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UNCTAD issues annual update on investor-State dispute settlement (ISDS) cases – Message from Mr. James Zhan


UNCTAD issues annual update on investor-State dispute settlement (ISDS) cases – Message from Mr. James Zhan

It is my pleasure to share with you UNCTAD’s IIA Issues Note on the latest developments in investor-State dispute settlement. ISDS continues to be in the spotlight thanks to new developments, such as the European Union’s launch of public consultations on the topic and the recent $5bn settlement between Repsol and Argentina.

The Issues Note provides fully updated statistical data on treaty-based ISDS cases as well as an overview of arbitral decisions issued in 2013. Among the Note’s highlights are:

  • In 2013, investors initiated at least 57 treaty-based disputes. This comes close to the previous year’s record high number of new claims.
  • An unusually high number of cases (almost half of the total) were filed against developed States; most of these have the Member States of the European Union as respondents.
  • Claimants challenged a broad range of government measures, including changes related to investment incentive schemes, alleged breaches of contracts, alleged direct or de facto expropriation, revocation of licenses or permits, regulation of energy tariffs, allegedly wrongful criminal prosecution, land zoning decisions, invalidation of patents, legislation relating to sovereign bonds, and others.
  • Thirteen of the new cases arise from two sets of government measures (regarding renewable energy), adopted by the Czech Republic and Spain. Two cases relate to the Greek financial crisis. Several arbitrations have an environmental dimension.
  • By end of 2013, 98 States have been respondents in a total of 568 known treaty-based cases.
  • The overwhelming majority of cases (85 per cent) have been brought by investors from developed countries. Together, claimants from the EU and the United States account for 75 per cent of all cases.
  • In 2013, ISDS tribunals rendered 37 known decisions, 23 of which are in the public domain, including decisions on jurisdiction, merits, compensation and applications for annulment.
  • In seven out of the eight decisions on the merits, the tribunal accepted – at least in part – the claims of the investors. The award of USD 935 million in the Al-Kharafi v. Libya case ranks as the second highest known award in history.
  • The overall number of concluded cases reached 274. Of these, approximately 43 per cent were decided in favour of the State and 31 per cent in favour of the investor. Approximately 26 per cent of cases were settled.
  • The public discourse about the usefulness and legitimacy of ISDS continues to gain momentum, especially in the context of important IIA negotiations that are currently ongoing.

I hope that you find our  IIA Issues Note on the latest developments in investor-State dispute settlement  useful and interesting – please feel free to also share it with your colleagues!

Let me also use this opportunity to draw your attention to the forthcoming fourth World Investment Forum (WIF), taking place from 13-16 October 2014 in Geneva. The WIF is the pre-eminent platform for high-level and inclusive discourse on investment policies for sustainable development, gathering on average 2,000 participants from 196 countries and convening the full range of investment for development stakeholders.

The WIF’s IIA Conference, scheduled for the morning of Thursday 16 October 2014, will provide an opportunity for IIA negotiators, investment practitioners, legal scholars, and representatives from civil society and the private sector to take stock of 60 years of international investment policy making. The debate will review key challenges and identify ways and means for reforming the regime of IIAs and ISDS so that they better contribute to sustainable development.

I look forward to welcoming you to Geneva in autumn.

James X. Zhan
Investment & Enterprise Division
United Nations Conference on Trade & Development
Palais des Nations, Geneva

Click here to download the report: Recent Developments in Investor-State Dispute Settlement (ISDS)


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