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Costs, damages and duration in investor-State arbitration

We are delighted to announce the publication of the latest iteration of the study on “Costs, Damages and Duration in Investor-State Arbitration” authored by Allen & Overy partner Matthew Hodgson and Yarik Kryvoi of the British Institute of International and Comparative Law (BIICL). 

The study examines over 400 investor-State dispute settlement (ISDS) cases conducted under ICSID, UNCITRAL and other arbitration rules and over 70 ICSID annulment decisions. It provides a comprehensive analysis of how long ISDS proceedings last, how much they cost, how tribunals allocate those costs, and the amount of damages awarded. 

The study offers an empirical insight into the current position with regard to costs incurred by parties in investor-State arbitrations and analyses changes in tribunals’ practices in fixing and allocating costs. Adopting a quantitative focus, the authors consider factors of potential relevance to costs of ISDS proceedings, including the choice of arbitration rules and the length of proceedings. 

The report has identified some significant trends in relation to ISDS proceedings, including the following: 

1. Party costs have decreased over the past three years

2. Investor costs remain higher than respondent States’ costs 

3. The prospects of recovering costs have improved

4. Investors are claiming, and are being awarded, larger amounts

5. There is a steady increase in the length of proceedings

6. The choice of arbitration rules does not significantly impact tribunal costs, costs allocation or the duration of proceedings

This study builds on two earlier studies conducted by Allen & Overy in 2012 and 2017 and provides important empirical data that can help to inform stakeholders of the practical developments relating to ISDS proceedings.