On January 11, 2018, Mexico became the 162nd country to sign the 1965 Convention on the Settlement of Investment Disputes between States and Nationals of Other States (the ICSID Convention), thereby confirming its consent to arbitrate disputes under the current ISDS system. However, it remains to be seen whether Mexican Senate will ratify the Convention under the new Mexican President in order to be fully bound. After the ratification, ICSID convention will provide an additional pathway for investors to seek redress for investor-state dispute.

In March 2018, ECJ found investor-state dispute settlement (ISDS) provisions in bilateral investment agreements between EU countries are incompatible with EU law in Case C-284/16 Achmea. Such ruling reveals that the ECJ understands ISDS as sidelining and undermining the powers of the courts of the Member States. According to the report published by Center for International Environmental Law (CIEL) and ClientEarth in April, the Achmea decision is likely to have profound consequences in intra-EU BITs with arbitration clauses (currently more than 190 of intra-EU BITs exist). Moreover, the impact may extend to extra-EU BITs—those concluded between EU member states and non-member states. EU member states may not be able to rely on such agreements in the future and the enforceability of awards before EU member state courts is also in doubt.  The full impact of the Achmea ruling is not yet clear and it is worthy to follow up on State parties’ response regarding their intra‑EU BITs.

On April 23-27, a working group entrusted by the United Nations Commission on International Trade Law (UNCITRAL) including more than 80 States and 50 observer organizations met in Vienna to participate in the phase II discussion on possible reform regarding ISDS. The Working Group concluded that developing reforms in UNCITRAL to address concerns regarding three broad categories of ISDS would be desirable: consistency and correctness of outcomes, issues relating to decision-makers in ISDS proceedings, and the cost and duration of those proceedings.

 

International commercial arbitration

According to 2018 International Arbitration Survey,

• the five most preferred seats of arbitration are London, Paris, Singapore, Hong Kong and Geneva.
• The five most preferred arbitral institutions are still the ICC, LCIA, SIAC, HKIAC and SCC.
• Respondents believe that the use of international arbitration is likely to increase in the Energy, Construction/ Infrastructure, Technology, and Banking and Finance sectors.
• More than half of respondents (61%) think that “increased efficiency, including through technology” is the factor that is most likely to have a significant impact on the future evolution of international arbitration.

Through 2018 survey statistics, the prognosis for London at present appears stable. But As the Brexit negotiations continue into 2019 and the future framework for the enforcement of court judgments remains uncertain, parties may turn to arbitration and the security of the New York Convention as a safe harbour to avoid Brexit related enforcement risk. (see Brexit and beyond).

Moreover, with the continued backing of the Chinese government and other governments jumping on board, over $1tn has been committed to thousands of Chinese’ Belt and Road Initiative (BRI) projects around the world and the BRI can be expected to generate disputes in arbitration over the years to come (see International arbitration: top trend in 2018).