The ICSID Caseload Statistics have now been updated with new data for the fiscal year 2023 (“FY2023”) to capture statistics drawn from cases registered under the ICSID Convention, the Additional Facility Rules and other ICSID-administered cases between 1 July 2022 and 30 June 2023.
The International Centre for Settlement of Investment Disputes (“ICSID”) was established in 1966 by the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (the “ICSID Convention”) as a means of furthering the World Bank’s objective of promoting international investment through the provision of a neutral and reliable forum for the resolution of disputes between foreign investors and States. To date, the ICSID Convention counts 158 Contracting States and seven signatory States, bringing the total number of ICSID Member States to 165.
FY2023 Caseload and Outcomes
In FY2023, 40 new ICSID Convention arbitration cases and 5 Additional Facility arbitration cases were registered by the ICSID Secretariat. 16 Investor-State UNCITRAL arbitrations and 6 other cases under different rules of procedure were registered for administration by the ICSID Secretariat, a modest increase when compared with previous fiscal years.
The outcomes of ICSID Arbitrations concluded in FY2023 revealed that 62% of cases were decided by an arbitral tribunal, whereas 38% of cases were settled or otherwise discontinued. Of the 62% of cases decided by an arbitral tribunal in FY2023, 59% of awards rendered in FY2023 upheld the investors’ claims in whole or in part, 24% dismissed the claims in full, 14% declined jurisdiction and 3% of the awards held the claims asserted to be manifestly without legal merit.
FY2023 Basis of Consent Invoked to Establish ICSID Jurisdiction
The most common basis of consent invoked by parties to establish ICSID jurisdiction both for cases registered under the ICSID Convention and those proceeding under the Additional Facility in FY2023 remains an applicable Bilateral Investment Treaty (“BIT”). Such BIT claims represent 37% of FY2023 registered cases. The next most common treaties invoked were the Energy Charter Treaty (13%), and NAFTA and USMCA (both 12%).
The remaining 24% of cases were brought pursuant to contracts, national investment laws, CAFTA-DR, the ASEAN-China Investment Agreement, the Canada-Peru Free Trade Agreement, and the Mexico, Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua Free Trade Agreement.
The FY2023 Caseload Statistics reveal a proportional decrease in BIT-based cases (60% in FY2022), and a proportional increase in ECT-based cases (9% in FY2022) and NAFTA-based cases (4% in FY2022).
Geographic Distribution (by State Party involved) and Economic Sector Distribution for FY2023
The region in which the largest proportion of ICSID Cases were registered in FY2023 was the Central America & the Caribbean region (22%), followed by the Eastern Europe & Central Asia region (18%), South America (13%), and North America (13%).
The most frequently implicated economic sectors featuring in FY2023-registered cases remain Oil, Gas & Mining (27%), and Electric Power & Other Energy (15%).
Comment
The continued popularity of ICSID as a forum for the settlement of investor-state disputes is reflected in the 45 new ICSID and Additional Facility cases registered in FY2023, as well as by the 16 new investor-state UNCITRAL arbitrations and 6 other cases registered for administration by the ICSID Secretariat in FY2023.
It is nonetheless interesting to observe the high number of new cases registered involving Respondent States in the Central America & Caribbean region, where 6 of the 10 ICSID cases registered in FY2023 involved Honduras.[1] In an apparent response to this earlier in the year, the Honduran government announced that it was considering withdrawing from ICSID, having ratified the Convention in 1989. If Honduras does indeed withdraw from the ICSID Convention, it would follow Bolivia (the first State to withdraw from the ICSID Convention in 2007), Ecuador (2009), and Venezuela (2012).
Similarly, the statistics for the North America region show that 5 of the 6 ICSID cases registered in FY2023 were cases in which Mexico is the Respondent State. All of the new cases involving Mexico registered in FY2023 relate to NAFTA/USMCA[2], and one additional case in which Mexico is the Respondent State was brought within FY2023 under the UNCITRAL Rules (with the ICSID Secretariat acting as the administrating body) also relates to these treaties.[3]
The increase in NAFTA-based cases being registered in FY2023 should be viewed against the termination of NAFTA and its replacement by USMCA on 1 July 2020: USMCA created a three-year sunset period during which legacy NAFTA claims (for investments made prior to 1 July 2020) could be brought under the former treaty. This is to give effect to covered investors’ legitimate expectations and to ease the transition from NAFTA to USMCA. The NAFTA sunset period ended on 1 July 2023 (pursuant to the requirement for a 90-day notification period, legacy NAFTA claims had to be notified by 1 April 2023). Given this sunset period, it is likely that the rise in NAFTA cases in FY2023 can be attributed to the ending of the NAFTA sunset period.
The FY2023 ICSID Caseload Statistics also show a continued gender diversity gap in arbitrator appointments, with women making up only 22% of arbitrator appointments in ICSID cases in FY2023 (bringing the total proportion across all ICSID cases to 14%). Some of the arbitrator appointments are made by ICSID (as opposed to by the parties or co-arbitrators). 42% of such appointees were women. Statistics showing the nationalities of arbitrators appointed in FY2023 also reveal that more remains to be done to make proceedings more representative of the world community which ICSID serves.
Conclusion
ICSID registered its first case in 1972.[4] To date, ICSID has registered a total of 970 cases.[5] A salutary reminder from Aron Broches, one of ICSID’s foremost architects, comes to mind:
“…the success of the Centre should not be measured by the number of disputes submitted to it, but rather by the degree of willingness of governments and investors to accept conciliation and arbitration under the auspices of the Centre.”[6]
This is undoubtedly the truer measure of ICSID’s success (bringing to mind the handful of State withdrawals from the Convention, and wider debates about reform of the ISDS system, and the need for greater diversity in arbitrator appointments). It is nonetheless important to acknowledge the FY2023 Caseload Statistics, and ICSID’s total registered cases, as indicative of the institution’s continued important role as offering a reliable means of dispute settlement to both investors and States.
[1] Honduras Próspera Inc., St. John’s Bay Development Company LLC, and Próspera Arbitration Center LLC v. Republic of Honduras (ICSID Case No. ARB/23/2); JLL Capital, S.A.P.I. de C.V. v. Republic of Honduras (ICSID Case No. ARB/23/3); Autopistas del Atlántico, S.A. de C.V. and others v. Republic of Honduras (ICSID Case No. ARB/23/10); Scatec ASA v. Republic of Honduras (ICSID Case No. ARB/23/12); Norfund and KLP Norfund Investments AS v. Republic of Honduras (ICSID Case No. ARB/23/13); Juan Carlos Arguello and Ernesto Arguello v. Republic of Honduras (ICSID Case No. ARB/23/17).
[2] Doups Holdings LLC v. United Mexican States (ICSID Case No. ARB/22/24); Goldgroup Resources, Inc. v. United Mexican States (ICSID Case No. ARB/23/4); Sepadeve International LLC v. United Mexican States (ICSID Case No. ARB/23/6); Access Business Group LLC v. United Mexican States (ICSID Case No. ARB/23/15); Enerflex US Holdings Inc. and Exterran Energy Solutions L.P. v. United Mexican States (ICSID Case No. ARB/23/22).
[3] Amerra Capital Management LLC and others v. United Mexican States (ICSID Case No. UNCT/23/1).
[4] Holiday Inns S.A. and others v. Morocco (ICSID Case No. ARB/72/1).
[5] As of June 30, 2023 (i.e. by the end of FY2023), a total of 933 arbitration and conciliation cases registered under the ICSID Convention and Additional Facility Rules.