Over the last decades, investor-State disputes have drastically increased in number. Most of these disputes are resolved through arbitration. The increase of the arbitration proceedings in investor-State matters is due to the high number of bilateral investment treaties and free trade agreements (“IIAs”) containing an arbitration clause which the dispute is based on. IIAs do not include only arbitration clauses: they also offer the parties other ways to settle their disputes through negotiation, conciliation and mediation. Research today suggests that conciliation and mediation have been rarely used in investor-State dispute resolution.

The purpose of this article is to investigate the reasons why ADRs are still underused in the settlement of investor-State disputes, by analysing its pros and cons. The author will look into the current international legal instruments dealing with conciliation and meditation in investor-State disputes and will analyse the latest developments in the field. 

The article does not conclude that alternative dispute resolution methods should replace arbitration in investor-State matters: it rather suggests that, depending on the circumstances of the case, conciliation and mediation might be efficient mechanisms to settle disputes, alone or alongside arbitration procedures.