ICSID stats show winning streak for investors

[Oscar]

ICSID stats show winning streak for investors

[ http://isds.bilaterals.org/?icsid-stats ... ing-streak ]

Global Arbitration Review | 4 August 2016

by Ali Khan

ICSID’s latest caseload report shows a rise in awards in favour of investors, at a time when investor-state dispute settlement is facing unprecedented criticism for perceived anti-state bias.

The centre’s latest bi-annual statistics [ http://res.cloudinary.com/lbresearch/im ... 16_150.pdf ], published on 31 July, reveal that in fiscal year 2016 states lost more cases in proportional terms than at any time since 2010, when the statistics were first published.

ICSID tribunals upheld 56 per cent of claims and dismissed 24 per cent. In the last fiscal year, tribunals upheld only 47 per cent and dismissed 33 per cent.

The report also shows a shift in the nationalities of arbitrators appointed to hear claims.

Although Western European arbitrators continue to dominate appointments, accounting for 45 per cent in the past year, the statistics show a steady rise of arbitrators from the Asia-Pacific region. Eighteen per cent of arbitrators hearing disputes have hailed from that region, up from 10 per cent in the last fiscal year. This means the Asia-Pacific is now the second-most common region of origin for arbitrators, replacing North America.

In terms of nationality, British arbitrators have been the most common recently, taking the crown from their French counterparts.

But the most significant increase in appointments is for Australian arbitrators, who climbed from 13th spot in the last fiscal year to second place this year, replacing their US arbitrators who fell to sixth place.

In a trend that continues from last year, Western European states remain the most sued at ICSID, mainly due to claims registered against Spain (15 were registered last year [ http://isds.bilaterals.org/?spain-facin ... of&lang=en ], 10 this year). Those claims have been brought under the Energy Charter Treaty and relate to reforms to the country’s solar power sector. Italy has been on the receiving end of four claims and Austria one(e?).

Eastern Europe & Central Asia remains the second most sued regions, while the Middle East and North Africa replaced Sub-Saharan Africa in third place. After being on the receiving end of an unusually low two claims last year, South America has recently seen more. Colombia, Uruguay and Venezuela received one each.

In Asia, Laos was the only state to receive a claim, a casino dispute [ http://isds.bilaterals.org/?lao-holding ... al&lang=en ] brought by a Dutch investor.

In terms of dispute subject matter, the energy sector accounted for the majority of claims (46 per cent). Oil, gas & mining disputes accounted for 20 per cent – another trend which carried over from last year.

While construction, transportation, and information & communication disputes shared the median positions, the tourism and agriculture and fishing and forestry industries accounted for the least number of investment disputes – the same as last year.

Bilateral investment treaties were the basis for the 51 per cent majority of disputes, while ECT claims accounted for 31 per cent.

In total, the ICSID secretariat registered 40 new arbitration cases, one conciliation case, and four cases under the Additional Facility rules. It also administered seven UNCITRAL cases.

The report is published as investor-state dispute settlement faces increasing criticism in South America, the US and Europe, in part because of what Curtis Mallet-Prevost & Mosle partner George Kahale III has called “the perceived bias against states” [ http://globalarbitrationreview.com/arti ... bit-system ] on the part of tribunals.

Defenders of the process have regularly pointed to empirical research, by Washington & Lee Law School professor Susan Franck and others, which indicates that most recent cases have resulted in the investor’s claim being rejected entirely or in part or in settlement. The latest ICSID statistics, though they may be a blip, do not support that.