Chapter 9 of the TPP relates to investments made by investors from one TPP country into another, and gives investors direct rights against the host country in certain situations. Such rights can be enforced via arbitration (commonly referred to as ISDS). When the text of the TPP was made available on 5 November, a number of features of Chapter 9 became apparent:

1. This is a sophisticated document

The TPP appears to be heavily influenced by the 2012 US Model BIT, which itself drew on investment arbitration case law; and the TPP goes further by adding other points derived from such case law. That can easily be seen by the large number of footnotes in the TPP text. Many of the footnotes relate to particular arguments that have been raised in various investment treaty cases. In places, Chapter 9 reads like a textbook on investment treaty law.

2. There is devil in the detail

As one might expect from a multilateral document covering a wide range of countries, there are a lot of individual points found in the country-specific annexes.  For example, the annexes show that the ISDS provisions do not apply to Australia-New Zealand trade relations. Any company considering bringing a claim under the TPP will therefore have to examine carefully the specific parts of the TPP that apply to its specific investment.

3. Australia has signed up… and opted out

It is noteworthy that while Australia has signed up for the ISDS provisions, it has also opted out in a number of respects, including in relation to urban land, the rights of Indigenous people, agribusiness, some public services, and other matters. (A tobacco opt-out is not on the list of specific opt-outs asserted by Australia in the annexes, but comes as a general opt-out that is available to all countries towards in Chapter 29 of the TPP.) This reflects the various changes of Australian government policy towards ISDS in recent years and the ongoing concerns about ISDS within Australia.

4. The TPP aims to make ISDS transparent

There is a detailed section in the TPP about transparency of any arbitration proceedings, even so far as making transcripts of hearings publicly available. This goes further than the majority of other investment treaties signed to date, and is clearly a response to some of the public criticism that there has been of ISDS.

Inevitably, there will be claims made under this Chapter, once the TPP is ratified; and no matter how sophisticated the drafting, it is likely that some new points, which cannot yet be anticipated, will come to light. We will have to see how this Chapter will operate in practice and how arbitral tribunals will interpret it.

Ben Giaretta is the head of international arbitration (Asia) at Ashurst.