Denial of Benefits in Investment Arbitration


Many of the Multilateral and Bilateral Investment Treaties (BITs) concluded in recent decades contain a provision often referred to as a denial of benefits clause. Examples include the Netherlands Model BIT[1], the Comprehensive Economic and Trade Agreement between Canada and Europe (CETA)[2] and most notably the Energy Charter Treaty (ECT).[3] The aim of denial of benefits clauses is to “ensure the reciprocity of interest to investors and host States”[4], providing the possibility for States to deny the benefits of a treaty to mere shell corporations, mailbox companies, and “treaty shoppers”. 

In investment arbitration, States can invoke a denial of benefits clause as part of their objections to jurisdiction. Jurisdictional objections are based on the principle of compétence-compétence, which empowers tribunals to decide whether they have the authority to hear a certain case or not. Denial of benefits in investment arbitration can be based on either the background of the investor (jurisdiction ratione personae) or on the nature of the investment (jurisdiction ratione materiae).

Denial of Benefits Ratione Personae

A good example of denial of benefits for reasons related to the investors can be found in the ECT:

Each Contracting Party reserves the right to deny the advantages of this Part to:
(1) A legal entity if citizens or nationals of a third state own or control such entity and if that entity has no substantial business activities in the Area of the Contracting Party in which it is organised;[5]

The purpose of this clause is to protect States from the claims of so-called “treaty shoppers” and shell corporations. Treaty-shopping occurs when investors set up companies in a foreign jurisdiction only to gain access to favourable investment protection treaties.[6] A shell company, in turn, is a company that “does not itself do or own anything but is used to hide a person’s or another company’s activities[7], meaning that it has no substantial business in the host State (also called a letterbox or mailbox company when it has no assets at all). When the investor as a legal entity is found to fall under the above categories and the host State invokes the denial of benefits clause, the company will not be able to enjoy the protection of the treaty even when it otherwise satisfies the requirements of the definition of investor found in the treaty.

Denial of Benefits Ratione Materiae

The ECT also provides for the possibility of denying the advantages of the treaty based on the background of the investment:

Each Contracting Party reserves the right to deny the advantages of this Part to: (…)
(2) an Investment, if the denying Contracting Party establishes that such Investment is an Investment of an Investor of a third state with or as to which the denying Contracting Party:
(a) does not maintain a diplomatic relationship; or
(b) adopts or maintains measures that:
(i) prohibit transactions with Investors of that state; or
(ii) would be violated or circumvented if the benefits of this Part were accorded to Investors of that state or to their Investments.[8]

The purpose of this subclause is similar, including to exclude protection to investments that do not have a real economic connection with the home State.

Application of Denial of Benefits in Investment Arbitration

The application of the clause by different tribunals is by no means straightforward, and it also must be mentioned that to date “there is no abundant case law[9] on the issue. The main questions that arise concern the terms “ownership“, “control” and “substantial business activity“, as well as the temporal aspects of the invocation by the host State.

These issues have mainly arisen in the context of ratione personae invocation of the clause (as seen in Article 17(1) of the ECT) while paragraph two (the ratione materiae invocation) may gain more importance with the recent sanctions placed against Russia following the launch of the country’s war against Ukraine.[10]

[1] Netherlands Model BIT.

[2] Comprehensive Economic and Trade Agreement.

[3] Energy Charter Treaty.

[4] Anne K. Hoffman, ‘Denial of Benefits in International Investment Law’, in Bungenberg, Griebel, Hobe, Reinisch (eds.),  International Investment Law,  C.H. BECK Hart Nomos (2015), p. 598.

[5] Energy Charter Treaty Article 17(1).

[6] John Lee, ‘Concerns of Treaty Shopping in International Investment Arbitration’, in Thomas Schultz (ed), Journal of International Dispute Settlement, Oxford University Press 2015, Volume 6 Issue 2, p. 355.

[7] Definition of Shell Company –

[8] Energy Charter Treaty Article 17(2).

[9] Anne K. Hoffman, ‘Denial of Benefits in International Investment Law’, in Bungenberg, Griebel, Hobe, Reinisch (eds.),  International Investment Law,  C.H. BECK Hart Nomos (2015), p.601.

[10] Crina Baltag and Loukas A. Mistelis, “ECT Modernisation Perspectives: ECT Modernisation and the Denial of Benefits Clause: Where the Practice Meets the Law”, Kluwer Arbitration Blog, 22 July 2020.

International Arbitration

Translations in International Arbitration


Translations play a crucial role in international arbitration. In a forum where multiple nationalities and languages are involved, the use of translations is common. However, many arbitration users, and lawyers, remain unaware of the challenges of legal translations. While linguistic challenges may increase time and costs, little attention is paid to the complexity of language differences and the possible impact of mistranslations, which will be discussed in the following paragraphs.

Language of the Proceeding: Why Are Translations Required in International Arbitration?

In arbitration, one common issue relates to the language to be used in the proceedings. Typically, arbitration rules allow parties to choose the language(s) to be used in the arbitration without limitation (sometimes, but rarely due to its inefficiencies, two languages can be used simultaneously).[1]

In fact, many arbitral institutions recommend the parties to designate the language of the arbitration in their arbitration agreement to avoid discord after an arbitration has begun.[2] For instance, the UNCITRAL Arbitration Rules recommend a model arbitration clause which includes “[t]he language to be used in the arbitral proceedings.[3]

Similarly, the commentary to the Standard ICC Arbitration Clause provides that “it may be desirable for [the parties] to stipulate the place and language of the arbitration”. Likewise, the International Centre for Dispute Resolution (ICDR) recommends the language to be added to the parties agreement:[4]

Parties can provide for arbitration of future disputes by inserting the following clause into their contracts:

Any controversy or claim arising out of or relating to this contract, or the breach thereof, shall be determined by arbitration administered by the International Centre for Dispute Resolution in accordance with its International Arbitration Rules.

