Dear Members of the World Investment Network,

I am pleased to share with you our information note on investor-State dispute settlement (ISDS) cases involving the United States (US) or European Union (EU) Member States, or their investors.

Investors' use of and countries' exposure to ISDS cases vary. Understanding patterns of ISDS activity can help achieve best possible solutions when designing dispute settlement mechanisms in negotiations of international investment agreements (IIAs). Below are the highlights:

The IIA networks of the US and of EU Member States are large, but patchy.
·        The US currently has IIA relationships with 57 countries, which cover 21 per cent of US outward FDI stock. The majority of EU Member States as well as large emerging economies are currently not covered by US IIAs.
·        EU Member States have 1,228 IIA relationships with non-EU countries. The number of treaties varies significantly by Member State, with Germany having 114 extra-EU BITs in force while Ireland does not have a single one.
·        BITs are in place between the US and nine "new" EU Member States; they cover one per cent of US FDI stock in the EU and 0.1 per cent of the EU FDI stock in the US.

US and EU investors are active users of the ISDS mechanism, together accounting for 75 per cent of the global number of known ISDS claims.
·        Investors from the "old" EU Member States, including the Netherlands, the UK, Germany, France, Italy and Spain, are claimants in three quarters of all EU claims.

On the defensive side, exposure to ISDS cases varies.
·        16 cases have been initiated against the US to date, among those not a single one originated from an investor from a EU Member State.
·        EU Member States have been respondents in 117 known cases, of which almost a quarter faced by one country (the Czech Republic). Several EU countries (e.g. Austria, Denmark or Finland) have faced no known ISDS claim to date.
·        88 of the 117 cases are intra-EU disputes.

To date, there are few (nine) known claims in the EU-US relationship.
·        All of them were filed by US investors, constituting about seven per cent of all ISDS claims filed by US investors.
·        The nine cases also represent close to eight per cent of all cases faced by EU Member States (or close to one third, if intra-EU disputes are disregarded).
·        All nine cases were brought against “new” EU Member States.

Known disputes relate to all sectors of the economy.
·        They include oil and gas, mining, forestry, agriculture, construction and management of infrastructure, telecommunications, generation and distribution of energy, financial services, tourism, the provision of water, waste management, and media.

A broad range of governmental measures been challenged in these disputes.
·        They include the revocation of licences, direct and indirect expropriations, alleged breaches or unilateral terminations of investment contracts, economic measures taken to combat financial crisis, environmental and public health measures, taxation measures, privatisation-related measures, sectoral economic reforms and conduct of national courts.

The patterns of won and lost cases differ among countries.
·        Of the nine concluded cases where the US was the respondent, the Government has not lost a single case.
·        EU Member States won half of the concluded cases brought against them and settled another quarter.
·        On the offensive side, investors from the US and EU Member States won about a third of the concluded cases and settled another third.

The awards rendered in US and EU ISDS cases vary highly.
·        The lowest known amount awarded by an arbitral tribunal was 0.46 million USD and the highest 1.8 billion USD.

As the underlying IIA regime is undergoing a period of reflection, review and reform, UNCTAD's forthcoming 2014 World Investment Report - to be launched next week - will identify four broad paths that are emerging regarding actions for reforming the international investment regime. The IIA Conference at UNCTAD's World Investment Forum (WIF), scheduled for 13-16 October in Geneva, could provide a platform for discussing them.

I hope that you find our information note useful; please feel free to share it with your colleagues and networks.

With kind regards,


James Zhan
Director, Investment and Enterprise
Palais des Nations, Geneva
Tel:+41229175797 (World Investment Reports)