the nature of the rights which are created and the consequences of those rights.
The TPP aims to protect public welfare by ensuring the investment protections, such as the protection against expropriation discussed in this Chapter, build in those public welfare considerations. They are relevant to the content of the investment protection itself and not just as a possible exception to its application. To this end, the TPP goes some way to balancing the interests of governments and investors by promoting foreign investment while recognising the inherent right of governments to regulate in the public interest.
It remains the case that unless investment protections are backed by ISDS, the alternative, which would allow an investor to seek redress, is litigation in the courts of the State alleged to have breached the treaty. This would severely reduce the value of the protections on offer, particularly for those States with developing economies who have not yet developed a strong rule of law or institutions capable of applying it, particularly against the State. Accordingly, a blanket exclusion of ISDS in international investment agreements is not the answer to the above-mentioned concern.