The parties should consider adding:

  1. The number of arbitrators shall be (one or three);
  2. The place of arbitration shall be [city, (province or state), country]; and
  3. The language of the arbitration shall be […]

If the parties fail to specify the language, the arbitral tribunal is generally empowered to decide a specific language to be used. In this regard, Article 20 of the ICC Arbitration Rules expressly provides that the language(s) of the arbitration shall be determined by the arbitral tribunal if the parties fail reach an agreement:[5]

In the absence of an agreement by the parties, the arbitral tribunal shall determine the language or languages of the arbitration, due regard being given to all relevant circumstances, including the language of the contract.

Article 19.1 of the UNCITRAL Arbitration Rules also authorizes tribunals to determine the language(s) to be used in the proceedings:[6]

Subject to an agreement by the parties, the arbitral tribunal shall, promptly after its appointment, determine the language or languages to be used in the proceedings. This determination shall apply to the statement of claim, the statement of defence, and any further written statements and, if oral hearings take place, to the language or languages to be used in such hearings.

Once the language is determined, the need for translations may arise. Not many arbitration rules have specific provisions regarding translations. A notable example, however, is Article 19.2 of the UNCITRAL Arbitration Rules, which gives the arbitral tribunal explicit discretion to order documents, submitted in the original language, to be translated into the language(s) of the arbitration:[7]

The arbitral tribunal may order that any documents annexed to the statement of claim or statement of defence, and any supplementary documents or exhibits submitted in the course of the proceedings, delivered in their original language, shall be accompanied by a translation into the language or languages agreed upon by the parties or determined by the arbitral tribunal.

That said, translations may be needed in variety of circumstances throughout the arbitral proceeding. There is little point in submitting a document that cannot be read by all members of the arbitral tribunal.

Translation of Written Submissions and Evidence in International Arbitration

Parties’ Written Submissions

Mostly, the parties’ written submissions are drafted in the language of the arbitration. Hence, there will be no need for translation of the parties’ pleadings. Nevertheless, as noted above, the arbitration may be bilingual. In such a case, the translation of written submissions might be necessary, at least, for one of the languages.[8]

Law Applicable to the Dispute

Foreign legislation should be translated if the original differs from the language of the arbitration. Some international instruments and bilateral investment treaties are concluded in more than one language, which reduces the need for translation. For example, the original text of the Vienna Convention on the Law of Treaties was presented in Chinese, English, French, Russia, and Spanish, which are equally accepted.[9]

Underlying Contract

While arbitrators are likely to take into account the language of the contract when determining the language of the arbitration (see, e.g., Article 20 of the ICC Arbitration Rules), it is still possible that the arbitration is conducted in more than one language. In this case, the need for translation will probably arise.

It should be noted that translations of commercial and legal terms incorporated in the original contract must be carefully translated in order to avoid misinterpretation of relevant provision(s).

Documentary Evidence

Translated documents can be an important part of evidence. For instance, parties may submit communications, letters, emails, WhatsApp messages, Tweets, certificates, licences, press releases, official documents such as court decisions, and any other document that they deem relevant for the case. In this respect, Article 3.12(e) of the IBA Rules on the Taking of Evidence in International Arbitration expressly stipulates that “[d]ocuments in a language other than the language of the arbitration that are submitted to the Arbitral Tribunal shall be accompanied by translations marked as such.[10]

The translation of documentary evidence becomes part of the fact-finding process.[11] In other words, the translation will affect the contents of the evidence and fall within the scope of soft law instruments on evidence, such as the IBA Rules on the Taking of Evidence in International Arbitration. Thus, the translation of any supporting document into the language of the arbitration may be challenged by the opposing party.

In all of these cases, the translators selected should ideally have the right expertise and training to understand the subtleties of one country’s legal system and the meaning of relevant legal expressions, while counsel should be judicious in determining what documents warrant production and translation given the additional time and costs that are involved when producing evidence in a foreign language.

Translation of Witness Statements and Expert Reports in International Arbitration

The presentation of witnesses and experts is another area where language issues may be particularly significant.

If a witness is not proficient in the language of the arbitration, the best course of action is to request the witness to prepare his/her statement in his/her native tongue, and to submit the original accompanied by a good translation.[12] This will increase the chances of the witness being truly comfortable with providing testimony at the evidentiary hearing.[13] As one commentator notes, the most significant value of an oral statement is effective communication,[14] thus, if the witness is not comfortable in testifying in the language of the arbitration, he/she should not hesitate to call for an interpreter with appropriate expertise.

The same considerations are relevant for experts. Expert reports may also be submitted in a foreign language provided that they are accompanied by an accurate translation.

Most of the institutional rules do not make a specific provision regarding translation of witness statements or expert reports. Therefore, it is within the parties’ autonomy to arrange for proper translation and interpretation. In the same vein, it is within the power of the arbitral tribunal to require the party presenting the witness or the expert testimony to supply, at its own expenses, translation and interpretation.[15]

Costs for translators and interpreters appointed by the arbitral tribunal are part of arbitration costs, however. These costs are usually subject to advances on costs to be paid by the parties.[16] For instance, the Administrative and Financial Regulations of the International Centre for Settlement of Investment Disputes (ICSID) provide that the Secretary General may provide translation of documents, or interpretations, as part of the Secretariat’s assistance to tribunals:[17]

The Secretary-General may also provide, by use of the staff and equipment of the Centre or of persons employed and equipment acquired on a short-time basis, other services required for the conduct of proceedings, such as the duplication and translation of documents, or interpretations from and to a language other than an official language of the Centre.

The Swiss Rules of International Arbitration, in turn, merely provide that “[a]rrangements shall be made for the translation of oral statements made at a hearing […] if this is deemed necessary by the tribunal.[18]

Simple or Sworn Translations in Arbitration?

