ICSID data shows growth of contract-based claims

International investment treaties typically provide the legal basis on which investors can trigger investor-state dispute settlement (ISDS) mechanisms, such as ICSID arbitration. However, businesses and states can also specifically provide for ICSID arbitration, or mediation, in their contracts.

ICSID has published a new study on contract-based investment dispute resolution (133-page / 2.3MB PDF) and a separate report (29-page / 720KB PDF) featuring data specific to the 175 contract-based cases that have been registered with it, under the ICSID Convention and Additional Facility, since 1972. The 175 cases account for 16% of the total ICSID caseload up to the end of 2025.

International arbitration expert Sylvia Tonova of Pinsent Masons said: “The growing body of ICSID contract cases, from early landmark proceedings to more recent registered cases, provides useful illustrations of how this framework operates in practice and what parties can expect from the process.”

According to the ICSID data, 10 of the 63 new cases registered with it last year were contract-based cases – the joint-highest number of contract-based cases ever recorded by the institution for a single year, matching the total recorded in 2018. There were eight new contract-based cases in 2024.

The first ICSID case was registered in 1972. Since then, 47% of contract-based cases have related to oil, gas or mining. This is a greater proportion than the 26% of total ICSID caseload that oil, gas or mining cases make up, by comparison.

The data also shows that contract-based arbitrations are more time-efficient than treaty-based arbitrations and that states are less likely to succeed with jurisdictional objections to contract-based claims than in cases where claims are raised under investment treaties.

The ICSID report also highlighted that foreign investors are more likely to succeed with contract-based claims against states than in treaty-based cases. In 62% of contract-based cases, tribunals made awards in favour of investors, compared with 45% across the overall ICSID caseload. This data adds further detail to the data on damages claimed and awarded in ICSID arbitrations that the institution began publishing last year.

Cem Kalelioglu of Pinsent Masons, a specialist in arbitration, said there are some advantages to ICSID arbitration when compared to contracting for commercial arbitration proceedings.

“Unlike commercial arbitration, ICSID operates within a self-contained treaty framework: awards are binding and not subject to appeal or challenge before domestic courts, and ICSID contracting states are obliged to enforce them as if they were final judgments of their own courts,” Kalelioglu said. “This is a significantly stronger position than that available under the New York Convention, the treaty that provides for the enforcement of foreign arbitral awards.”

“When companies contract with states or state-owned entities, they should give serious consideration to including ICSID dispute resolution in their agreements – whether under the ICSID Convention itself or, where the Convention's jurisdictional requirements are not satisfied, under the Additional Facility Rules,” he added.

Tonova said that the fact that ICISID has published revised model clauses for inclusion in contracts shows that the institution anticipates continued growth of contract-based claims. Further work on draft principles and model clauses for international investment contracts is being undertaken by the International Institute for the Unification of Private Law (UNIDROIT). It opened a public consultation on its proposals last month. The consultation closes on 15 September.

ICSID administers mediation proceedings too, having introduced mediation rules in 2022.

“Parties can include mediation provisions alongside an arbitration clause, whether as a standalone option or as part of a stepped dispute resolution mechanism, further broadening the toolkit available to parties entering into investment-related contracts,” said Kalelioglu. “As we have highlighted previously, mediation is growing as a dispute resolution method for investment disputes.”