Investment Policy Brief 11, May 2018
The Cooperation and Facilitation Investment Agreement (CFIA) in the context of the discussions on the reform of the ISDS system
The Brazilian Cooperation and Facilitation Investment Agreement (CFIA) model establishes an alternative approach to dispute resolution. This does not mean, however, that the CFIA is silent with regards to possible disputes arising from breaches to the agreement and/or claims by investors. Based on the premise that the investment regime between two or more countries is a positive-sum game, in which all parties involved win, the CFIA presents an approach based on the prevention of disputes.
The present brief aims at explaining how the Brazilian model can contribute to the discussions on the reform of the investor-State dispute settlement mechanism (ISDS) system, or of dispute resolution in International Investment Agreements (IIAs) as a whole. The CFIA is, to a great extent, a response to what the Brazilian Parliament interpreted as the shortcomings of the traditional bilateral investment treaty (BIT) models. The first part of the text will examine the context of the discussions that prevented Brazil from ratifying the few BITs signed in the 1990s and the conjectural changes that led to the elaboration of an alternative IIA model. The second part will detail the emphasis on prevention of disputes that is inherent to the CFIA. In its third part, the present text will explain the specific provisions of the CFIA regarding the settlement of disputes at the State-to-State level (SSDS).
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This article was tagged: Bilateral Investment Treaties (BITs), Investment Agreement, Investment Policy Briefs, Investor-State Dispute Settlement (ISDS) System