Time, Form, and Coalitions: Reflections on the 53rd Session of UNCITRAL Working Group III

The 53rd Session of UNCITRAL Working Group III (WGIII), held in mid-January 2026 in New York, marked one other modest however revealing step within the lengthy highway towards reforming investor–State dispute settlement (ISDS). The assembly delivered some progress, notably in clarifying what sort of authorized instrument(s) may finally emerge from the cluster of partially linked reform choices grouped collectively for dialogue as “procedural and cross-cutting points”. It additionally underscored the rising stress of time, the stress between ambition and deliverables, and the complexity of managing divergent State positions and shifting coalitions. These three themes are deeply interconnected, every shaping and constraining the others. 

The session unfolded amid the fallout from america’ abduction of Venezuelan President Nicolás Maduro, a flagrant violation of worldwide regulation that happened every week earlier. President Trump justified this abduction, at the very least partly, by invoking Venezuela’s earlier expropriation of U.S. oil corporations and its failure to adjust to ISDS awards ordering compensation to these traders. Whereas the usage of abduction as a complement to, or substitute for, ISDS didn’t floor within the Working Group’s formal deliberations, it was a recurring theme in casual discussions within the margins. We return on the finish of this submit to the connection between WGIII’s work and this broader geopolitical context. 

The Strain of Time

The 53rd Session started with a well-known rhythm. WGIII resumed its work on the procedural and cross-cutting points (WP 253 and WP 262), continuing sequentially by means of the Draft Provisions (DPs) from the place it had left off in September 2025. Readers of EJIL: Speak! could recall that WGIII began virtually 9 years in the past by mapping the varied “issues” with ISDS, which had been regularly rationalised into a piece programme organised round a set of potential “reform parts”. Some incremental reforms have now been adopted, notably, a brand new code of conduct for arbitrators in ISDS disputes and a statute for an Advisory Middle on worldwide funding disputes to help growing nations. 

Work on structural reform, such because the EU’s proposal for a standing first-tier multilateral funding court docket and an related appellate mechanism, stays ongoing and would be the focus of the March 2026 session. Against this, the “procedural and cross-cutting points” reform component is a grab-bag of proposals that don’t match neatly elsewhere, starting from modest clarifications to ISDS process — for instance, codifying tribunals’ powers to bifurcate proceedings — to extra far-reaching adjustments, corresponding to requiring exhaustion of native treatments earlier than ISDS could be initiated, limiting oblique shareholder claims, and clarifying the scope of damages that traders could get better for treaty breaches. 

This sequential method gave the work on procedural and cross-cutting points a logical construction, but it surely additionally had essential unwanted side effects. As a result of the doc begins with comparatively technical procedural provisions, many of the week was spent on points that, whereas largely uncontroversial, are of restricted strategic significance. These included guidelines on allocating the prices of ISDS proceedings between the disputing events (DP 9), voluntary consolidation of arbitrations (DP 11), and disclosure of third-party funding (DP 12). This sequencing successfully deferred dialogue of the extra consequential reforms, together with the supply on the evaluation of damages and compensation, to a later date that will by no means materialise . (Disclosure: each authors have argued that reform of damages in ISDS needs to be a precedence for WG III, see, e.g., right here.).

The emphasis on gadgets that might be finalised rapidly additionally mirrored an implicit urgency: a shared sense that one thing should be able to current to the Fee in July 2026. This deadline-driven pragmatism culminated midweek in settlement on the shape that a number of procedural provisions would take, whereas additionally highlighting how time pressures can form outcomes by privileging what is possible over what’s transformative. With only some periods remaining, the chance is now clear: with out inventive scheduling or renewed political momentum, WGIII could full its work on solely a few of the reform parts, falling in need of the deeper reform ambitions that initially animated the method.

Questions of Kind

One of many extra consequential developments of the 53rd Session was the long-deferred choice on how you can construction the draft procedural and cross-cutting provisions. In a course of the place progress is dependent upon attaining consensus amongst collaborating States, questions of kind have an effect on each how provisions are drafted and the way politically acceptable they’re. 

