SMU SIDRA Survey Report 2020

At a Glance: • Almost half of the users who responded to our survey indicated they had been involved in investor-state or multi-lateral investment disputes between 2016 and 2018. • International arbitration was the dispute settlement mechanism of choice with a majority of users opting for institutional or ad hoc arbitration to resolve investor-state disputes. 5.1 Choice of Dispute Resolution Mechanism in Investor-State Disputes • Users selected enforceability, political sensitivity and impartiality as the top three factors influencing their choice of a dispute resolutionmechanism in investor-state disputes. • Despite the dominance of arbitration in this field, users indicated an openness to selecting other dispute settlement mechanisms in investor-state matters such as litigation and mediation. • Users’ responses suggest the need for reform in this field. Section 5 Investor-State Dispute Resolution Exhibit 5.1.1 Choice of Dispute Resolution Mechanism The chart refers to the respondents’ usage of dispute resolution mechanism in investor-State Disputes. Note: This question allows for multiple responses. The sum of the percentages may exceed 100% All Users Institutional arbitration Ad hoc arbitration International Court Ad hoc mediation Institutional mediation Hybrid Others Local Court 23% 22% 14% 7% 6% 4% 52% 82% 5.1.1 The most used dispute resolution mechanism for investor-state disputes was institutional arbitration (82%) followed by ad hoc arbitration (52%). Even with the challenges and criticism of international investment arbitration, arbitration remains the dispute settlement mechanism of choice for resolving investor-state disputes. 4 This is not surprising as out of more than 2000 bilateral or multilateral investment treaties in force, 5 the majority provide for institutional or ad hoc arbitration for resolving international investment disputes. The International Centre for Settlement of Investment Disputes (‘ ICSID ’) is the leading international arbitration institution devoted to investor-state dispute settlement. Arbitration institutions have also formulated rules to govern investor-state disputes. For instance, SIAC launched the SIAC Investment Rules in 2017. With respect to ad hoc arbitration, the UNCITRAL Arbitration Rules have been widely used in investor-state disputes. 4 While the term ‘dispute resolution’ is used primarily throughout this Report, in this section it is used interchangeably with ‘dispute settlement’ to reflect the terminology of ‘investor-state dispute settlement’ (ISDS). 5 This number is taken from Investment Policy Hub of the United Nations Conference on Trade and Development (UNCTAD), available at www.investmentpolicy.unctad.org 2020 FINAL REPORT 16