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Growth in states choosing ICC arbitration to resolve disputes

A growing number of states and state-owned enterprises are choosing to resolve their disputes under the ICC Rules of Arbitration, according to a recently published statistics.

According to the dispute resolution statistics for 2019 published by the International Court of Arbitration of the International Chamber of Commerce (ICC), 212 of the 869 new arbitration cases were filed at the ICC last year involving states or state-owned enterprises, a 67% rise over the past five years.

The statistics further highlighted the increasing diversity of the parties involved in ICC arbitration, according to experts in international arbitration at Pinsent Masons, the law firm behind Out-Law.

Rob Wilkins of Pinsent Masons said: "The ICC dispute resolution statistics reveal overall growth, a growing international reach as well as a welcome improvement in diversity. One notable trend, however, is the significant increase in new cases involving states or state entities over the past five years."

"The ICC is increasingly available as a forum for disputes arising under both contracts and relevant investment treaties and the ICC’s drive to explain its role in relation to disputes involving states – including through the revised Rules of Arbitration and the ICC Commission Report on States, State Entities – appears to be working in encouraging states and state entities globally, but in particular from Sub-Saharan and North Africa, to choose ICC arbitration for the resolution of disputes."

The 869 new arbitration cases filed under the ICC Rules of Arbitration last year is the second highest number of newly filed cases in any year the institution has recorded after 2016.

Parties involved in the cases came from 147 countries and independent territories, which is a new record. ICC arbitrations were seated across 116 cities in 62 countries, with the most commonly selected seat being London, England, with 114 cases. France with 108 cases, Switzerland with 84 cases and the US with 49 cases were the next most popular seats of arbitration selected.

Of the 2,498 parties involved in the cases filed in 2019, nearly 40% were based in Europe. However, participation of parties from the Asia Pacific region significantly increased by 57% from the previous year to nearly 30% of the overall number. Parties from the Americas accounted for approximately 25% of all participating parties, with parties from North Africa and Sub-Saharan Africa accounting for approximately 8% of the total. States or state-owned parties accounted for a fifth of all Sub-Saharan and North African parties.

Similar to previous years, the largest number of ICC arbitration cases last year concerned disputes within the construction and engineering and energy sectors, with 211 and 140 cases respectively.

For ICC arbitrations in 2019, arbitrators came from 89 different jurisdictions. Arbitrators from Azerbaijan, Botswana, Haiti, Malawi, Palestine and St Kitts and Nevis participated for the first time.

Women made up 21% of all arbitrators with 312 receiving appointments or confirmations. Whilst women acting as co-arbitrators and sole arbitrators remained steady at around 40% and 30% respectively, the number of women acting as president has increased to 30%.

The ICC's report also highlighted the institution's continued efforts to make its proceedings more efficient. Since 2016, when measures to improve the efficiency in the submission of draft awards were implemented, including reduced fees for arbitrators who are late, some good progress has been made with the rate of untimely draft awards reducing from 57% in 2016 to 40% in 2019, according to the report.

Co-written by Mahir Hussein of Pinsent Masons.

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