As the United Nations Commission on International Trade Law (UNCITRAL) Working Group-III prepares to convene its 53rd, 54th and 55th Sessions on the Investor State Dispute Settlement Reform in the coming year, the debate over reforming the Investor-State Dispute Settlement (ISDS) system once again takes centre stage. For the 57-member Organisation of Islamic Cooperation (OIC) — many of them developing nations — the outcome of these discussions could shape the future of foreign investment and sovereignty for decades to come.

The ISDS mechanism, designed to protect foreign investors from unfair treatment by host states, has become a double-edged sword. While it traditionally offers investors a sense of legal certainty, it has also exposed developing nations to unpredictable and often exorbitant compensation claims. As OIC countries participate in the UNCITRAL WG-III discussions, they face the critical challenge of balancing investor protection with economic justice and policy autonomy.

One of the central issues before WG-III concerns limitation periods, i.e. the timeframes within which investors must file claims. Does the statute of limitations pause when parties engage in friendly settlement efforts? If so, when does it resume — upon the conclusion of talks, a formal declaration of failure, or any other trigger?

This legal grey zone creates serious risks. If limitation periods are not suspended during negotiations, parties may feel compelled to abandon settlement talks prematurely to preserve their right to arbitration. Conversely, without clear rules, host........

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