The International Centre for Settlement of Investment Disputes (“ICSID”) has released case statistics for 2019 and updated their records for cases since 1972 (available here). ICSID has historically administered the majority of investor-state claims and these statistics remain an important bellwether for trends in such disputes. The 2019 statistics show that a lower number of cases were registered this year. There was a dip in cases involving state parties from Eastern Europe and Central Asia, and the highest proportion of cases involved state parties from South America. As in previous years, cases involving the oil and gas, electric power and other energy sectors dominated.

New cases in 2019

39 new cases were registered with ICSID in 2019. 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. This is consistent with historic data from 1972 to 2019 where the largest share of cases (89%) were under the ICSID Convention Arbitration Rules.

ICSID also administered 19 cases where ICSID Rules were not used at all, the majority (13) of these being investor-state arbitrations under the 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 and a further 10% were under investment contracts between the investor and host state.

Geographic distribution of cases

New 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%). Colombia and Spain were state parties in three cases each, while Argentina, Peru, Venezuela, Croatia, Egypt, Morocco and Tanzania were state parties in two cases each.

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.

Economic sectors

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.

Arbitrator appointments in 2019

As in previous years, arbitrators from Western Europe were heavily represented (44%), disproportionately high in comparison to the number of cases involving Western European states (10%). This was followed by arbitrators from North America (22%) and South America (14%).

Only a minority of arbitrators appointed in 2019 were women (19%), but this is a slight improvement on the historic data from 1972 and 2019 where 11% of arbitrators were women.

The ICSID statistics contain a wealth of further data on, amongst other things, the outcomes of arbitrations, the use of the ICSID’s conciliation process and the outcomes of annulment proceedings.

For further information, please contact Andrew Cannon, Partner, Vanessa Naish, Professional Support Consultant, Nihal Joseph, Associate, or your usual Herbert Smith Freehills contact.

Andrew Cannon

Andrew Cannon
Partner
+44 20 7466 2852

Vanessa Naish

Vanessa Naish
Professional Support Consultant
+44 20 7466 2112

Nihal Joseph

Nihal Joseph
Associate
+44 20 7466 2212