Investment Treaty News: 2006 – A Year in Review

The report analyzes the landscape of investor-state disputes in 2006, noting a shift toward non-ICSID arbitration venues and a lack of transparency in ad hoc proceedings. It examines specific cases involving land reform, intellectual property, and privatization, while highlighting legal contradictions in rulings against Argentina. The document also discusses the practice of 'treaty-shopping' and the ongoing debate over the distinction between legitimate government regulation and indirect expropriation.

• In 2006, the International Centre for Settlement of Investment Disputes (ICSID) handled less than half of the known treaty-based investment arbitrations launched that year, with 15 cases at ICSID and at least 21 launched outside the facility.
• The number of known investment treaty cases initiated in 2006 was lower than in each of the three preceding years, and the annual number of cases at ICSID has been declining since its peak in 2003.
• Rulings in 2006 affirmed the practice of 'treaty-shopping,' where investors incorporate in a third country to access more favorable treaty protections, as tribunals respected the broad wording of treaties that define 'investors' as any legal entity incorporated in the home state.
• Arbitral tribunals in 2006 showed contradictory interpretations of 'umbrella clauses' in the U.S.-Argentina bilateral investment treaty, with some rejecting an expansive reading that would allow contractual breaches to be treated as treaty breaches, while others accepted it.
• There is a persisting divergence among tribunals regarding the definition of indirect expropriation, specifically whether the test should focus on the effects of a government measure or the purpose and legitimacy of the regulation.
• In disputes involving Argentina's financial crisis, tribunals reached contradictory conclusions on the 'necessity' defense; one tribunal accepted it for a specific period (December 1, 2001 to April 26, 2003), while another rejected it entirely.
• Civil society and NGOs are increasingly attempting to participate in IIA disputes as amicus curiae, as seen in the Glamis v. USA case regarding mining regulations near Native American sacred sites and the Biwater v. Tanzania water concession dispute.
• The UNCITRAL arbitration rules are under review to potentially increase transparency, as many 2006 cases proceeded under these rules without public disclosure of the parties or proceedings.
• Challenges to the independence of arbitrators occurred in 2006, often centering on whether an arbitrator's professional relationships with law firms representing other investors constitute a conflict of interest.

APA

Peterson, L. E. (2007). Investment Treaty News: 2006 – A Year in Review. International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/itn_year_review_2006.pdf

Chicago

Peterson, Luke Eric. Investment Treaty News: 2006 – A Year in Review. International Institute for Sustainable Development, 2007. https://www.iisd.org/system/files/publications/itn_year_review_2006.pdf.

Wikipedia

{{cite report |last1=Peterson |first1=Luke Eric |title=Investment Treaty News: 2006 – A Year in Review |publisher=International Institute for Sustainable Development |date=2007 |url=https://www.iisd.org/system/files/publications/itn_year_review_2006.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{peterson2007investment, author = {Peterson, Luke Eric}, title = {{Investment Treaty News: 2006 – A Year in Review}}, institution = {International Institute for Sustainable Development}, year = {2007}, url = {https://www.iisd.org/system/files/publications/itn_year_review_2006.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }