ICSID Publishes 2022 Annual Report

In early October 2022, ICSID published its 2022 Annual Report (available here). The Annual Report provides an overview of ICSID’s activities during the past year, and discusses ICSID’s 2022 caseload, developments in membership, the emergence of new ICSID rules and the draft Code of Conduct for Adjudicators in International Investment Disputes.

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RISE IN ARBITRATION CASES IN 2020 DESPITE REDUCED VOLUME OF IN PERSON HEARINGS DUE TO CORONAVIRUS PANDEMIC

Most arbitration institutions that have released their statistics for 2020 have reported increased caseloads and/or claim amounts, despite the COVID-19 coronavirus pandemic impacting in person hearings.  The strong demand for arbitration services and the fact that most arbitration institutions were able to move quickly to virtual hearings and avoid costly delays to proceedings establish arbitration as a resilient and reliable choice for commercial dispute resolution.  In this blog post we review both interim and full caseload statistics so far released for 2020.

HKIAC

The Hong Kong International Arbitration Centre broke a number of its own records this year.  With 318 cases, HKIAC received its highest number of new arbitration filings in over a decade.  The total amount in arbitration disputes handled by HKIAC was HK$68.8 billion (approximately US$8.8 billion).  Again, this is a record high since 2011.

203 of the arbitrations filed were administered by HKIAC (under rules such as the HKIAC Administered Arbitration Rules, the UNCITRAL Arbitration Rules and the HKIAC Electronic Transaction Arbitration Rules), representing a 20% year-on-year increase.  The amount in dispute for administered cases was HK$51.3 billion (approximately US$6.6 billion).

There was a small reduction in the proportion of new arbitration filings that were “international” (defined as at least one party not being from Hong Kong).  The proportion of all arbitration cases that were international also recorded a small drop.  The vast majority of cases (99.4%) chose Hong Kong as the seat of arbitration.  Hong Kong law was also the most commonly selected governing law for disputed contracts handled by HKIAC.

In 2020, HKIAC processed 22 applications under the Hong Kong-Mainland China Interim Relief Arrangement (Arrangement), which came into force in October 2019.  The total value of the evidence, assets or conduct sought to be preserved amounted to ¥6.4 billion (approximately US$988 million), of which ¥4.4 billion (approximately US$683.3 million) were successfully preserved.  This is an encouraging number, as it shows in the early days of the Arrangement that there is a realistic chance that assets and evidence sought to be preserved would likely be ordered to be preserved.

Fourteen emergency arbitrator applications were submitted to HKIAC in 2020. This is a large number, particularly given that only twenty-seven emergency arbitrator applications in total had been filed with HKIAC before 2020.  While it appears that 11 of the 14 applications were made in related arbitrations (which likely refer to a series of arbitrations arising from a related set of contracts or arise from the same or similar set of facts), there were still more applications than in past years.  Only three emergency arbitrator applications were filed in 2018, while none were filed in 2019.

The HKIAC granted 24 applications for expedited procedure in 2020, from a total of 28 applications.

There was a clear pivot to virtual hearings in 2020: 80 out of 117 hearings hosted by HKIAC in 2020 were fully or partially virtual, doubtless as a result of the pandemic.  Only 37 hearings were in-person, hosted at the HKIAC’s Hong Kong premises.

Fifty-two HKIAC arbitrations were concluded by Final Award in 2020, while four reached party settlement.

Finally, HKIAC released statistics on diversity of arbitrator appointments.  Of the 149 arbitrator appointments by HKIAC in 2020, 34 were of female arbitrators.  This continues an upward trend from 17.6% in 2018, to 20.5% in 2019 and 22.8% in 2020.

SIAC

The Singapore International Arbitration Centre is expected to report its full case load information later this year, but it has already announced that it had crossed the 1000-case threshold with 1005 new cases in 2020 as of 30 October 2020.  This is another record year for SIAC, breaking the previous record caseload it had reported in 2019.

CIETAC

The China International Economic and Trade Arbitration Commission also saw growth in its caseload in 2020.  A total of 3615 ongoing cases were registered by CIETAC, representing an 8.5% year-on-year growth.

CIETAC reported that it handled disputes amounting in total to ¥112.130 billion (approximately US$17.3 billion).

There was growth not only in the number of cases handled by CIETAC, but also in terms of its international caseload.  In 2020, 739 cases were categorised as “foreign-related cases”, compared to 617 in 2019.  67 of these were cases where both parties were considered “foreign”, which was a record high for CIETAC.  CIETAC made 5213 arbitrator appointments in 2020.