One possibility was to draft the provisions on the conduct of ISDS proceedings as a complement to the UNCITRAL Arbitration Guidelines. Funding treaties usually enable international traders to decide on which set of procedural guidelines will govern an ISDS continuing, and roughly one-third of them go for the UNCITRAL Guidelines. In precept, a brand new complement might be drafted so {that a} reform bundle agreed to in WGIII would apply each time the underlying funding treaty refers back to the present model of the UNCITRAL Arbitration Guidelines (relatively than, as an illustration, the 1976 or 2013 variations), offered the investor chooses UNCITRAL arbitration. This selection would additionally enable for alignment with the ICSID Arbitration Guidelines, which govern roughly 60% of all ISDS instances and had been up to date in 2022 to handle lots of the identical procedural points. Another choice was to draft all of the procedural and cross-cutting provisions as treaty provisions, to be included in a Protocol to the Multilateral Instrument on ISDS Reform (MIIR). Even when adoption by WGIII confers some minimal normative legitimacy on such treaty provisions, they’d solely bind States that change into social gathering each to the MIIR and to the related Protocol containing the treaty provisions in query. 

By midweek, WGIII reached consensus that DPs 1–9, 11, and 12, which tackle the conduct of ISDS proceedings, ought to transfer ahead as a single bundle—an built-in complement to the UNCITRAL Arbitration Guidelines, drafted in treaty language to permit implementation as a Protocol to the MIIR or be utilized in any future multilateral funding court docket. As with the 2013 UNCITRAL Guidelines on Transparency in Treaty-based Investor-State Arbitration, the brand new complement wouldn’t robotically apply to ISDS proceedings arising beneath pre-existing funding treaties, permitting States that oppose it to keep away from its software. Briefly, no State that opposes any of the reforms developed beneath the “procedural and cross-cutting points” heading can be certain by them, whether or not by means of an computerized revision of the UNCITRAL Arbitration Guidelines or by means of their software as treaty provisions in a Protocol to the MIIR.

This dual-track method was a turning level. By bundling the draft provisions on the conduct of ISDS proceedings right into a single bundle, States mapped out a path to current a concrete deliverable to the Fee in July 2026, sidestepping extended debates on optionality and selective adoption, and enabling cross-referencing and coherence within the drafting of the DPs inside the bundle. On the identical time, this decision underscored the more and more modest ambitions of a multilateral course of that many States joined in 2017 out of a need to reform a flawed system. A course of that had began with debates about structural biases inside ISDS is now centered on a doc that largely seeks to align the UNCITRAL Arbitration Guidelines with latest updates to the ICSID Arbitration Guidelines.

Settling questions of kind additionally unblocked negotiations on points that won’t be a part of the complement to the UNCITRAL Arbitration Guidelines. As an example, DP 22 proposes to offer a non-disputing treaty social gathering (usually, the investor’s house State) the fitting to make submissions in ISDS proceedings. This proper is virtually essential as a result of tribunals have typically interpreted funding treaties expansively, properly past what both State social gathering to the treaty supposed. This proper is already mirrored within the 2022 ICSID Arbitration Guidelines, the 2013 UNCITRAL Transparency Guidelines, and plenty of funding treaties. The place a non-disputing treaty social gathering has exercised this proper, it has usually carried out so to help the Respondent State’s interpretation, relatively than to again extra expansive claims superior by its personal traders. 

Among the many many points on WGIII’s agenda, this might need appeared a probable candidate for consensus. But, a number of States—most prominently the Russian Federation, Thailand, and India, all non-ICSID members—signaled that they weren’t ready to be certain by such a rule. As soon as it was agreed that DP 22 would proceed as a treaty rule in an opt-in Protocol to the MIIR, these States may merely stand apart, permitting drafting to proceed. This final result underscored a practical reality of the WGIII: questions of kind can partially depoliticise the method of negotiation by clarifying which commitments will bind which States.

