16 April 2012
2011 marks a new record with at least 46 new investment arbitration cases initiated against host countries - the highest number of known treaty-based disputes ever filed in one year.
UNCTAD's annual review of investor-State dispute settlement (ISDS) cases, part of the IIA Issues Notes series, provides up-to-date information about ISDS developments in 2011.
2011 saw the highest number of new treaty-based ISDS cases filed under international investment agreements (IIAs) ever. The number of known new cases reached 46, bringing the total of all known cases to 450 at year's end. However, most arbitration forums do not maintain a public registry of claims, so the total number of actual cases could potentially be higher. The total number of countries that have responded to at least one investment treaty claim over the years has increased to 89.
Of the 20 public decisions, 10 were in favour of the investor, 9 in favour of the State and 1 dismissed the applications for annulment. Overall, out of 220 cases concluded by the end of 2011, approximately 40 per cent were decided in favour of the State and approximately 30 per cent, in favour of the investor. Some 30 per cent of the cases were settled.
UNCTAD's Issues Note also offers a brief overview of the most important substantive and procedural issues addressed in the 2011 decisions, including, for example, the interpretation of IIA clauses defining covered investments, the fair and equitable treatment standard or treaty-based emergency exceptions.
The UNCTAD Note concludes that the ISDS system is still in demand, while some of its challenges remain unaddressed: Arbitral tribunals continue to disagree on core IIA clauses, and investors increasingly use IIAs to challenge host States' regulations on key public policies, such as tobacco control, nuclear phase-out or sovereign debt restructuring.
By offering countries a forum to share experiences and best practices on ISDS-related issues, multilateral consensus-building can help devise ways forward in meeting one of the most urgent challenges in international investment policymaking.