The EU proposal for investor-State dispute settlement (ISDS) reform introduces a shift from an ad hoc investment arbitration to a permanent court-type adjudication in order to address the legitimacy and rule of law concerns about the current international investment regulation (IIR). This paradigmatic shift at the EU level has been triggered by political controversies within the EU, emerging primarily from public reaction against ISDS. At the same time, the proposal has been shaped by the EU’s own normative and institutional framework, based on the rule of law in which a court plays the central role. In Part III we will explore why old ISDS is ‘dead’ for the EU and what its envisaged replacement in EU external investment relations would be, both bilaterally and multilaterally.