Most arbitration rules do not require certified translations to be made, unless the tribunal decides to order them. Some domestic legislations, however, require all translations to be made by an “authorized” translator.[19] In such a case, proceedings seated in these jurisdictions are bound by this requirement.[20]

Arbitral tribunals are also empowered to decide on the appropriate means to deal with suspicious translations, which can and do occur. For example, tribunals may order sworn translations to be produced (in the case where only unofficial translations were provided), appoint a specific translator or interpreter, or simply draw adverse inferences on some excerpts, especially where the opposing party identifies serious substantive errors in the translations.[21]

Additionally, although there is a prima facie presumption that parties are acting in good faith (throughout the proceeding), anyone who speaks a foreign language knows that words and expressions in one language may not capture the perfect meaning of another language. Thus, the opposing party can always challenge the contents of any translation has been submitted. Even members of the arbitral tribunal may raise questions regarding the translation if they are familiar with the original language of the document.[22] More than one case has, in fact, turned on questionable translations, so reviewing the propriety of translations is important.

On the other hand, domestic courts typically require documents to be officially translated. For the enforcement of arbitral awards, courts typically accept the official translation to be made either in the country in which the award was rendered, or in the country where the enforcement is sought, or for the translation to be certified by a sworn translator of either country.[23] The certification by a diplomatic body, in this case, may be sufficient.[24]


One cannot overemphasize the importance of appropriate translations in international arbitration. Inaccurate translations can lead to additional time spent on reviewing incomprehensible text and jargon, and can undermine a sound case.

In order to reduce the impact of mistranslations, parties should ideally

(1) designate one language for the arbitration,

(2) appoint arbitrators who are fluent in the chosen language, and

(3) whenever translations are needed, look for professionals who are very familiar with the relevant legal terminology in both the original and target languages.[25]

[1]             Sally A. Harpole, “Language in Arbitration Procedure: A Practical Approach For International Commercial Arbitration” 9(2) CAA Journal, p. 274.

[2]             Ibid.

[3]             UNCITRAL Arbitration Rules (as adopted in 2013), Annex.

[4]             ICDR Arbitration Rules, p. 8 (emphases added).

[5]             ICC Arbitration Rules, Article 20 (emphases added).

[6]             UNCITRAL Arbitration Rules, Article 19.1 (emphasis added).

[7]             UNCITRAL Arbitration Rules, Article 19.2 (emphasis added).

[8]             Chang-fa Lo, “Beyond Semantics and Semiotics – Arguing for a Clearer Set of Arbitration Rules on the Issue of Translation and Language Interpreting” 9(2) CAA Journal, p. 203.

[9]             Vienna Convention on the Law of Treaties, Article 85.

[10]            IBA Rules on the Taking of Evidence in International Arbitration, Article 3.12(e).

[11]            Chang-fa Lo, “Beyond Semantics and Semiotics – Arguing for a Clearer Set of Arbitration Rules on the Issue of Translation and Language Interpreting” 9(2) CAA Journal, p. 207.

[12]            C. Tahbaz, “Cross-Cultural Perspectives on Effective Advocacy in International Arbitration – or, How to Avoid Losing in Translation” 14(2) Asian Dispute Review, p. 53.

[13]            Ibid.

[14]            Ibid.

[15]            Joshua Karton, “Reducing the Impact of Mistranslated Testimony in International Arbitral Hearings” 9(2) CAA Journal, p. 231.

[16]            Ibid.

[17]            ICSID Administrative and Financial Regulations, Article 27 (emphases added).

[18]            Swiss Rules of International Arbitration, Article 27.6.

[19]            Joshua Karton, “Reducing the Impact of Mistranslated Testimony in International Arbitral Hearings” 9(2) CAA Journal, p. 230.

[20]            Ibid.

[21]            See, e.g., Chang-fa Lo, “Beyond Semantics and Semiotics – Arguing for a Clearer Set of Arbitration Rules on the Issue of Translation and Language Interpreting” 9(2) CAA Journal, p. 210.

[22]            Ibid.

[23]            Albert Jan Van den Berg (ed.), ‘406 Conditions for Enforcement – Translation’ in Yearbook Commercial Arbitration 1996 – Volume XXI, p. 476.

[24]            Ibid.

[25]            Joshua Karton, “Reducing the Impact of Mistranslated Testimony in International Arbitral Hearings” 9(2) CAA Journal, p. 227.

Arbitrage international


Expert Evidence in International Arbitration


Expert evidence is frequently used in international arbitration. Experts are normally appointed by parties to give their independent opinion on issues beyond the arbitral tribunal’s expertise, such as quantum, delays and “foreign” law, thereby assisting the arbitral tribunal in its decision-making process.

Party-Appointed Experts vs. Tribunal-Appointed Experts

In international arbitration, there are generally two main categories of experts, which derive from the two primary systems of law: party-appointed experts, which are commonly found in common law jurisdictions, and tribunal-appointed experts, which are more commonly used in civil law jurisdictions.

Party-appointed experts are the norm in international arbitration. Tribunal-appointed experts appear far less frequently in practice, normally either in situations where the parties have not appointed their own experts, yet the arbitral tribunal considers that it would benefit from expert analysis, or in situations where the parties have produced conflicting expert reports.

In theory, parties also have the option to appoint a single joint expert. This is very rare in practice, however, as it is highly unlikely that parties with conflicting interests would agree on a single expert.

Disputes Commonly Requiring Expert Evidence in International Arbitration

Arbitral tribunals can benefit from expert evidence in a wide range of disputes, including construction, mining, commodities, as well as energy disputes, amongst others.

In a 2018 LCIA Note on Experts in International Arbitration, the LCIA has indicated, in this respect, that “[m]ost, if not all,” of its registered arbitrations involve the use of experts, which “offer their expertise in a myriad of fields, from agriculture to biotechnology, engineering, and of course economics and accountancy.

Expert evidence is also appropriate for calculating damages, which are a critical component of most arbitration cases (you may also refer to our commentary on whether it is worth pursuing an international arbitration for small claims, i.e., claims valued at less than USD 50,000). Quantum experts are normally appointed when complex calculations are involved or access to specific information is required, for instance, pricing data to determine the market price in commodity arbitrations, commonly governed by the English 1979 Sale of Goods Act, where damages are prima facie ascertained by the difference between the contract price and the market price of the goods in question (see Section 50(3) and Section 51(3) of the 1979 Sale of Goods Act).

Expert evidence is also sometimes warranted for issues of “foreign” law, i.e., the law of a jurisdiction in which the members of the arbitral tribunal are not themselves qualified or with which they are not familiar.

Who Can Be Appointed as an Expert in International Arbitration?

There are several providers, both firms and independent practitioners, offering expert services for international arbitrations for a wide range of budgets. Counsel in international arbitration will normally assist parties to choose and instruct an appropriate expert for their case.

For a conservative choice, a party seeking to instruct an expert may refer to the GAR 100 Expert Witness Firms’ Power Index published by the Global Arbitral Review, which lists prominent expert firms by looking at the volume and value of two years’ worth of hearings and at “reputational clout”. For instance, in 2021, FTI Consulting, Compass Lexecon and Kroll made it to the top 3. HKA, PwC and Deloitte LLC are also included in the Index, amongst other firms.

Ultimately, what matters most is the individual experts who are actually staffed on the matter, however. Independent practices can be equally competent and are often more cost-effective compared to older, larger firms.

As expert evidence is, in any event, usually costly, parties sometimes decide to substitute expert evidence with the evidence of a fact witness, for instance, an employee of a party who has the required technical knowledge. When possible, this should be avoided, however, as arbitral tribunals are unlikely to rely solely on expert opinion provided in-house (which inherently lacks impartiality), compared to expert opinion provided by a third, independent party. That said, if the facts speak for themselves and do not require non-obvious interpretation, i.e., expert opinion is not required, a fact witness may serve in a similar role as an expert, for instance to quantify losses.

There are better ways of effectively reducing the costs of an international arbitration, however, such as choosing cost-effective counsel, considering that legal fees traditionally account for the vast majority of the cost of international arbitration.

Who Pays for Experts in International Arbitration?

Parties choose the expert they wish to appoint and pay for his/her fees and expenses. The fees of a party-appointed expert cannot be linked to the outcome of the case, however, in order to preserve the impartiality and independence of the expert.

The reasonable costs of a party-appointed expert are also normally recoverable from the losing party. Parties normally also bear the costs of the expert appointed by the tribunal. For instance, Section 37(2) of the 1996 Arbitration Act provides, in this respect, that the fees and expenses of a tribunal-appointed expert are considered “expenses of the arbitrators” and are thus paid by the parties.

What Does an Expert Do in International Arbitration?

Party-appointed experts in international arbitration are typically required to draft one or two expert reports (i.e., a main expert report and, if needed, a rebuttal expert report) and to provide oral testimony at the final hearing.

The written expert reports are either exchanged simultaneously or submitted by each party along with their main submissions. Experts are also required to appear at the final hearing to provide oral testimony, to answer any questions the arbitral tribunal may have, and to be cross-examined by the opposing party’s counsel.

In practice, experts are often also asked to provide, at the final hearing, a short presentation of their report, for instance, in the form of a PowerPoint presentation. Parties and tribunals may also agree on expert “hot-tubbing”, i.e., a procedure where both experts provide evidence concurrently, so that they can engage in discussion and address questions in parallel from both the arbitral tribunal and counsel, instead of being cross-examined separately by counsel.

Arbitration Laws and Rules Governing Expert Evidence in International Arbitration

As will be explained below, it appears that, while most arbitration laws and rules contain specific provisions for tribunal-appointed experts, these laws and rules do not have specific provisions for party-appointed experts. It can also be observed that party-appointed experts are often regulated in provisions that also refer to witnesses of fact.

Fact and expert witnesses shall not be treated as equal, however, as they serve different purposes, i.e., fact witnesses cover gaps in documentary evidence, whereas expert witnesses cover gaps in technical knowledge. Also, expert evidence has, in principle, greater evidentiary value compared to witness evidence, given that experts are usually third, independent parties, whereas witnesses are normally representatives or employees of the parties.

Ultimately, arbitral tribunals normally have discretion to access the admissibility, strength and relevance of the evidence submitted by the parties, be it expert reports, witness statements or documents (see, for instance, Section 34 of the 1996 English Arbitration Act, which provides that “[i]t shall be for the tribunal to decide all procedural and evidential matters”).

1) Regulatory Framework for Party-Appointed Experts

Even though experts are routinely appointed by parties in international arbitration, national arbitration laws (such as the 1996 English Arbitration Act) and arbitration rules are either silent or do not appear to have a precise procedural framework in place for party-appointed experts. For instance, Article 25(2) (Establishing the Facts of the Case) of the 2021 ICC Arbitration Rules only implicitly refers to the right of the parties to appoint experts, by providing that the “tribunal may decide to hear witnesses, experts appointed by the parties or any other person, in the presence of the parties, or in their absence provided they have been duly summoned.” Similar provisions are found in other prominent ad hoc and institutional arbitration rules, such as Article 27(2) (Evidence) of the 2013 UNCITRAL Arbitration Rules, Article 20(1) (Witnesses) of the 2020 LCIA Arbitration Rules and Article 33(1) (Witnesses) of the 2017 SCC Arbitration Rules.

2) Regulatory Framework for Tribunal-Appointed Experts

Even though tribunal-appointed experts are far less common in practice than party-appointed experts, slightly more detailed provisions referring to tribunal-appointed experts are found in national laws (for instance, Section 37 (Power to Appoint Experts, Legal Advisers or Assessors) of the 1996 English Arbitration Act), as well as in arbitration rules, for instance, Article 21 (Expert to Arbitral Tribunal) of the 2020 LCIA Arbitration Rules and Article 29 (Experts Appointed by the Arbitral Tribunal) of the 2013 UNCITRAL Arbitration Rules.

