Arbitration Institution Digest (Part 1): China, World Bank and the Netherlands

At a Glance

• In the 2023 international cases accepted by CIETAC, the total amount in dispute increased 41% from the previous year.
• More arbitration and conciliation cases were registered with ICSID in 2023 than any year in its existence, except for 2021 and 2018.
• Although the number of cases brought in NAI was down almost 50%, the total amount in dispute in 2023 was almost double the amount for 2022.

International arbitration statistics are back in season. In the first couple of months of 2024, the China International Economic and Trade Arbitration Commission (CIETAC), the World Bank’s International Centre for Settlement of Investment Disputes (ICSID), and the Netherlands Arbitration Institute (NAI) have all released their case load statistics for 2023.

As far as CIETAC and ICSID are concerned, the number of new cases registered were up (again). While the NAI’s number of new cases registered fell in 2023, the total amount in dispute skyrocketed.

Meanwhile, CIETAC and the NAI have released new arbitration rules effective January 1, 2024, and March 1, 2024, respectively. Driven by the technological developments of the past couple of years and desire to promote effective case management, both focus on efficiency.

China International Economic and Trade Arbitration Commission (CIETAC)

CIETAC released its 2023 Work Report, reflecting further growth in international arbitrations based in China.

Some of the key statistics in relation to international arbitrations are found below:

• A total of 645 international (“foreign-related”) cases were accepted by CIETAC, with a total amount in dispute of approximately $7.3 billion (52.765 billion yuan). This was an increase of 41% from 2022. Of those international arbitrations, in 62 of them, there were no Chinese parties to the dispute at all.
• Parties from 71 different countries and regions participated in CIETAC arbitrations. The top 10 jurisdictions of foreign parties included Hong Kong, United States, Germany, South Korea, Singapore, the British Virgin Islands, the United Kingdom, the Cayman Islands, Canada and Taiwan.
• A total of 93 cases were conducted in English, either solely in English or jointly in English and Chinese.
• Parties selected a wide range of applicable laws, including the UN Convention on the Contracts for the International Sale of Goods (CISG) and, among others, the laws of Hong Kong, Russia, Uzbekistan, England and Wales, and Mongolia.

CIETAC has also released its 2024 Arbitration Rules, with amendments relating to online case filing and virtual hearings, improving interim measures, and introducing the early dismissal procedure.

International Centre for Settlement of Investment Disputes (ICSID)

The recently released caseload statistics from the World Bank reveal that more arbitration and conciliation cases were registered with ICSID in calendar year 2023 than any year in its existence, except for 2021 and 2018.

In 2023:

• A total of 57 new arbitrations and conciliation cases were registered under the ICSID Convention and Additional Facility Rules.
• Of ICSID cases registered in 2023, 40% were based on bilateral investment treaties (BITs), which is down from 54% in 2022.
• Of the cases registered in 2023, 15% were based on the North American Free Trade Agreement (NAFTA), which is on par with 2022, and another 15% were based on NAFTA’s successor, the United States-Mexico-Canada Agreement (USMCA). Combined, this represents a substantial increase in ICSID’s caseload based on disputes brought pursuant to North American international trade law.
• Consistent with the increased number of cases brought under NAFTA and USMCA, the geographic distribution of cases was heavily concentrated in the Western Hemisphere: Central America & the Caribbean (23%), North America (19%), and South America (16%). This is a change from 2022, when Eastern Europe & Central Asia accounted for over a quarter of all cases.
• By far, Mexico and Honduras registered the largest number of cases under the ICSID Convention and Additional Facility Rules in 2023.

Also according to ICSID’s Annual Report 2023, ICSID administered over 70% of all known international investment cases in FY2023. This included 33 cases administered under the new 2022 ICSID Additional Facility Rules. Further, ICSID administered a record number of cases under UNCITRAL and other non-ICSID procedural rules.

Netherlands Arbitration Institute

Earlier this year the Netherlands Arbitration Institute also released their 2023 caseload statistics.

Overall, the number of cases brought in NAI was down significantly, from 133 cases registered in 2022 to a total of 70 cases registered in 2023. This is a reduction of almost 50%. However, the total amount in dispute in 2023 was €4 billion, almost double the amount for 2022 (€2.5 billion).

The parties selected English the majority of the time (62%) as the language of proceedings rather than Dutch (38% of cases).

Over 2023 the NAI completed 62 cases, with 27 cases reaching a final award and 18 cases resulting in a final award by agreement between the parties. The remaining cases were terminated for various reasons (either by agreement or consolidation).

Additionally:

• In 2023, 77% of new cases were commenced using the “standard” procedure and 15% were commenced using a summary procedure.
• Of cases brought, 61% were of a national nature and 39% were of an international nature.

On February 15, 2024, NAI also released their new arbitration rules for 2024. They came into force from March 1, 2024. The new rules bring additional safeguards for arbitrators’ independence and impartiality, efficiency improvements (for instance, by introducing expedited arbitration procedures), and other improvements around quality, sustainability and inclusivity.

Conclusion

With some of the industry’s most well-known arbitration institutions (ICC, SIAC, HKIAC, LCIA and AAA-ICDR) still to release their statistics, we will be charting how they have fared in these testing times.