Shifting Coalitions and Negotiation Dynamics

The politics of the 53rd Session revealed the bounds of acquainted narratives about ISDS reform. Lots of the coalitions seen in earlier periods had been nonetheless seen—Latin American States typically intervened in help of one another, calling for extra bold reform; Canada, Japan, Singapore, the UK and the USA tended to stress incremental procedural adjustments; and the EU and its Member States spoke largely with one voice, centered on making certain that the draft provisions remained coherent with their parallel work on a standing first-tier multilateral funding court docket and appellate mechanism. On the identical time, disagreement on a number of points didn’t neatly observe North–South divides or the basic incremental-versus-systemic reform dichotomy. 

For instance, over a few years, India has typically argued inside WGIII for extra sweeping reform. On this session, nevertheless, it strongly opposed DP 22, which offers with submissions by non-disputing treaty events in ISDS. India’s place was rooted in its expertise on the WTO, relatively than in ISDS observe itself and stood in sharp distinction to the U.S. help for the supply, which displays U.S. observe beneath the NAFTA (and now USMCA), and more and more beneath different treaties. 

Debate on DP 10, a provision designed to make it simpler for host States to convey counterclaims in opposition to international traders in ISDS, likewise revealed some shocking bedfellows and divisions. The context to the dialogue is that many States have struggled to convey counterclaims in opposition to investor-claimants—whether or not for environmental hurt, human rights abuses, or extra routine breaches of contractual obligations owed to State entities—as a result of tribunals have typically discovered such counterclaims to fall exterior their jurisdiction or to be insufficiently related to the authorized and factual points underlying the investor’s authentic declare. On this context, Latin American States strongly defended language in DP 10 that referred to traders’ obligations beneath “home regulation” as a sound foundation for State counterclaims. Whereas some States voiced reservations about explicitly referencing home regulation, the Chair famous that any State uncomfortable with bringing counterclaims based mostly on alleged violations of its personal home legal guidelines may merely select to not convey them. 

Regardless of this, Israel and the EU and its Members States expressed sustained objections to retaining an specific reference to home regulation within the textual content. Their concern didn’t look like opposition to counterclaims as such, or to different States bringing domestic-law-based counterclaims in opposition to their traders. Quite, it appears that evidently the EU’s place stems from the constitutional constraint articulated by the CJEU in Komstroy, which limits ISDS tribunals’ skill to interpret or apply EU regulation. The observer from the American Society of Worldwide Legislation reminded delegates that ISDS tribunals usually resolve points by recourse to home regulation—for instance, in figuring out the scope of the investor’s rights that represent the “funding” at challenge in a case, or whether or not the funding in query was made lawfully. However the statement that recourse to home regulation in ISDS is each needed and inevitable was not sufficient to reassure the EU or Israel. 

This disagreement led to a impasse on Tuesday morning. Nonetheless, there was sufficient goodwill to achieve language that everybody may dwell with. The express reference to home regulation was dropped, with the ultimate textual content referring solely to a “legally binding instrument to which the respondent is a celebration” as an illustrative supply of obligation that would kind the idea of a counterclaim. This formulation was understood to advance the target, shared by many growing nations, of constructing counterclaims extra possible in observe, and with out foreclosing the likelihood that counterclaims might be based mostly on home regulation for States that settle for that observe. 

This spirit of pragmatism, nevertheless, stays bounded by time and useful resource shortage. The cumulative impact of those constraints turned most obvious within the week’s closing discussions, when the US delegation introduced that it couldn’t endorse the reallocation of Working Group VI time to permit extra WGIII work in April, successfully closing off one of many few practical choices for catching up on deferred points.

Wanting Forward: The Dangers of the Clock

The 53rd Session reaffirmed that WGIII’s calendar has change into a reform actor in its personal proper. Time pressures now drive sequencing decisions, affect the extent of drafting element, and form perceptions of what qualifies as a deliverable. These pressures additionally create incentives to endorse formally non-binding texts largely to sign progress, a dynamic already seen in debates on the draft toolkit on funding dispute prevention and mitigation.

