Dear Members of the World Investment
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:
I hope that you find our IIA
Issues Note useful
and interesting - please feel free to also share it with your colleagues!
- 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
- 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
- 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.
Investment and Enterprise
Palais des Nations, Geneva
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