Le cautionnement pour frais

The document examines the challenges states face in obtaining security for costs in investor-state dispute settlement (ISDS), noting that tribunals often apply extremely strict criteria. It highlights the risks posed by third-party funding and the lack of consistent rules in arbitration frameworks. To address this, the guide proposes specific treaty language to mandate security for costs when investors are likely insolvent or use 'hit and run' third-party funding.

• States seek security for costs to manage the high financial burden of ISDS defense, which averages 8 million USD per case, and to deter speculative or futile claims. Examples include the Philippines spending 58 million USD on two cases and Australia spending 39 million USD defending tobacco packaging laws.
• Arbitration tribunals have historically been reluctant to grant security for costs, often applying strict criteria that require 'extreme' or 'exceptional' circumstances, such as evidence of serious misconduct or bad faith, rather than simply considering the investor's financial position.
• Many tribunals have ruled that an investor's lack of assets or the use of a shell company is not sufficient justification for security for costs, contradicting the approach found in some newer treaties like the EU-Vietnam FTA.
• Third-party funding (TPF) creates a risk of 'hit and run arbitration,' where a funder pays for the action but does not guarantee the payment of costs if the investor loses. Most tribunals do not consider TPF alone as an exceptional circumstance justifying security for costs.
• Recent treaty models, such as the 2016 Czech BIT model, provide more precise criteria for security for costs, including cases where an investor has transferred assets to avoid arbitration consequences or cannot pay a reasonable share of legal fees.
• The guide recommends that states adopt specific treaty language that mandates the closure of proceedings if an ordered security for costs is not paid and requires the disclosure of third-party funding agreements.

APA

Brewin, S. (2018). Le cautionnement pour frais. International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/security-for-costs-best-practices-fr.pdf

Chicago

Brewin, Sarah. Le cautionnement pour frais. International Institute for Sustainable Development, 2018. https://www.iisd.org/system/files/publications/security-for-costs-best-practices-fr.pdf.

Wikipedia

{{cite report |last1=Brewin |first1=Sarah |title=Le cautionnement pour frais |publisher=International Institute for Sustainable Development |date=October 2018 |url=https://www.iisd.org/system/files/publications/security-for-costs-best-practices-fr.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{brewin2018cautionnement, author = {Brewin, Sarah}, title = {{Le cautionnement pour frais}}, institution = {International Institute for Sustainable Development}, year = {2018}, month = oct, url = {https://www.iisd.org/system/files/publications/security-for-costs-best-practices-fr.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }