Arbitration Updates From China, Stockholm and the World Bank

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Authors: David Yoshimura , James Wagner , Bryan K. Washburn , Christopher Jefferies

In this continuation of updates on international arbitration trends in 2022, several additional arbitral institutions have published their annual reports, confirming a busy recovery year in the international arbitration industry.

China

The China International Economic and Trade Arbitration Commission (CIETAC) released its 2022 Work Report, reflecting a busy year for both Chinese domestic arbitration and international arbitrations based in China.

In 2022:

A total of 642 international (“foreign-related”) cases were accepted by CIETAC, with a total amount in dispute of approximately $5.6 billion (37.4 billion yuan).
Of those international arbitrations, in 83 of them, there were no Chinese parties to the dispute at all. The amount in dispute in these non-Chinese cases was approximately $800 million (5.4 billion yuan).
Parties from 69 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 Japan.
CIETAC appointed 87 foreign arbitrators across 83 different cases.
A total of 115 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, Singapore, Uzbekistan, England and Wales, and Mongolia.
CIETAC awards were enforced in the courts of the United States, the United Kingdom, France, Australia, Singapore, Hong Kong and Taiwan, among others.
Nearly 33% of all CIETAC cases were filed online.
Nearly 50% of all CIETAC hearings were conducted online.

While the number of international cases was relatively steady between 2021 and 2022, the number of international cases with no Chinese parties increased by 36% year-over-year. Furthermore, the cumulative amount in dispute for international cases with no Chinese parties increased by 47% year-over-year. Therefore, while the number of international cases has not seen significant growth, CIETAC claims that the cases it oversaw in 2022 “were more international in nature” than in years past.

CIETAC’s report also reflected its many efforts to expand its profile as an institution for international arbitration of disputes even when all parties are outside China. Those efforts include the development of infrastructure to support more online filings and hearings in the future, and proactive participation in the development of international rule-making through groups including the UN Commission on International Trade Law (UNCITRAL). It will become clear over the course of 2023 whether those efforts result in further inflow of international commercial disputes to China and to CIETAC.

ICSID

The International Centre for Settlement of Investment Disputes (ICSID) is a specialist arbitration institution that is part of the World Bank Group. It focuses on legal dispute resolution and conciliation for international investment dispute settlement. It has recently released its case statistics for last year.

In 2022:

A total of 41 cases were registered under the ICSID rules, and arbitrations under the ICSID Convention accounted for 34 of those cases, followed by seven arbitrations applying the ICSID Additional Facility Rules.
Thirty different states were named as respondents.
Of the newly registered cases, 54% asserted jurisdiction based on a bilateral investment treaty. The Energy Charter Treaty accounted for 22% of registered cases, and investment contracts between a foreign investor and host state for 12% of the new cases.
The geographic distribution of cases was also wide — where 27% of new cases came from Eastern Europe and Central Asia, 17% from South America, 14% from the Middle East and North Africa, and 12% from Western Europe.
In 2022, 24% of the cases registered involved oil, gas and mining; and 20% related to electric power and other energy sources. These sectors were followed by finance, and information and communication, each with 12% of disputes. While water, sanitation and flood protection; and construction accounted for 8% each.
Of cases concluded in 2022, 51% were settled or otherwise discontinued; and of the cases decided by the tribunals, 56% of awards upheld investors’ claims in part or full.

The case load of ICSID has dropped slightly from the last two years, from 58 in 2020 and 66 in 2021. However, when taken in the context of more historical numbers, the 41 cases filed in 2022 is still relatively high. This shows that investor-state disputes are still occurring in high numbers, and ICSID is a trusted place for them to take place. An interesting note on the diversity of the arbitrators appointed was that, overall, women accounted for 23% of appointments to ICSID cases in 2022, slightly down from 27% in 2021. Co-arbitrators who had the power to appoint another arbitrator appointed 40% women, however; so it seems that it is the parties themselves who are bringing the number of women appointees down.

Stockholm

Following on from its name change and revisions to its model arbitration clause and arbitration rules earlier this year, the SCC Arbitration Institute released its caseload statistics for 2022 on [2] March 2023.

They show a decrease in the number of new cases, from 165 in 2021 to 143 in 2022. However, there was a very significant increase in the total amount in dispute in cases administered by the SCC, rising from €840 million in 2021 to €1.6 billion in 2022.

The SCC retains a very close connection with parties from the Nordic countries, with Sweden (1st place with 198 parties), Denmark (4th with 9 parties) and Norway (9th with 6 parties) featuring in the top 10 for nationality of parties. It is worth noting that Russian parties have featured in the top five for nationality of parties since the SCC started publishing statistics in 2008. It will be interesting to see whether that continues into 2023 and beyond.