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Investor-State Dispute Settlement latest developments

The United Nations Conference on Trade and Development (UNCTAD) has published its latest IIA Issue Note with its annual review of developments in 2015 in investor-state dispute settlement (ISDS). The latest trend are the record high number of 70 ISDS cases filed in 2015 out 696 publicly known cases and the Energy Charter Treaty (ECT) as the most frequently invoked investment agreement.

Since 2001, when the first case invoking ECT was registered, the Energy Charter Secretariat tracked record of 93 publicly known investment arbitration cases where the ECT was invoked (sometimes together with a BIT). Of these, 55 are pending, 32 have been concluded by arbitral awards (including 3 consent awards, i.e. arbitral awards rendered by an arbitral tribunal to record a settlement agreement between the parties), 1 was discontinued and 5 more case have been settled by the parties without recording their agreement in a consent award. Of all cases, 59 have been brought before The International Centre for Settlement of Investment Disputes (ICSID), 15 before the Stockholm Chamber of Commerce (SCC), 12 before ad hoc United Nations Commission on International Trade Law (UNCITRAL) tribunals and 7 before the Permanent Court of Arbitration (PCA) (applying UNCITRAL rules). Out of the 32 final awards, 26 have been published. In 8 cases the tribunal has denied jurisdiction, in 8 cases no breach of the ECT obligations was found, and in 2 cases the arbitral tribunal found a breach of the ECT obligations but no damages were awarded. In 11 cases the tribunal awarded damages to the investors (though some of the awards have been set aside pending appeal). 

Since 2013 the Energy Charter Secretariat has been actively promoting the use of good offices and mediation for the settlement of investment disputes under the ECT. In fact during the last years, the Secretariat has provided in several occasions its good offices prior to the investor resorting to international arbitration. As a result, the Energy Charter Conference is about to endorse a Guide on Investment Mediation (prepared in cooperation with the International Mediation Institute, SCC, PCA, ICSID, ICC and UNCITRAL) designed to:

  1. explain the mediation process in general;
  2. facilitate tips and;
  3. explain the role of the Energy Charter Secretariat and other institutions.

The aim is to have an explanatory document that could be voluntarily used by governments and companies to take the decision on whether to go for investment mediation and how to prepare for it.