ICSID’s Annual Report for FY2021

In October 2021, the International Centre for Settlement of Investment Disputes (“ICSID”) published its Annual Report which provides a detailed look at ICSID’s activities from 1 July 2020 to 30 June 2021 (“FY2021”).

This year’s Report is significant as it covers a time period during which the global Cobid-19 pandemic affected all forms of legal dispute resolution.

Some of the main key themes coming from the Report are set out below.

Caseload trends

Despite the worldwide effect of Covid-19, ICSID reports a record number of registered cases and administered cases for FY2021. There was also a record number of hearings (all held remotely) and the second highest number of procedural orders and decisions issued in a single fiscal year. By way of a summary of the 2021 caseload, there were:

  • 70 new cases registered
  • 55 proceedings concluded
  • 332 cases administered compared to 303 the previous year
  • 71% of disputes decided by the Tribunal and 29% settled or otherwise discontinued

The Report notes an increasing variety of treaties as a basis of consent to establish ICSID’s jurisdiction. As in previous years, the majority of cases were instituted on the basis of bilateral or multilateral treaties and a number of treaties were relied upon by investors for the first time, including the United-States-Mexico-Canada Agreement and the Establishment and Consular Convention between Italy and Switzerland.

Geographically, the largest share of cases registered in FY2021 involved States in Eastern Europe and Central Asia (30%), followed by South America and Sub-Saharan Africa (14% each) and Western Europe (10%).

The extractivites and energy sectors continued to account for the largest share of cases, with 29% of new cases coming from the oil, gas and mining industry and 14% from the electric power and other energy resources sector. The construction sector was also prominent, accounting for 16% of new cases.

The Report notes some success in enhancing diversity of arbitrators, conciliators and ad hoc committee members appointed to ICSID cases. 44 nationalities were represented amongst the appointments made in FY2021 and 31% of all appointments involved women. Gender parity was also achieved in first-time appointees.

Spotlight on Mediation

The Report acknowledges that the Singapore Convention and the growing number of international investment agreements that specifically refer to mediation in their dispute settlement provisions are among the efforts made by the international community to put a focus on mediation.

In terms of its own efforts to complement this, the Report notes the following highlights from ICSID’s FY2021:

  • The ICSID mediation rules have been developed, together with a broader update to ICSID’s existing rules for arbitration, conciliation and fact-finding. The mediation rules were last revised in FY2021 and the latest draft was released in June 2021 as part of a working paper on the proposed amendments of the ICSID Rules (on which see below).
  • ICSID continued to host training sessions for mediators of international investment disputes, this time in an online format. It also hosted a new program focussed on the role of State representatives in an investor-state mediation which it delivered jointly with the International Energy Charter and CEDR.
  • ICSID has worked to strengthen its international partnerships and, in FY2021, collaborated with the Secretariat of UNCITRAL on the development of model clauses on mediation for investment treaties or a potential multilateral instrument. It also entered into cooperation agreements with the Energy Charter Secretariat and the Singapore International Mediation Centre. This marked the first cooperation agreement for ICSID with a centre that is exclusively focused on mediation

Update on Rule Amendments

ICSID’s Report says that two of its priorities advanced considerably in FY2021: the amendment of its procedural rules and the development of a Code of Conduct for Adjudicators in International Investment Disputes.

The fifth amendment to the ICSID Procedural Rules was formally launched in 2016 with the aim of modernising the ICSID rules and making the dispute resolution process more time and cost effective and less paper-intensive. Five working papers on the current rule amendment project have been published so far, the latest in June 2021.

The collaboration for a Code of Conduct for Adjudicators in International Investment Disputes addresses matters such as independence and impartiality and the duty to conduct proceedings with integrity, fairness and efficiency. A first draft of the Code was published in May 2020 followed by two rounds of consultations with ICSID and UN Member States. A second draft was published in April 2021 and a third in September 2021.

The Report summarises a busy year for ICSID with a clear focus on future initiatives as well as on the management of a higher-than-usual number of registered cases. The Report also notes an expansion of membership with 164 signatories at the end of FY2021, of which 155 are Contracting States to the ICSID Convention (the Republic of Ecuador is the newest signatory, having signed the ICSID Convention in June 2021), perhaps an indication that ICSID’s activities and development are to continue at pace.

The full Report is available on the ICSID website. To view it, click here.