The 2016 UNCITRAL Notes on Organizing Arbitral Proceedings also contain, in Note 15 (Experts), further guidelines on the use of both party-appointed and tribunal-appointed experts.

Soft Law Instruments Governing Expert Evidence in International Arbitration

The lack of a comprehensive regulatory framework for expert evidence (particularly party-appointed experts) is addressed by soft law instruments, which contain more detailed provisions for the use of experts than most arbitration laws and rules. Some of these soft law instruments are examined below.

1) IBA Rules on Evidence

The IBA Rules on the Taking of Evidence in International Arbitration, which were last revised in 2020 (“IBA Evidence Rules”), set out in Article 5 (Party-Appointed Experts) and Article 6 (Tribunal-Appointed Experts) a more detailed procedure for the use of expert evidence in international arbitration. Article 5(2) of the 2020 IBA Evidence Rules lists what should be included in an expert report, including, inter alia, the qualifications of the expert, a statement of independence, as well as a description of the method, evidence and information used by the expert in arriving at its conclusions. While the IBA Evidence Rules are a soft law instrument (i.e., they do not have legally binding force, as the law of the seat of arbitration has, for instance), they are highly relevant as they reflect prevailing practices in international arbitration, and arbitral tribunals often stand guided by them or directly refer to them in their procedural orders (you may also read our commentary on the revisions of the 2020 version of the IBA Evidence Rules).

2) CIArb Practice Guideline and Protocol on Experts

The Chartered Institute of Arbitrators (known as CIArb) has also published a useful Practice Guideline for Party-Appointed and Tribunal-Appointed Experts (the “CIArb Guideline”) which includes in Appendix I a Protocol for the Use of Party-Appointed Expert Witnesses in International Arbitration (the “CIArb Protocol”).

The CIArb Guideline provides guidance on the powers to appoint an expert (Article 1), on how to assess the need for expert evidence (Article 2), on methods of adducing expert evidence (Article 3), on procedural directions for experts (Article 4) and on testing the experts’ opinions (Article 5).

The CIArb Protocol is structured along similar lines to the IBA Evidence Rules, but it applies only to party-appointed experts and does not cover tribunal-appointed experts. The CIArb Protocol comprises eight Articles governing, inter alia, matters of independence (Article 4), privilege (Article 5) and the form of the expert’s declaration (Article 8). The CIArb Protocol is intended “to supplement the legal provisions and the institutional or ad-hoc rules” (Preamble, para. 1) and it can be either adopted by the arbitral tribunal “in whole or in part” or it may be used as a guideline for adopting bespoke procedures (Preamble, para. 2.).

3) ASA Arbitration Toolbox

The Swiss Arbitration Association has also published on its free, interactive platform known as ASA Arbitration Toolbox (see Introduction to the ASA Arbitration Toolbox), a Template Expert Report, containing basic information which shall be included in an expert report, as well as Drafting Tips for Expert Reports, the first of which is that counsel should first meet with the expert to establish that the expert endorses the appointing party’s position.

Criticism of Expert Evidence in International Arbitration

1) Criticism Towards Party-Appointed Experts

Concerns have been raised within the arbitration community regarding the independence and impartiality of party-appointed experts in international arbitration, given that party-appointed experts normally support the appointing party’s position, and hence they might be perceived as “hired-guns” or additional “advocates” for the parties. Expert reports produced in certain cases have also been criticized for being long and chaotic (for instance, in complex construction arbitrations, which are usually fact-intensive), thereby driving up costs and delaying the proceedings.

Conflicting expert opinions from opposing experts on the same issues (which are not uncommon) can also be counterproductive and undermine the very purpose of having expert evidence in the first place, which is to assist the arbitral tribunal in its decision-making process.

There are, nevertheless, available remedies to reduce the divergence of expert reports, for instance, having experts meet and produce a joint list of agreed/disagreed points (see Article 5(4) of 2020 IBA Evidence Rules) or (to take it one step further) having experts issue a joint statement, both of which may be productive, albeit not always feasible in practice.

2) Criticism Towards Tribunal-Appointed Experts

Tribunal-appointed experts are also met with scepticism by parties, who, in any event, may decide to appoint their own experts to support their case. Concerns are also raised in terms of whether the arbitral tribunal is essentially delegating its decision-making function to the appointed expert, which can give rise to arguments for contesting the validity and enforceability of the resulting final award, as well as the parties’ lack of control over the costs of such experts.

* * * *

In summary, party-appointed experts are very frequently used in international arbitration, despite the lack of a detailed regulatory regime for party-appointed experts and the ongoing criticism towards the use of expert evidence in general. The frequent appointment of experts is arguably warranted in order to assist an arbitral tribunal in reaching a decision on matters beyond its expertise, especially in light of the number of arbitration disputes that turn on complex technical, legal or quantum issues.

2021 International Arbitration Survey – Adapting Arbitration to a Changing World



The twelfth empirical study of the School of International Arbitration, Queen Mary University of London, in partnership with White & Case LLP, the 2021 International Arbitration Survey (“International Arbitration Survey”), explores recent trends in international arbitration and especially how international arbitration practice has adapted and continues to adapt to the global changes wrought by the COVID-19 pandemic.

The 2021 International Arbitration Survey has seen the widest pool of respondents to date, with more than 1,200 written responses and almost 200 oral interviews with different stakeholders from around the world. At these times of continued uncertainty, the results of the survey are particularly important as they reflect some of the major changes in international arbitration practice, demonstrating that, thanks to its inherent flexibility, international arbitration has managed to keep pace with and rapidly adapt to the altering global circumstances.

