Abstract:
International investment disputes have traditionally been resolved through Investor- State Dispute
Settlement (ISDS) as administered by the International Centre for Settlement of Investment
Disputes(ICSID). Prior to the current discontentment on settlement of investment disputes, foreign
investors were more inclined to ISDS than domestic courts. The system of ISDS offered a neutral
forum for an investor to sue and claim compensation for breach of an investment- related
obligation by the Host State, without immunity obstacles. However, ISDS has faced growing
criticism including, perceived biasness, lack of transparency, exorbitant costs and lengthy duration
spent on arbitration proceedings, unpredictability of awards and erroneous decisions, among
others. In Africa, there is dissatisfaction regarding under-representation of African ADR experts,
regulatory chill, and costly awards that cripple African economies. The UNCITRAL Working
Group III is alive to the criticism around ISDS, and has submitted options of reform to improve
the system of settling investment disputes. This research examines one of the reforms; promoting
ADR methods. It seeks to assess the feasibility of investment mediation, an ADR method, as a
possible alternative to ISDS. The research evaluates the advantages of mediation pointing out that
it is a confidential process that offers a neutral ground for the disputing parties to negotiate and
settle amicably, thus preserving their relationship. Additionally, mediation is time and cost- effective and grants all States, investors and SMEs, access to ISDS. Most importantly, the research
situates mediation within ‘cooling-off’ periods stipulated in International Investment Agreements
and investment regulations. The findings of the study seeks to provide valuable insights into how
investment mediation can be effectively utilized as a possible alternative to ISDS.
