International arbitration News, analytics and practice

11Jul/130

Investor–State arbitration: highest number of new cases ever. $8 million spent on lawyers and arbitrators in an average case

World Investment ReportIn 2012, 58 new known investor–State dispute settlement (ISDS) cases were initiated (stated in the 2013 World Investment Report by UNCTAD). This brings the total number of known cases to 514 and the total number of countries that have responded to one or more ISDS cases to 95. The 58 cases constitute the highest number of known ISDS claims ever filed in one year and confirm foreign investors’ increased inclination to resort to investor–State arbitration.

In light of the increasing number of ISDS cases and persistent concerns about the ISDS system’s deficiencies, the debate about the pros and cons of the ISDS mechanism has gained momentum, especially in those countries and regions where ISDS is on the agenda of international investment agreements (IIA) negotiations.

The functioning of ISDS has revealed systemic deficiencies. Concerns relate to legitimacy, transparency, lack of consistency and erroneous decisions, the system for arbitrator appointment and financial stakes.

As a response, UNCTAD has identified five broad paths for reform: promoting alternative dispute resolution, modifying the existing ISDS system through individual IIAs, limiting investors’ access to ISDS, introducing an appeals facility and creating a standing international investment court.

The 2013 World Investment Report is available on the UNCTAD website.

International Arbitration Team

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