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  • Print publication year: 2016
  • Online publication date: January 2017

4 - Early Dismissal of Claims in Investment Arbitration

from PART II - Procedural Aspects and Avenues of Reassertion


A. Introduction

In the last two decades, there has been a significant increase of investment arbitrations. According to statistics of the International Centre for Settlement of Investment Disputes (ICSID), the number of cases registered under the ICSID Convention and the Additional Facility Rules until 31 December 2015 amounted to 549, out of which 517 cases date from 1996 onwards. At the same time, the statistics show that States still win in more than half the cases decided by arbitral tribunals under the ICSID Convention and the Additional Facility Rules.

Despite this high success rate, a number of States have criticised the time and costs needed to defend their position in investment proceedings. The criticism has been particularly sharp in situations where the underlying claim of the investor had from its outset no prospects of success. Why conduct lengthy and expensive proceedings if arbitration is doomed to fail?

It is against this background that various initiatives have been taken to create mechanisms for the early dismissal of claims. Some of these mechanisms have only recently been applied in case law. Others are yet to be tested in practice. As we are venturing into largely unchartered legal territory, this chapter takes a closer look at these different instruments, which include a procedural mechanism for early dismissal under the ICSID Arbitration Rules (see Section B) as well as treaty mechanisms under certain investment agreements (see Section C).

It is submitted that most of the mechanisms for early dismissal provide for a rather weak form of control by States. While increasing codificatory efforts have limited the flexibility of arbitral tribunals to conduct the proceedings as they deem appropriate, States are not in a position to control the ultimate outcome of cases. The situation is different under the Comprehensive Economic and Trade Agreement (CETA), which includes a non-judicial mechanism for the early dismissal of certain claims relating to financial services. In this limited field, States have gained control over the ultimate outcome of the proceedings, and the law-based paradigm of investment protection appears to have given way to a policy-based paradigm of investment protection (see Section D).

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