Analysis of ICSID International Investment Disputes

The Center, established in 1966, is part of the World Bank Group specializing in the conciliation and arbitration of international investment disputes. It got off to a slow start, reporting its first case six years later in 1972, and remained relatively inactive until the 1990s.

However, in line with the increase in the rate of ratification of investment treaties over the past three decades, ICSID has experienced a steep increase in its caseload. This confirms that foreign investors are becoming increasingly informed and are also relying on investment treaties to bring arbitration claims against sovereign states to protect their property and other legal rights.

Recently ratified trade and investment treaties are also now being invoked by investors for the first time this year. These include the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, the Mexico-Peru Free Trade Agreement and the Canada-Panama Free Trade Agreement.

Furthermore, with the expansion of third-party funding to finance arbitration claims, the ICSID caseload appears to be on a steeper slope. The success rate and ability to collect substantial damages are undoubtedly also factors in the increase in recent cases.

Remarkably, according to the most recent statistics published by ICSID, the fiscal year ending June 30 was the second busiest in ICSID’s history. Read the latest edition of the ICSID report on caseload statistics Here.

Of the new cases recorded, 28% were in the oil, gas and mining sectors, while another 17% were in the power and energy sectors.

Of the cases decided by the courts this year, in line with historical trends, 53% of the judgments upheld the claims submitted by investors, in part or in full, 36% of the judgments rejected all claims on the merits and 11% of the judgments declined jurisdiction . .

ICSID caseload statistics confirm that, while there will be reforms and improvements in certain aspects of the investor-state dispute settlement system in the coming years, there is an undeniable need for investors and foreign states to be able to settle disputes before a neutral process. , objective and rule-based system. For over five decades, the Center has met this need and will continue to do so in the future. It was instrumental in replacing a system of diplomatic protection where investors had to rely on their home state to assert their claims, also known as gunboat diplomacy. This state-by-state resolution process was usually only available to the largest group of politically influential investors in a given country and also tilted the regulatory process in favor of the dominant economic state.

Listen to this post