The Most Preferred Seat of Arbitration

A notable development in comparison to previous years is the change in the ranking of the most popular seats of arbitration. The five most preferred seats of arbitration remained London, Singapore, Hong Kong, Paris and Geneva. The top five choices do not come as a surprise looking at previous surveys. What is an interesting change, however, is the notable rise of Asia, including Singapore and Hong Kong, as international arbitration hubs. This is the first time that Singapore, for instance, shares the top position with London – as both have been chosen as top picks by 54% of respondents. The increase in popularity of Asia as an arbitration hub is also demonstrated by Hong Kong being in third place (50% of respondents), followed by Paris in fourth place (35% of respondents), and Geneva in fifth place (13% of respondents). Other traditional seats of arbitration, such as New York, continued to gain popularity (12% of respondents), whereas Stockholm dropped from seventh place to ninth place in comparison to the results from previous years (merely 6% of respondents). While the survey cannot be said to be scientific, it does suggest an increasing preference for seats of arbitration in Asia, largely at the expense of Europe.

The 2021 International Arbitration Survey further reveals that, while the “global powerhouse” seats of arbitration continue to be popular, there are many regional seats which are growing in reputation and popularity. These include, for instance, for the African Region – Cairo and Nairobi, for the Asia–Pacific Region – Shenzhen, and for the Caribbean/Latin American Region – São Paolo, Miami, Madrid and Lima.

The Most Preferred Arbitral Institutions

The ICC was indicated by a majority of the respondents as the preferred arbitral institution (57%), closely followed by the SIAC (49%), the HKIAC (44%) and the LCIA (39%). Interestingly, this year the CIETAC has also made it to the top-five most preferred seats of arbitration for the first time (17%). Other institutions which fall within the top ten picks include the ICSID (11%), the SCC (7%), the ICDR (6%), the PCA (5%) and the LMAA (5%) (on “How to initiate LMAA Arbitration” see our previous comments). The results of the survey show a general trend, also noticeable in 2018, of a significant increase in the popularity of both the SIAC and the HKIAC and, as of recently, also the CIETAC. Another noticeable development is a drop in the popularity of the LCIA and the ICC (for instance, the ICC dropped considerably from 77% in 2018 to merely 57%).

When respondents were asked about their top choice adaptation that, in their opinion, would make other seats or arbitration rules more  attractive, most respondents chose “administrative/logistical support for virtual hearings” as their top choice. The second criterion was the arbitration center’s commitment to a more diverse pool of arbitrators. The UNCITRAL Arbitration Rules remained the most popular rules for ad hoc arbitrations.

Arbitral Tribunals: Diversity

Diversity in international arbitration was unsurprisingly also one of the topics included in the survey. While 61% of respondents agreed that some progress has been made in relation to gender diversity, this was notably not the case for other categories, such as geographic, age, cultural and particularly ethnic diversity. In fact, in relation to geographic, age, cultural and ethnic diversity, less than 1/3 of respondents agreed that some progress has been made. Respondents were also asked which initiative they considered to be most effective in encouraging greater diversity in terms of arbitral appointments. The majority of respondents indicated that “appointing authorities and institutions adopting an express policy of suggesting and appointing diverse candidates as arbitrators” played a major role (59%). Many respondents also felt that opportunities to increase the visibility of diverse candidates should be encouraged through various different initiatives, for instance, through education and promotion of arbitration in jurisdictions with less developed international arbitration networks (38%), more mentorship programs for less experienced arbitration practitioners (36%) and speaking opportunities at conferences for less experienced and more diverse members of the arbitration community (25%).

Use of Technology in International Arbitration

It also comes as no surprise that the International Arbitration Survey found  a dramatic increase in the use of virtual hearing rooms, with 72% of users indicating that they have participated in virtual hearing rooms. The use of virtual hearing rooms is a direct result and best example of how the practice of international arbitration has rapidly adapted to the COVID-19 pandemic. Respondents were also asked a frequent question most practitioners faced (and are still facing) during the pandemic, namely, if the hearing can no longer be held in person, would they rather postpone the hearing or proceed with a virtual hearing. 79% of respondents indicated that they would rather proceed at the scheduled time with a “virtual hearing”, while only 16% would prefer to postpone the hearing until it could be held in person. Merely 4% of respondents indicated that they would proceed with a documents-only award.

When asked about the biggest advantages and disadvantages of virtual hearings, the responses were diverse and included:

Pros of Virtual Hearings

  • The potential for greater availability of dates for hearings (65%);
  • Greater efficiency through the use of technology (58%);
  • Greater procedural and logistical flexibility (55%);
  • Less environmental impact than in-person hearings (34%);
  • Fewer distractions for advocates and arbitrators and the potential to encourage greater diversity across tribunals (13%);
  • Better view of people’s faces than at in-person hearings (12%).

Cons of Virtual Hearings

  • Difficulty of accommodating multiple or disparate time zones and the impression that it is harder for counsel teams and clients to confer during hearing sessions (40%);
  • Difficulty of controlling witnesses and assessing their credibility (38%);
  • Technological malfunctions and/or limitations (including inequality of access to particular and/or reliable technology) and more difficulty for participants to maintain concentration due to “screen fatigue” (35%);
  • Confidentiality and cybersecurity concerns (30%);
  • The view that it is more difficult to “read” arbitrators and other remote participants (27%).

The survey also demonstrates that, moving forward, most respondents would prefer a mixture of in-person and virtual formats for most types of interactions, including meetings and conferences. When it comes to hearings, the central phase for most arbitrations, most respondents would prefer to keep an option of in-person hearings, rather than purely remote ones.

