Brazil’s New Model of Dispute Settlement for Investment: Return to the Past or Alternative for the Future?

This article assesses the contribution of Brazil’s new bilateral treaties on investment, labelled Cooperation and Investment Facilitation Agreements (CIFAs), to the international legal framework for transnational investment. With its CIFAs, nine of which were concluded since 2015, Brazil offers an innovative model of International Investment Agreement (IIA) which does not contain investor-state dispute settlement (ISDS). Instead, CIFAs establish a system that combines dispute prevention mechanisms, creating institutions to ensure continued communication and foster cooperation, and state-to-state arbitration (inspired by dispute settlement provisions common in trade agreements and codified in the World Trade Organization’s Dispute Settlement Understanding). Like recent initiatives put forward by India and the European Union, CIFAs aim not only to regulate bilateral relations but also to positively influence the current debates relating to the reform of the international investment regime. Whether they will become an alternative to the current ISDS-dominated framework will be determined by practice.