Lexis®Library update: The study consists of three parts: key developments and International Centre for Settlement of Investment Disputes (ICSID) reform, procedural efficiency, and updates since the 2019 report.
Reform of the ICSID arbitration system
On 1 July 2022, the 2006 editions of the ICSID and the ICSID Additional Facility (AF) arbitration rules were replaced and updated. Amendments contained in the new 2022 versions serve to codify existing practices in investor-state tribunals. Noteworthy updates include the introduction of an indicative list of types of provisional measures, criteria for granting them, time limits for tribunals when issuing decisions, and a provision on the security for costs.
Average length of proceedings
On average, it took tribunals 112 days to resolve provisional measure requests, with ICSID tribunals typically taking 124 days, UNCITRAL 96 days, and ICSID AF 78 days. Timings varied depending on the parties’ agreement, the type of provisional measure and the urgency of the request.
Procedural factors that affect the length of the proceedings
Tribunals held hearings in nearly half of all cases involving requests for provisional measures. Two-thirds of such cases involved in-person hearing. Notably, statistics showed that provisional measures are more likely to be granted or partially granted when a hearing is held. However, hearings significantly delay the tribunals’ decision (from 71 to 175 days) in cases which involved an in-person hearing.
Use of witnesses and experts
Tribunals used witness testimony in one-seventh of provisional measures cases, and one in every twenty cases used experts, often in conjunction with each other. Whilst the use of these parties was seen to have no effect on the likelihood of the tribunal granting the request, it more than doubled the time it took for the tribunal to issue its decision.
Decision on costs
The majority of tribunals remain reluctant to issue any costs awards before the end of proceedings, with only 3 per cent of the tribunals expressly ruling on this issue.
Emergency arbitration and the ‘most provisional’ measures
While the ICSID Secretariat has rejected proposals for the inclusion of emergency arbitration in 2022 ICSID and ICSID AF rules, it was extensively used in practice under the Stockholm Chamber of Commerce rules, resulting in at least 12 known decisions on provisional measures.
ICSID tribunals have also frequently used ‘most provisional measures’ to ensure that the subject of the provisional measures request survives long enough for the tribunal to have time to rule on the requested provisional measure.
Parties making requests
Investors remained more likely to submit provisional measure requests, however the number of respondent states to have done so significantly increased. The past three years have also seen an increase in the number of decisions in intra-regional disputes, where both claimant and respondent states came from the same region.
Types of provisional measures
Non-aggravation of the dispute, preservation of status quo and the stay of parallel proceedings in the respondent’s courts emerged as the most requested types of provisional measures, with applications for security costs emerging as the fourth most requested measure.
Criteria for granting provisional measures
New provisions on the criteria for granting provisional measures focus on the urgency, necessity, and proportionality of the requested measure. The number of granted requests were less common where tribunals applied these criteria.
Source: Empirical study: Provisional measures in investor-state arbitration (2023)
This content was first published by LNB News / Lexis®Library, a LexisNexis® company, on 23 January 2023 and is published with permission. Further information can be found at: www.lexisnexis.co.uk.
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