As part of its response to the pandemic, CIETAC also established new virtual hearing centres, handling 819 virtual hearings.  This was an increase of 628 cases that were heard virtually.

ICC

Like HKIAC, the International Chamber of Commerce Court of Arbitration also announced record demand for its arbitration services last year.

ICC reported 946 new arbitration cases in 2020, the highest since 2016.  The majority of the new cases (929 cases) adopted the ICC Rules of Arbitration, while the remaining 17 (which were ad hoc cases) were filed under the ICC Appointing Authority Rules.

LCIA

The London Court of International Arbitration also reported a record breaking 444 cases referred to the institution in 2020, which broke the record caseload LCIA had reported in 2019 by an increase of about 10%.  These results were published on an interim basis and further statistics are expected to be released later this year.

VIAC

The Vienna International Arbitral Centre received 40 new cases in 2020, with the majority of cases involving an Austrian party.  The total amount of disputes handled by VIAC by the end of 2020 was €428 million (approximately US$518 million).

Compared to 2019, where VIAC saw 45 new cases, there was a small drop in the number of new cases received.  However, looking at the statistics for VIAC over the past few years, the number of new cases each year has generally ranged from 40 to 60 cases, so the small drop is likely part of a normal fluctuation over a longer period.

While the number of new cases did not grow, on the diversity front, more than 30% of arbitrators nominated or appointed in VIAC cases were female arbitrators.  This is the highest that VIAC has seen in recent years, and is a highlight for the institution.

DIA

The statistics from the Danish Institute of Arbitration indicate that it is primarily focused on domestic arbitrations, but about one-fifth of its cases were international in nature.  At 28 cases in 2020, DIA’s international caseload was approximately the same as during  the past five years, which ranged from 27 to 33 cases.

SCAI

The Swiss Chambers’ Arbitration Institution reported 83 new arbitration cases in 2020, with 61 being international.  While the number of new cases was not the highest that SCAI has received, it continues an average growth trend over the past decade.

AAA-ICDR

The American Arbitration Association-International Centre for Dispute Resolution reported that it handled 9538 cases in 2020, worth approximately US$18 billion.  This is a slight drop from 9737 cases in 2019, but – notably – an increase in claim amount when compared to the US$15 billion in claims in 2019.  AAA-ICDR also saw an increase from 94 filings for emergency arbitration in 2019 to 111 filings in 2020.

The largest claims, in aggregate, were from the technology sector (US$1.4 billion) followed by financial services, telecommunications and energy (in that order).  This is in contrast to the largest claims in 2019 coming from life sciences (USD 1 billion) followed by construction, real estate and technology.

In terms of changes in caseload by sector, cases related to the cannabis industry saw a 100% increase, the largest rise of any sector (the same industry saw a 225% increase in 2019, which was also the largest sector rise in 2019).

On the diversity front, AAA-ICDR reported 33% of appointments as “diverse appointments” (which refers to gender and ethnic diversity).

Commentary

A majority of arbitration institutions globally reported growth in case load and/or claim amounts in 2020, many of them even breaking their previous records.  This goes to show that arbitration remains a robust dispute resolution mechanism, which has proven its ability to adapt to the highly challenging circumstances of the past year.

It was also a clear side effect of the pandemic that there was a significant shift to virtual hearings.  While users have been slowly moving towards virtual hearings for a number of years, it appears that 2020 will be recognised as the year in which virtual hearings went mainstream, allowing arbitral institutions all over the world to continue to serve the needs of their users.

Simon Chapman
Simon Chapman
Partner
+852 21014217
Rebecca Warder
Rebecca Warder
Professional Support Lawyer
+44 20 7466 3418
Jacob Sin
Jacob Sin
Associate
+852 21014230

AD HOC ARBITRATION ALIVE AND WELL IN LONDON: THE LATEST STATISTICS

Leading arbitral institutions regularly publish their case statistics, meaning there is reasonable visibility for the popularity of institutional arbitration. However, it is more difficult to reliably gauge ad hoc international arbitration trends across all sectors and jurisdictions. It is certainly clear from the new figures recently released by the London Maritime Arbitrators Association (“LMAA”) that London-seated ad hoc arbitration is thriving, and there are a number of other indications that ad hoc arbitration continues to be widely trusted.

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CASELOAD STATISTICS SHOW INCREASING DEMAND FOR ARBITRATION BY MALAYSIAN PARTIES

On 22 October 2019, the Asian International Arbitration Centre (“AIAC“) published its 2018 statistics, showing a steady maintenance of its arbitration caseload. Throughout the years, there has been sustained efforts by the Malaysian government and legal community to promote arbitration as a dispute resolution process of choice for Malaysian parties, with the AIAC largely at the forefront of this endeavour.

