Investment Treaty Arbitration: Opportunities to reform arbitral rules and processes

The report analyzes the landscape of investor-state dispute settlement (ISDS), noting that the International Centre for Settlement of Investment Disputes (ICSID) and the United Nations Commission on International Trade Law (UNCITRAL) are the most frequently used frameworks. It examines the governing structures of intergovernmental bodies (ICSID, PCA, UNCITRAL) versus non-governmental ones (ICC, SCC, LCIA, CRCICA), arguing that intergovernmental structures offer better reform opportunities for states. The document highlights critical flaws in the current system, including the 'dual-role' of arbitrators acting as both counsel and judge, the lack of transparency in private institutions, and the limited avenues for states to challenge awards based on errors of law or fact. It suggests that systemic reforms to these central rules could impact thousands of existing investment treaties simultaneously.

• ICSID and UNCITRAL are the dominant frameworks for investor-state dispute settlement; by the end of 2012, 61.9 per cent of known cases were brought under ICSID and 27.6 per cent under UNCITRAL rules.
• Outcomes of concluded cases show that states successfully defend themselves in a minority of cases; by the end of 2012, 41.4 per cent of decisions were in favour of the state, while 32.4 per cent favoured the investor and 26.2 per cent were settled.
• Intergovernmental institutions like ICSID, PCA, and UNCITRAL provide states with more influence over reform than non-governmental bodies like the ICC or SCC, which are governed by private sector boards.
• Transparency remains a significant issue in private arbitration; while ICSID and UNCITRAL have adopted transparency rules, institutions like the ICC and SCC continue to emphasize confidentiality.
• The 'dual-role' or 'multiple hat' phenomenon, where arbitrators serve as counsel or experts in other investment disputes while sitting on a tribunal, creates concerns regarding impartiality and independence.
• The process for challenging arbitrators is often seen as problematic because the deciding parties are either the remaining co-arbitrators or specific individuals, such as the President of the World Bank or the PCA Secretary-General.
• States have extremely limited options to challenge awards based on errors of law or fact; the New York Convention and the ICSID Convention provide only narrow grounds for annulment or refusal of enforcement.
• The Stockholm Chamber of Commerce (SCC) is particularly relevant for energy-related disputes due to its role under the Energy Charter Treaty (ECT).

APA

Bernasconi-Osterwalder, N., & Rosert, D. (2014). Investment Treaty Arbitration: Opportunities to reform arbitral rules and processes. International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/investment_treaty_arbitration.pdf

Chicago

Bernasconi-Osterwalder, Nathalie, and Diana Rosert. Investment Treaty Arbitration: Opportunities to reform arbitral rules and processes. International Institute for Sustainable Development, 2014. https://www.iisd.org/system/files/publications/investment_treaty_arbitration.pdf.

Wikipedia

{{cite report |last1=Bernasconi-Osterwalder |first1=Nathalie |last2=Rosert |first2=Diana |title=Investment Treaty Arbitration: Opportunities to reform arbitral rules and processes |publisher=International Institute for Sustainable Development |date=January 2014 |url=https://www.iisd.org/system/files/publications/investment_treaty_arbitration.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{bernasconiosterwalder2014investment, author = {Bernasconi-Osterwalder, Nathalie and Rosert, Diana}, title = {{Investment Treaty Arbitration: Opportunities to reform arbitral rules and processes}}, institution = {International Institute for Sustainable Development}, year = {2014}, month = jan, url = {https://www.iisd.org/system/files/publications/investment_treaty_arbitration.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }