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The International Centre for Settlement of Investment Disputes (ICSID) Caseload Statistics

The International Centre for Settlement of Investment Disputes (“ICSID”) recently released its latest caseload statistics. These provide a comprehensive account of case-related trends until 30 June 2023, as well as data on all ICSID cases since the very first in 1972. The key highlights from the June 2023 caseload statistics are discussed below (note that a number of ICSID’s statistics are given by reference to its fiscal year; where this is so it is denoted by “FY” – ICSID’s FY runs July 1 through June 30).

Caseloads trends in the past decades

As of 30 June 2023, ICSID has registered a total of 933 cases under the ICSID Convention and Additional Facility Rules. 90.5% of these were ICSID Convention cases, 8.1% were ICSID Additional Facility cases, 1.2% were ICSID Convention Conciliation cases, while only 0.2% cases were under ICSID Additional Facility Conciliation Rules. Notably, in the past decade there has been a significant increase in case registration. However, 2022 itself saw a sharp decline in the number of ICSID Convention arbitration cases, with only 41 ICSID Convention cases being registered in 2022 as compared to 66 in 2021. It is yet to be seen if 2023 will buck this trend.

According to the United Nations Commission on Trade and Development (“UNCTAD”), as of April 2023, the total number of registered investor-state dispute settlement (“ISDS”) cases was 1257, indicating that ICSID has been involved in the administration of c.70% of all ISDS cases.

Basis of consent

As in the past, in FY 2023, most cases at ICSID were brought under bilateral investment treaties (“BITs”) (37%). However, this is much reduced from the overall historical trend of 59% of the cases being brought under BITs. 13% cases were brought under the Energy Charter Treaty (“ECT”) in FY 2023 (as opposed to 10% historically). The ECT currently faces withdrawals by member-states on the ground that it affords investment protection to investors in traditional fossil fuel projects, impacting transition to renewable energy.

Interestingly, 12% of the cases in FY 2023 were also brought under the North American Free Trade Agreement (“NAFTA”) this year, against a historic share of c.3%. This may be explained by the fact that NAFTA was terminated, giving rise to a need to bring claims before its sunset period expired. NAFTA is being replaced by the United States Mexico Canada Agreement (“USMCA”) which is seen to have a much more restrictive provision to access ISDS, that Canada has not acceded to at all.

Distribution by region

29 different states were named as respondents in 23 cases registered in FY 2023. Continuing the trend from NAFTA and USCMA, North American countries came in fourth with 11% of the cases (6 cases – 1 against Canada and 5 against Mexico) as opposed to a historic 6%. Further, this seems to have been an interesting year where Central America has moved ahead of Eastern Europe to account for 22% cases (as opposed to a historic 7%). Notably, there were 5 cases against Mexico and 6 against Honduras.

Economic sectors involved

In FY 2023 the economic sectors involved have remained consistent with historic trends. Extractives and energy sectors continued to account for the largest share of cases. 27% percent of cases registered in FY 2023 involved oil and gas, and mining, and 15% related to electric power and other energy sources. These were followed by finance, construction, and transportation, while information and communication, other industries, and water, sanitation and flood protection followed suit with 7% each.

Case outcomes

Settlements

The rate of settlements in FY 2023, at 38% of the registered cases settling, is consistent with the historic trend of settlements at 36%. ICSID in this regard stands marginally apart from ISDS cases in general, wherein in out of 890 concluded cases, 171 have settled, i.e., less than a quarter at 19.21%.

Decisions

On a historical average over past 50 years, the outcome of ICSID cases has been balanced between investors and states. 48% cases have been decided in favour in investors (fully or partly) and 52% in favour of states. This continued in 2022 with 59% of the awards the tribunal upheld the claims in part or full, while in 41% of the awards the tribunal.

Diversity in appointments

Nationality

Continuing with historical trends, arbitrators from Western Europe continued to dominate FY 2023 arbitrator appointments (41%). North America (26%) and South America (17%) follow. In terms of individual nationality USA tops the list with 321 appointments, followed by France and UK with 313 and

SDGs, Targets, and Indicators in the Article

1. Sustainable Development Goal (SDG) 16: Peace, Justice, and Strong Institutions

– Target 16.3: Promote the rule of law at the national and international levels and ensure equal access to justice for all.

– Indicator 16.3.1: Proportion of victims of violence in the previous 12 months who reported their victimization to competent authorities or other officially recognized mechanisms.

2. Sustainable Development Goal (SDG) 7: Affordable and Clean Energy

– Target 7.2: Increase substantially the share of renewable energy in the global energy mix.

– Indicator 7.2.1: Renewable energy share in the total final energy consumption.

3. Sustainable Development Goal (SDG) 9: Industry, Innovation, and Infrastructure

– Target 9.1: Develop quality, reliable, sustainable, and resilient infrastructure, including regional and transborder infrastructure, to support economic development and human well-being, with a focus on affordable and equitable access for all.

– Indicator 9.1.1: Proportion of the rural population who live within 2 km of an all-season road.

Analysis

1. Which SDGs are addressed or connected to the issues highlighted in the article?

The SDGs that are addressed or connected to the issues highlighted in the article are SDG 16 (Peace, Justice, and Strong Institutions), SDG 7 (Affordable and Clean Energy), and SDG 9 (Industry, Innovation, and Infrastructure).

2. What specific targets under those SDGs can be identified based on the article’s content?

Based on the article’s content, the specific targets under the identified SDGs are:

– Target 16.3: Promote the rule of law at the national and international levels and ensure equal access to justice for all.

– Target 7.2: Increase substantially the share of renewable energy in the global energy mix.

– Target 9.1: Develop quality, reliable, sustainable, and resilient infrastructure, including regional and transborder infrastructure, to support economic development and human well-being, with a focus on affordable and equitable access for all.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

Yes, there are indicators mentioned or implied in the article that can be used to measure progress towards the identified targets:

– Indicator 16.3.1: Proportion of victims of violence in the previous 12 months who reported their victimization to competent authorities or other officially recognized mechanisms.

– Indicator 7.2.1: Renewable energy share in the total final energy consumption.

– Indicator 9.1.1: Proportion of the rural population who live within 2 km of an all-season road.

Table: SDGs, Targets, and Indicators

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Source: linklaters.com

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