In this post, we navigate the trend of Malaysian participation and usage of institutional arbitration based on published statistics of leading arbitral institutions across the world.

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ENFORCING FOREIGN ARBITRAL AWARDS IN RUSSIA: SURVEY FROM THE RUSSIAN ARBITRATION ASSOCIATION

In late November 2018, the Russian Arbitration Association (“RAA”) published a detailed study on the application of the New York Convention in Russia between 2008 and 2017. The Working Group of the RAA analysed 10 consecutive years of case law on the recognition and enforcement of foreign arbitral awards in the Russian courts. The study provides valuable statistical data on the success rates of Russian enforcement proceedings under the New York Convention and uncovers interesting trends for those looking to enforce in the jurisdiction.

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HKIAC 2017 CASE STATISTICS

The HKIAC has recently published its case statistics for 2017, showing a continued healthy demand for its services. The HKIAC saw a 15.7% increase in its caseload compared to 2016, with the total amount in dispute in HKIAC arbitrations doubling since last year. The statistics demonstrate that HKIAC maintains its position as one of the world’s leading arbitral institutions, serving parties throughout Asia and beyond. Continue reading

English Commercial Court releases s68 and s69 statistics: the high hurdle remains

On 29 April 2018, the Judiciary of England and Wales published the Commercial Court Users’ Group Meeting Report – March 2018. Contained within that report are some statistics regarding the number and outcome of arbitration claims within the Commercial Court over the past three years. These statistics make interesting reading, and give pause for thought to any practitioner or party considering bringing a challenge to an English-seated arbitral award. Continue reading

LCIA 2017 Casework Report

The LCIA has recently released its Casework Report for 2017. This report provides an overview of and insights into the LCIA’s caseload. It includes detailed statistics concerning aspects of the caseload with a breakdown by sector, contract type, and time elapsed since the underlying agreement was reached. The Report also looks at arbitrator appointments and the frequency of use of different procedures under the LCIA’s Arbitration Rules (the “Rules”).The statistics show that the institution has had another strong year. Despite a small decrease in referrals from 2016, the overall picture is one of long term growth and a strong international profile. It is also important to note that the LCIA continues to make steady progress its efforts to improve the diversity of arbitrators. The number of female and non-British arbitrators has increased from 2016, albeit at a gradual rate.

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2016 ICC Dispute Resolution Statistics: Record Year for the ICC

The ICC has recently published its full statistical report: the 2016 ICC Dispute Resolution Statistics. This Report demonstrates yet another impressive year of growth for the ICC. In particular, the ICC announced that 966 new cases were filed in 2016. This represents both a record number of cases filed in a single year and an unprecedented growth of 20% from the previous year. Overall, the large caseload numbers, the geographical spread of parties involved and the size of amounts in dispute point towards the ICC maintaining its position amongst the world’s leading arbitration institutions.

We discuss below the key statistics from the Report.

Caseload

While the ICC had previously seen a steady 1%-3% increase in its caseload from 2012 to 2015, it saw a record 20% increase in its caseload in 2016. The chief reason for this growth was attributed by the ICC to continuing expansion in all continents, but with particular emphasis on a surge in cases from North and Central America and from Africa. Interestingly, there was an increase in the number of multi-party cases, with nearly half of new cases involving three or more parties (43%).

Party nationality and places of arbitration

Nearly 80% of the cases filed at the ICC last year were between parties from different countries. These disputes involved 3,099 parties from as many as 137 different jurisdictions. Filings involving parties from the Americas more than doubled, whilst there was a 50% growth in parties from Africa, and a 22% growth in parties from South and East Asia. The number of parties from Central and West Asia returned to pre-2015 levels (2015 statistics having been influenced by a case involving multiple Israeli parties), whilst the number of parties from Europe remained broadly in line with previous years.

Whilst the three most frequent nationalities of parties filing cases in 2016 were the USA, US Virgin Islands and Belize, this development was attributed to an inflow of multiparty cases involving parties from those jurisdictions. Furthermore, given the Virgin Islands and Belize are popular jurisdictions for incorporation of special purpose vehicles, it is possible that those nationalities may not be truly reflective of the nationality of the disputing parties.

