Vietnam endorses European Commission’s Proposal for a Two-Tier Investment Court System in new FTA

On 2 December 2015, the European Commission and Vietnam reached agreement in principle on a Free Trade Agreement (FTA) between the EU and Vietnam.  According to a Commission press release, Vietnam has agreed to an investor-state dispute settlement mechanism based on the Commission’s recently proposed two-tier permanent tribunal structure rather than on the traditional ad hoc arbitration panels with a limited right of review for due process.

The Commission unveiled its two-tier structure 3 months ago (in September 2015) in the context of the TTIP negotiations (see ‘EU unveils proposal for new investment court system for TTIP’).

In keeping with its increased emphasis on transparency, the Commission has promised that the text of the entire agreement will be made public in a matter of weeks, before completion of the ratification process by either state.