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Dear Members of the World Investment Network,

It is my pleasure to share with you UNCTAD's IIA Issues Note on the latest 
developments in investor-State dispute settlement. Among the Note's 
highlights are: 

In 2012, 62 new cases were initiated, which constitutes the highest number 
of known treaty-based disputes ever filed in one year and confirms that 
foreign investors are increasingly resorting to investor-State 
arbitration.
In 68% of the new cases, respondents are developing or transition 
economies. While the majority of new cases (63%) still originate from 
developed countries, the number of cases initiated by developing country 
investors has increased.
Claimants have challenged a broad range of government measures, including 
those related to revocations of licences, breaches of investment 
contracts, irregularities in public tenders, changes to domestic 
regulatory frameworks, withdrawal of previously granted subsidies, direct 
expropriations of investments, tax measures and others.
At least 42 arbitral decisions were issued in 2012, including decisions on 
objections to tribunal’s jurisdiction, merits of the dispute, compensation 
and applications for annulment of an arbitral award.
In 70% of the public decisions addressing the merits of the dispute, 
investors’ claims were accepted, at least in part. Nine public decisions 
rendered in 2012 awarded damages to the claimant, including the highest 
award in the history of ISDS (US$ 1.77 billion) in Occidental v. Ecuador, 
a case arising out of a unilateral termination by the State of an oil 
contract.
For the first time in treaty-based ISDS proceedings, an arbitral tribunal 
affirmed its jurisdiction over a counterclaim lodged by a respondent State 
against the investor.
The total number of known treaty-based cases reached 518 in 2012, and the 
total number of countries that have responded to one or more such case 
increased to 95.
The overall number of concluded cases reached 244. Of these, approximately 
42% were decided in favour of the State and approximately 31% in favour of 
the investor. Approximately 27% of the cases were settled.
The public discourse about the usefulness and legitimacy of the ISDS 
mechanism is gaining momentum, especially given that the ISDS mechanism is 
on the agenda in numerous bilateral and regional IIA negotiations.
While ISDS reform options abound, their systematic assessment including 
with respect to their feasibility, expected effectiveness and 
implementation methods remains wanting. A multilateral policy dialogue 
could help to develop a consensus about the preferred course for reform 
and ways to put it into action. 
 
I hope that you find our IIA Issues Note useful and interesting - please 
feel free to also share it with your colleagues!
Best regards,
James Zhan
Director
Investment and Enterprise Division
UNCTAD
Palais des Nations, Geneva
Tel:+41229175797
www.unctad.org/diae

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