The International Center for Settlement of Investment Disputes (ICSID) is the world leading institution devoted to international investment dispute settlement under the ICSID Convention. More than 160 countries across the globe are contracting states to the ICSID Convention.

ICSID offers services for the resolution of international disputes, primarily between investors and Sates, but also in State-to-State disputes. In addition, it offers fact-finding proceedings to examine and report on facts before a dispute arises. Its case administration services extend to: Arbitrations under the ICSID Convention; Arbitrations under the Additional Facility; Conciliations under the ICSID Convention; Conciliations under the Additional Facility; Fact-Finding Proceedings; Non-ICSID investor-State Arbitrations (for example under the UNCITRAL Arbitration Rules) and non-ICSID State-State disputes (for example under free trade agreements); Mediations and other alternative dispute resolution mechanisms.

Although Vietnam is not a contracting state to the ICSID Convention yet, it is still very relevant to Vietnamese parties because it provides additional facility rules for the dispute between the contracting party and non-contracting party. One Investor-State Dispute Settlement (ISDS) case has been brought against Vietnam under this additional facility rule.

Recently, the ICSID released the 2019 ICSID case statistics. A detailed analysis of this paper is as follow:

  1. Overview

In 2019, 39 new cases were registered with ICSID. This is lower than the cases registered in each of the last four years (on average about 54), but it remains to be seen whether this indicates any kind of more general decline. Indeed, in 2018, ICSID registered its highest number of cases (56) and investor and public awareness of ISDS continues to grow.

Of the 39 cases, 35 were arbitrations registered under the ICSID Convention Arbitration Rules, three were arbitrations under the ICSID Arbitration (Additional Facility) Rules, and one case was under the ICSID Convention Conciliation Rules.

ICSID also administered 19 cases where ICSID Rules were not used at all, the majority (13) of these being investor-state arbitrations under UNCITRAL Rules.

As in previous years, the majority of cases (62%) were brought under bilateral investment treaties, 12% were brought under the Energy Charter Treaty, 10% were under investment contracts between the investor and host state and the remain were under bilateral or multilateral Free Trade Agreement or Investment Agreement or local investment law.

  1. Distribution of ICSID cases by State Party involved and Economic Sector

With regards to the geographic distribution of all ICSID cases in 2019, mainly involved state parties from South America (26%), the Middle East and North Africa (18%) and Eastern Europe and Central Asia (16%).

Between 2015 and 2018, of the regional classifications produced by ICSID, the highest proportion of state parties were from Eastern Europe and Central Asia (on average 31%) whilst South America represented the second highest proportion of cases (on average 19%).  In 2019, there was a decrease in the proportion of cases involving state parties from Eastern Europe and Central Asia and an increase of state parties involving South America compared to previous years.

Cases from the oil and gas (26%) and electric power and other Energy sectors (26%) made up most of the new cases instituted in 2019, followed by the construction sector (15%). This is consistent with ICSID’s historic statistics, where the oil and gas and energy sectors dominate, representing 24% and 17% respectively of all cases from 1972 to 2019.

According to the statistics, oil, gas and mining as well as electric power and other energy are the key economic sectors that have driven disputes; indeed, they are the main growth sectors and thus conflicts are more likely to arise from those industries.

  1. Outcomes of ICSID Arbitration Proceeding concluded

Under the ICSID Convention and Additional Facility Rules, the majority of the cases were decided by the Tribunal (78%) while the rest were settled or discontinued.

For those which were decided by the Tribunal, 55% resulted in awards upholding claims in part or in full, 31% in awards dismissing all claims and 14 % were declined jurisdiction.

For those which were discontinued, the majority (68%) was based on the request of both parties and the others were based on the request of one party or the lack of required advance payment.

  1. Distribution of Arbitrators, Conciliators and ad hoc Committee Members Appointment

As in previous years, arbitrators from Western Europe (France, UK, Germany, etc) are heavily represented (44%). This was followed by arbitrators from North America (22%) and South America (14%). Arbitrators from France, the United States of America and the United Kingdom were the most appointed in 2019.

This homogeneity of ICSID arbitrators reveals a lack of plurality in understanding the legal and cultural diversities of developing host states. The very operational narratives of ICSID arbitrators inculcate an inherent bias towards foreign investors, who are overwhelmingly from European and North American countries.

Concerning the representation of women in arbitration, it is still very low, only 19% of arbitrators appointed in cases were women.

Analyzing the figures

According to the ICSID caseload statistics, the number of cases involving States from the South and East Asia and the Pacific has remain stable.

That said, a number of considerations points to an increase of investor-State arbitration in the region.
First of all, Asian countries are playing an increasingly significant role in the development of ISDS law and policy. This is, to a large extent, due to Asia’s rising global economic prominence. Foreign direct investments (FDI) are increasing in the region, hitting historic highs. This led to significant reforms on traditional bilateral investment treaties (BITs) to agreements proposing their own specific provisions. Asian states have concluded agreements with procedures for contracting states to issue joint interpretations of treaty provisions.
As investor-State cases have started to be brought by investors from South East Asia, local lawyers are acquiring the knowledge and expertise necessary to handle the complex issues of such cases. As the knowledge of the legal profession grows, it is expected that the investment arbitration mechanism will become a concrete option for the resolution of investor-State dispute.


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