However, international arbitration expert Meriam Al-Rashid of Pinsent Masons, the law firm behind Out-Law.com, described this as "ambitious, to say the least" and said it would would face many challenges.
When the EU took over responsibility for investment issues with the Lisbon Treaty in 2010, there was already a "dense web" of investment protection treaties in Europe, Cecilia Malmström, the EU’s trade commissioner, said in a related blog post.
The basic agreement behind the treaties already in place is sound, Malmström said, but over recent months there have been concerns about dispute settlement between investors and states, she said.
"I have therefore made it one of my priorities to thoroughly modernise the traditional form of ISDS," she said.
ISDS is an arbitration mechanism that allows private investors to sue governments if they believe local laws are threatening their investments.
The traditional ISDS system is "not fit for purpose in the 21st century. I want the rule of law, not the rule of lawyers," Malmström said.
The concept paper laid out potential changes to the system, including a requirement that arbitrators are chosen from a pre-established list put together by parties to an agreement. Arbitrators would be required to hold certain qualifications; for example, to be qualified to hold judicial office in their home jurisdiction, and to have expert knowledge of how to apply international law as contained in the agreement.
Investors may be required to choose between traditional ISDS and the domestic courts at the start of any legal proceedings. This would avoid disputes being litigated first before domestic courts and then before ISDS tribunals.
Another suggestion is that investors waive the right to go to domestic courts once they submit a claim to ISDS.
In the longer term, Malmström said, this sets out work towards the establishment of a permanent investment court.
The concept paper said that:" …the EU should pursue the creation of one permanent court. This court would apply to multiple agreements and between different trading partners, also on the basis of an opt-in system. The objective would be to multilateralise the court either as a self-standing international body or by embedding it into an existing multilateral organisation. Work has already begun on how to start this process, in particular on aspects such as architecture, organisation, costs and participation of other partners."
"Such a prospect will be fraught with challenges – including for example, the relationship such a court will have with the already existing thousands of Bilateral Investment Treaties and how it may impact the party driven process of international dispute resolution," said Al-Rashid.
"These are not ‘off the cuff’ issues to be dealt with only after such a court is created. They must be addressed in advance," she said.