International Arbitration Going “Green”

The International Arbitration Survey has also identified a number of positive changes making arbitration practice more “green” and reducing the environmental impact of international arbitration. These positive changes include, inter alia:

  • Embracing paperless practices – production of documents in electronic format, rather than in hard copy; use of electronic rather than hard-copy bundles; in addition, several arbitral institutions have moved in this direction as well (for instance the 2020 LCIA Rules, which provide for electronic communications by default (Article 4); the same for the 2021 ICC Rules; the SCC platform which started to administer SCC filings since 2019, etc.);
  • More “green guidance” from tribunals in the form of soft law– even though only 13% of respondents declared to have experienced such guidance, 40% indicated that such directions should generally be used;
  • Travelling – the environmental benefits of remote participation and virtual hearings, albeit recognized, are not the main reason behind respondents’ decisions on whether hearings should take place virtually or in-person (only 24% of respondents indicated that environmental considerations are a factor they would take into account).

Nina Jankovic, Aceris Law LLC


Moral Damages in Investment Arbitration



Under public international law, the right to claim moral damages is enshrined in Article 31(2) of the Articles on Responsibility of States for Internationally Wrongful Acts pursuant to which the obligation of a State to make full reparation for the injury by the internationally wrongful act includes “any damage, whether material or moral”. The commentary on this Article specifies that moral damage includes “individual pain and suffering, loss of loved ones or personal affront associated with an intrusion on one’s home or private life.”[1]

The entitlement to compensation for moral damages under public international law was summarized in the Lusitania case, which is frequently cited in caselaw and doctrine, as follows:[2]

That one injured is, under the rules of international law, entitled to be compensated for an injury inflicted resulting in mental suffering, injury to his feelings, humiliation, shame, degradation, loss of social position or injury to his credit or to his reputation, there can be no doubt, and such compensation should be commensurate to the injury. Such damages are very real, and the mere fact that they are difficult to measure or estimate by money standards makes them none the less real and affords no reason why the injured person should not be compensated therefor as compensatory damages, but not as a penalty.

In turn, in investment arbitration, awarding moral damages has been subject to controversy.[3] In fact, investment arbitration has been perceived as an alternative dispute resolution method for economic matters only permitting foreign investors to seek compensation for harm caused by a host State in the form of, for instance, damage to property or business interest.[4] However, it has become rather common that, along with economic or material damages, investors seek compensation for moral damages, most commonly for loss of reputation caused by host State measures. For instance, in the Desert Line v. Yemen case, the claimant sought compensation for moral damages including loss of reputation. More particularly, the claimant argued that, as a result of Yemen’s breaches of its obligation under the BIT at stake “the Claimant’s executives suffered the stress and anxiety of being harassed, threatened and detained by the Respondent as well as by armed tribes; the Claimant has suffered a significant injury to its credit and reputation and lost its prestige; the Claimant’s executives have been intimidated by the Respondent in relation to the Contracts.”[5]

In a few rare cases, moral damages have also been sought by the host State against the investor. For instance, in the Cementownia v. Turkey case, Turkey argued that “Cementownia’s conduct […] has been egregious and malicious. It has asserted and pursued a baseless claim and it has made spurious allegations against Turkey with the intent of damaging its international stature and reputation.[6]

In the following paragraphs, we will discuss how claims for moral damages have been handled by arbitral tribunals in investment arbitration and what criteria of assessment they usually apply.

Moral Damages as an Exceptional Remedy

Granting moral damages is in principle possible in investment arbitration. The arbitral tribunal in the Desert Line v. Yemen case held that “[e]ven if investment treaties primarily aim at protecting property and economic values, they do not exclude, as such, that a party may, in exceptional circumstances, ask for compensation for moral damages. It is generally accepted in most legal systems that moral damages may also be recovered besides pure economic damages. There are indeed no reasons to exclude them.[7] In the same vein, the arbitral tribunal in the Cementownia v. Turkey case ruled that there “is nothing in the ICSID Convention, Arbitration Rules and Additional Facility which prevents an arbitral tribunal from granting moral damages.[8]

However, arbitral tribunals have been rather unanimous that moral damages shall be awarded only in exceptional circumstances[9] requiring  a high threshold,[10] which makes the granting of moral damages rare in practice. In fact, only a handful of arbitral tribunals have awarded moral damages to date.[11]

The term “exceptional circumstances” has given room to various interpretations. The arbitral tribunal in the Lemire v. Ukraine case held that in order to establish exceptional circumstances the following test needs to be met:[12]

  • the State’s actions imply physical threat, illegal detention or other analogous situations in which ill-treatment contravenes the norms according to which civilized nations are expected to act;
  • the State’s actions cause a deterioration of health, stress, anxiety, other mental suffering such as humiliation, shame and degradation, or loss of reputation, credit and social position; and
  • both cause and effect are grave or substantial.

Subsequent tribunals, such as the Arif v. Moldova tribunal, have criticized the approach taken by the Lemire tribunal considering it to be rather restrictive. The tribunal noted that “the formulation of the principles of the award of moral damages in Lemire was based on a limited discussion of three cases, with no broader consideration of underlying principles or policies. The statement might serve as a summary of the issues in these cases, but it should not be taken as a cumulative list of criteria that must be demonstrated for an award of moral damages.[13] It then concluded that the tribunal disposed “of discretion, but within the general framework that moral damages are an exceptional remedy.”[14]

Claims for Moral Damages by a Legal Person

The right to seek compensation for moral damages by a legal person does not seem to be particularly challenged in investment arbitration. For instance, the arbitral tribunal in the Oxus v. Uzbekistan case held that “[m]oral damages have been considered admissible under international law and it is recognized that legal persons may be awarded moral damages, including loss of reputation, but the bar for recovery of such damages has been set high and they have been awarded only in exceptional circumstances.[15]

Valuation of Moral Damages

One of the most peculiar issues regarding moral damages is determining their quantum. As noted in the Lusitania case, the calculation of damage for moral injury “is manifestly impossible to compute mathematically or with any degree of accuracy or by any use of any precise formula”.[16] In the same manner, the arbitral tribunal in the Desert Line v. Yemen case held that “it is difficult, if not impossible, to substantiate” a moral prejudice[17] and awarded USD 1,000,000 of moral damages in a discretionary manner.

