Since 2019 the UNCITRAL Working Group III has been discussing the establishment of the Advisory Centre to address the needs of developing states with respect to assistance in investment disputes. In October 2023 and January 2024, the Working Group deliberated on the first iterations of the draft statute establishing the Advisory Centre, which now consists of 16 articles and 5 annexes. While there is still a lot of work to be done to make the Centre alive, we already can have a look on the core pillars of the Centre’s operation contained in the latest draft statute.

1. Membership and Structure

States and regional economic integrations can become Members, which are supposed to be categorised into least developed, developing and other countries. The government of the Centre represent three-tier structure including Governing Committee (representatives of the Members), Executive Committee (6 members in their personal capacity), and Secretariat lead by the Executive Director.    

2. Functions

The activities of the Centre boil down to two main functions: (i) legal advice and support in investment disputes and (ii) technical assistance and capacity-building. Within the first function, the centre is supposed to provide the full range of legal services at every stage of the dispute, from preliminary assessment of the case to representing the Member in the hearing. In accepting this mandate, the centre is supposed to give priority to the least developed Members followed by developing Members. Non-Members can also seek assistance but subject to limitations, including objective of the centre and its resources, conflicts of interest. For such services the centre will charge fees with a sliding scale where the least developed Members should be subject to the lowest fees.

Providing legal services to the developed Members or non-Members may raise concerns as to the objectives of the Centre and, perhaps, should be strictly limited. Otherwise, the centre may end up simply acting as a private law firm, which such states would be willing to engage due to various factors, including amount of fees or conflict of interests.

The second function is of more promotional nature where the Centre is supposed to act as a forum for exchange of ideas, holding seminars, providing trainings, etc.

The Working Group has not decided yet, whether the Centre should render services related to state-to-state disputes. However, such capacity is not explicitly excluded.  

3. Financing

The draft statute provides 3 ways of financing: Members’ contributions, fees for services and voluntary contributions (monetary or in-kind). The current draft provides possibilities for Members’ annual, multi-year or one-time contributions, which should also depend on the status of the Member. Such differentiation implies different rights and obligations for different Members. The financing is definitely one of the most complex parts of Centre’s establishment and will be subject to further crystallization to keep the Centre independent and transparent.

4. Incorporation

While it is a common understanding that the Centre should be established as an intergovernmental organization, the specific way of its establishment is yet to be decided. One of the options is to incorporate it in the UN system, which has its benefits and drawbacks. It is however agreed that the Centre and its employees, property and assets should enjoy immunity from all legal proceedings (unless waived). The draft statute is currently supposed to become an integral part of the multilateral instrument on ISDS reform to avoid the need for the separate international treaty. However, such scenario is doubtful for several reasons. First, such instrument is far from being accepted even in principle, and its adoption may still take years from now and can face resistance from many beneficiaries of current ISDS system. Second, the purpose of the Centre is independent and, perhaps, should not be tied to broader reform. Third, the states and regional economic integrations should have more flexibility in becoming the Members of the Centre while still considering joining to the broader reform.

The next round of deliberations on the Centre’s establishment will take place at the next session of the Working Group III in April 2024.  

The current draft statute is available here.

By Alexey Pirozhkin