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50 new cases for the International Center for Settlement of Investment Disputes at 50

50 new cases for ICSID at 50

Lacey Yong • Friday, 16 October 2015 (6 hours ago)

In its 50th year, ICSID has for the first time registered more than 50 new cases in a year, bringing the total number of cases that have been registered at the centre to 525.

Arbitrators Pedro Nikken, Gabrielle Kaufmann-Kohler, and Jeswald Salacuse arrive for an ICSID hearing at the World Bank in Washington, DC, on 6 August 2014 (Credit: Benjamin Garel, World Bank)

Most of the new cases are against states in Europe, with Latin American states now trailing behind.

In its annual report, ICSID said that it registered 52 new cases in the 2015 fiscal year (1 July 2014 to 30 June 2015), a 30 per cent increase from 2014. The institution administered a total of 243 cases over the course of the year, breaking its previous record by 34 cases.

ICSID also concluded the greatest number of proceedings in its history, with 53 cases coming to an end. Of those, 38 were arbitrations and 14 were post-award proceedings.

Of the 38 arbitrations, 56 per cent (22 cases) were decided by a tribunal while the remaining 44 per cent were settled or discontinued.

Notably, of the 22 cases that were determined by a tribunal, only 46 per cent (10 cases) partly upheld the investors’ claim. Eight tribunals rejected all investors’ claims and four declined jurisdiction.

According to an article written by Hannah Ambrose, professional support consultant at Herbert Smith Freehills in London, these statistics indicate that “ICSID tribunals decide in favour of investors in a far lower percentage of cases than detractors of the investor-state dispute resolution system suggest.”

The majority of the 52 new cases were brought under bilateral investment treaties (33 cases) with the second-most popular basis for establishing jurisdiction being the Energy Charter Treaty (in 14 – or 22 per cent – of the new cases). This reflects the continued filing of solar energy claims against Spain, as well as some other European states such as Italy and the Czech Republic.

The prevalence of those ECT claims also affected the geographic data, making Europe the area of the world subject to the most new ICSID claims.

While 33 per cent were registered against states in Eastern Europe and Central Asia – including the first-ever claim against Kosovo – Western European states were subject to the second-highest number of new claims (21 per cent) with 10 registered against Spain and one against Greece.

The other marked trend in the geographic data is the decreasing number of cases involving South America. Only 4 per cent of ICSID cases were brought against states in that region in the 2015 fiscal year, representing a 3 per cent decrease from 2014. This is also an all-time low compared to the historical average of 25 per cent.

In her commentary, Ambrose suggests that a “period of comparative financial and political stability in South America” may have contributed to this trend.

Meanwhile, cases against states in Sub-Saharan Africa have remained steady, accounting for roughly 20 per cent of the caseload. Cape Verde, Mauritania, Mozambique and Timor Leste have all faced their first claims.

The report also features statistics on which industries have given rise to ICSID claims. Of the 52 new claims filed, 31 per cent were over electric power and other energy. Twenty-seven per cent concerned oil, gas and mining, while the remainder arose from a range of industries including construction, finance, and information.

The year saw 135 appointments of arbitrators, conciliators, and ad hoc committee members. Of these appointments, the overwhelming majority were nationals of Western Europe or North America, most commonly France (21), US (11), United Kingdom (8), Canada (8) and Germany (7).

Only roughly 20 per cent of appointees were nationals of developing countries, highlighting a dearth of diversity addressed in a recent speech by the Somalian vice-president of the International Court of Justice, Abdulqawi Ahmed Yusuf, who argued that there should be more African arbitrators on tribunals hearing cases relating to Africa.

But things may improve, as the report says ICSID had 77 new designations to the ICSID panels from 19 member states. This gives it a wider range of candidates to choose from when parties fail to appoint their own arbitrators or to serve on ad hoc annulment committees.

Another troubling trend is the relative absence of women from the tribunals. Only 16 per cent of the arbitrators, conciliators and ad hoc committee members appointed in the 2015 fiscal year were women. While this figure represents a nearly 50 per cent increase from 2014, Ambrose notes that “much remains to be done.”

Campaigns such as GQUAL, a campaign for gender parity in international tribunals and monitoring bodies, are a “welcome development” that seeks to redress the balance, she says.

The ICSID Convention was opened for signature on 18 March 1965, with Tunisia becoming the first state to sign, followed by the UK. The first state to ratify the convention was Nigeria on 23 August 1965.

By 14 September 1966, the necessary 20 ratifications had been achieved and the convention came into force a month later. Today, the convention has been ratified by 151 states and signed by a further eight. San Marino was the last to ratify it during the 2015 fiscal year.

ICSID marked its 50th anniversary with a conference in Washington, DC, in February, held in conjunction with the International Bar Association’s arbitration committee.