The dealing with of damages at this Session illustrates how time constraints form the substance of discussions. Nigeria and Viet Nam had tabled a substantive submission on damages (WP 261), and plenty of States arrived in New York prepared to interact with it, particularly after a web based occasion the place three specialists mentioned the proposal with the authors. But the push to finalise the complement to the UNCITRAL Arbitration Guidelines meant that the Working Group had no time to take up that submission. On the identical time, the Guideline on Damages (WP 255) clearly remained on the desk, serving as the main focus of a casual lunch occasion on damages convened by Canada, with the Guideline’s creator in attendance. The 20-page textual content aspires to restate customary worldwide regulation on treatments in ISDS, however is essentially a compendium of present ISDS observe and doesn’t cite a single choice of the Worldwide Court docket of Justice. It additionally seems to include doctrinal errors — some extent flagged by the US delegation on the intersessional assembly in Santiago, which famous that some parts of a declare that an investor is required to determine to get better damages are mischaracterised as “defences” obtainable to a State. A rigorously revised Guideline may nonetheless make a constructive contribution, however beneath present time constraints there’s a actual threat that delegations can be pushed to simply accept an under-scrutinised instrument that successfully endorses lots of the troubling methods by which ISDS tribunals have departed from customary worldwide regulation.

As the method strikes towards the March conferences and the July 2026 Fee Session, the house for genuinely bold reform is narrowing. WGIII’s achievements so far are tangible, however so too are the shadows of what could stay unfinished or be papered over. The 53rd Session thus provided each a measure of progress and a cautionary illustration of how institutional timing, drafting kind, and an unsure internet of partially overlapping issue-based coalitions of States collectively delimit the horizon of ISDS reform.

ISDS Reform in a Lawless World

Lastly, we return to the dissonance famous on the outset of this weblog—the expertise of sitting within the UN constructing on a Wednesday afternoon engaged in contested discussions in regards to the applicable scope of disclosure of third-party funding preparations in ISDS proceedings (DP 12), whereas occasions exterior the room level to a revival of a coercive and imperial politics of international funding. Essentially the most optimistic studying of this dissonance is to see WGIII as pursuing a counter-project: the renewal of a rules-based framework for resolving international funding disputes which may discourage States (and certainly, traders) from abducting international leaders, supporting coups, or partaking in corrupt dealings with native elites to safe their financial pursuits within the alleged absence of dependable home authorized establishments. 

We’re much less optimistic. 

There may be, in fact, the well-documented, imperialist historical past of worldwide funding regulation, the dearth of proof that funding treaties both “depoliticise” international funding disputes or contribute to good governance in any broader sense, and the inescapable proven fact that the existence of ISDS as a dispute-resolution mechanism didn’t forestall america from abducting Maduro. None of that is to defend abduction, corruption, or coups. The purpose is just that it isn’t self-evident that the reforming and re-embedding of ISDS will essentially deter such conduct. 

Extra hanging was the disconnect between the phrases by which varied reform choices had been mentioned and the supposed goals of ISDS as a system — encouraging international funding that improves the lives of individuals in growing nations, supporting good governance and strengthening home authorized establishments, and constructing a world order by which coercive intervention is much less possible. Returning to the dialogue of DP 12, for instance, we heard repeated interventions in regards to the dangers of unfairness to international traders if overly expansive third-party funding disclosure guidelines had been to inadvertently reveal some elements of an investor’s authorized technique in a selected dispute. Throughout the whole week, there was little or no effort to hyperlink these and different essentially technical discussions again to ISDS’s proclaimed functions: fostering financial growth, good governance, and non-coercion in worldwide affairs. Maybe the best tragedy of WGIII is that discussions within the room have change into unmoored from any critical engagement with what these searching for to reform ISDS say that the system is for.