The international reach of the ICC was also reflected in the choice of arbitral seats, with ICC arbitrations seated in 106 cities across the world. Interestingly, the number of African cities chosen by the parties as the place for arbitration rose from 2 to 6 (one arbitration in each of Morocco, Nigeria, South Africa, Tanzania, Egypt, and two arbitrations seated in Algeria), although the total number of African-seated cases remains strikingly low (less than 0.01% of the overall new cases filed).

Sector and size of disputes

In 2016, the ICC saw cases arising from the finance and insurance sector grow to match the number of cases relating to the construction and engineering sector, which sector has historically led to the highest percentage of ICC cases.

Equally noteworthy were the amounts in dispute. The ICC reports that, at US$112,259,575, the ICC’s average amount in dispute is higher than the average sums in dispute reported by other institutions. However, it also noted that a significant proportion of the ICC’s caseload involved disputed sums below US$5 million (39%). This is what has led to the ICC introducing an expedited procedure (see our blog post here).

Emergency arbitration

In 2016, 25 applications were made to the ICC for the appointment of an emergency arbitrator.  Six of the applications were granted in full or in part, with the remainder dismissed or withdrawn. The average time to complete the emergency proceedings was 18 days. Whilst in many court systems, a party who could establish requirements of urgency could get interim relief within a shorter period, this timescale is nonetheless impressive and demonstrates the utility of the EA procedure in circumstances in which the parties may not wish to involve the courts. It also underlines the point that the emergency arbitration procedure, a novelty only a few years ago, has now become an established part of the international arbitration landscape.

Investor-state disputes

There were 7 new ICC cases filed in 2016 based on bilateral investment treaties; six related to investments made by Turkish parties in countries in Africa and Central Asia, and the seventh related to a claim by a Spanish investor against a Central American state. The ICC also provided administrative services in an UNCITRAL arbitration brought by Spanish investors against a Latin American state, and has indicated that it will publish a revised framework for its role as appointing authority in ad hoc cases or those under the UNCITRAL Rules.

Arbitrators

  • Nationality

The arbitrators appointed and confirmed to ICC tribunals in 2016 were drawn from 76 different nationalities. There was no change in the six most frequent nationalities appointed or confirmed, with arbitrators from the UK, USA, Switzerland, France, Germany and Brazil being, in that order, the nationalities with the highest percentage of appointments and confirmations.  In terms of region, arbitrators from Europe remain those most frequently appointed, representing 57% of all appointments and confirmations in 2016

  • Gender diversity

A further noticeable development in 2016 was the increase in female arbitrators appointed, from 136 in 2015 to 209 in 2016, representing 15% of all confirmations and appointments last year. In 2016, 41% of appointments of female arbitrators were made by the parties (representing a 62% increase in party appointment of female arbitrators from 2015); 46% were made by the ICC Court; 12% were appointed as president of the tribunal by co-arbitrators; and 1% by another appointing authority. The Equal Representation in Arbitration Pledge, to which the ICC is a signatory, was launched in May 2016. It may therefore be expected to have a more significant impact on the gender diversity statistics in ICC arbitration and other institutional arbitration for 2017, and it is to be hoped that this welcome trend continues.

Awards

The Report also provides information about the awards approved by the ICC Court within 2016. The ICC notes a rise in the number of partial awards, suggesting that this “may reflect an increasing trend to bifurcate proceedings”. The statistics highlight the ICC Court’s role in scrutinising awards, with only 3 out of 479 awards in 2016 approved without any comment at all.  However, there is no data available as to the extent of the scrutiny involved, and in our experience many of the comments submitted to the tribunals in question will relate to format or formality.

The Report does not, however, contain information on the duration of ICC proceedings in total nor the amount of time it has taken ICC tribunals to render an award following the close of proceedings. Moreover, it will be interesting to see whether future Statistical Reports address the practical application of the ICC’s policies of applying discretionary reduction in the tribunal’s fees for a delay in producing awards and reducing the ICC’s own administrative fees for undue delay during the scrutiny process. These policies were introduced in introduced in January and July 2016 respectively (see our blog posts here and here).

Overall, a very strong year indeed for the ICC and one which draws out some interesting trends, particularly in terms of the varying sources of arbitral referrals to the institution.

For more information, please contact Craig Tevendale, Partner, Hannah Ambrose, Professional Support Consultant, Vanessa Naish, Professional Support Consultant, or your usual Herbert Smith Freehills contact.

Craig Tevendale
Craig Tevendale
Partner
+44 207 466 2445
Hannah Ambrose
Hannah Ambrose
Professional Support Consultant
+44 207 466 7585
Vanessa Naish
Vanessa Naish
Professional Support Consultant
+44 207 466 2112