Pure discretion regarding the quantum of moral damages was, however, approached with great caution by some subsequent tribunals. For instance, the arbitral tribunal in the Rompetrol v. Romania case considered that “a purely discretionary award of moral solace would be to subvert the burden of proof and the rules of evidence”.[18]

In this regard, some kinds of moral damages, such as loss of reputation, may be easier to value, since they have an economic underpinning. As stressed by Marboe, these damages “have a dual character and can be part of a claim for material and for moral damage. As the threshold for moral damages is high, it might be possible to formulate some of those claims as material damages.[19]


In summary, claims for moral damages are recognized in investment arbitration as well as under public international law. However, a high threshold is applied meaning that moral damages are granted only in exceptional circumstances and assessed on a case-by-case basis, which makes their granting rather rare. Their exceptional character is also linked to the difficulties of their quantification, although several arbitral tribunals have confirmed having discretion in this regard.

[1] Draft Articles on Responsibility of States for Internationally Wrongful Acts, with commentaries, Article 31, p. 92, para. 5.

[2] Opinion in the Lusitania cases (United States v. Germany), Decision of the Mixed Claims Commission of 1 November 1923, 7 RIAA, p. 40.

[3] See, e.g., Getma International v. The Republic of Guinea, ICSID Case No. ARB/11/29, décision du tribunal, 16 August 2016, para. 453.

[4] I. Marboe, “Calculation of Compensation and Damages in International Investment Law”, Oxford University Press (2017), 2nd ed., para. 5-342.

[5] Desert Line Projects LLC v. The Republic of Yemen, ICSID Case No. ARB/05/17, décision du tribunal, 6 February 2008, para. 286.

[6] Cementownia “Nowa Huta” S.A. v. Republic of Turkey, ICSID Arbitration Case No. ARB(AF)/06/2, décision du tribunal, 17 September 2009, para. 165.

[7] Desert Line Projects LLC v. The Republic of Yemen, ICSID Case No. ARB/05/17, décision du tribunal, 6 February 2008, para. 289.

[8] Cementownia “Nowa Huta” S.A. v. Republic of Turkey, ICSID Arbitration Case No. ARB(AF)/06/2, décision du tribunal, 17 September 2009, para. 169.

[9] See, e.g., Desert Line Projects LLC v. The Republic of Yemen, ICSID Case No. ARB/05/17, décision du tribunal, 6 February 2008, para. 289; Joseph Charles Lemire v. Ukraine, ICSID Case No. ARB/06/18, décision du tribunal, 28 March 2011, para. 326; Mr. Franck Charles Arif v. Republic of Moldova, ICSID Case No. ARB/11/23, 8 April 2013, para. 584; Quiborax S.A. v. Plurinational State of Bolivia, ICSID Case No. ARB/06/2, décision du tribunal, 16 September 2015, para. 618; Oxus Gold v. The Republic of Uzbekistan, ad hoc (UNCITRAL), Final décision du tribunal, 17 December 2015, para. 895.

[10] See, e.g., Quiborax S.A. v. Plurinational State of Bolivia, ICSID Case No. ARB/06/2, décision du tribunal, 16 September 2015, para. 618.

[11] See, e.g., Desert Line Projects LLC v. The Republic of Yemen, ICSID Case No. ARB/05/17, décision du tribunal, 6 February 2008; Von Pezold v. Republic of Zimbabwe, ICSID Case No. ARB/10/15, décision du tribunal, 28 July 2015.

[12] Joseph Charles Lemire v. Ukraine, ICSID Case No. ARB/06/18, décision du tribunal, 28 March 2011, para. 333.

[13] Mr. Franck Charles Arif v. Republic of Moldova, ICSID Case No. ARB/11/23, décision du tribunal, 8 April 2013, para. 590.

[14] Mr. Franck Charles Arif v. Republic of Moldova, ICSID Case No. ARB/11/23, décision du tribunal, 8 April 2013, para. 591.

[15] Oxus Gold v. The Republic of Uzbekistan, ad hoc (UNCITRAL), Final décision du tribunal, 17 December 2015, para. 895.

[16] Opinion in the Lusitania cases (United States v. Germany), Decision of the Mixed Claims Commission of 1 November 1923, 7 RIAA, p. 36.

[17] Desert Line Projects LLC v. The Republic of Yemen, ICSID Case No. ARB/05/17, décision du tribunal, 6 February 2008, para. 289.

[18] The Rompetrol Group N.V. v. Romania, ICSID Case No. ARB/06/3, décision du tribunal, 6 May 2013, para. 289.

[19] I. Marboe, “Calculation of Compensation and Damages in International Investment Law”, Oxford University Press (2017), 2nd ed., para. 5-364.



Who Can Be an Arbitrator in International Arbitration?



In the not-too-distant past, there were only a few individuals acting regularly as arbitrators in international arbitration. Similarly, law firms engaged in international arbitration could be counted on the fingers of one hand. Unsurprisingly, there were a very small number of individuals, generally well-connected, who were called upon to act as arbitrators.

This trend, however, has been reversed by the increase of international trade and the increasing use of alternative dispute resolution by international companies to resolve disputes. With the New York Convention on the Enforcement of Foreign Arbitral Awards of 1958 being ratified by 169 States, recently including the Republic of Iraq on 13 May 2021, enforcement is simplified for disputes involving international business transactions in the most far-flung corners of the world. As the number of international commercial arbitration cases is growing, inexorably, experienced practitioners and more specifically arbitrators are needed.[1]

Pursuant to the well-recognized principle of freedom of choice, parties can agree on the person who will arbitrate their dispute, meaning that most adults of a sound mind can theoretically serve as arbitrators. In practice, however, arbitrators are frequently lawyers, retired judges, or business professionals expert in a particular field. Moreover, even if the parties are free to agree on arbitrators, States and international institutes typically impose restrictions or requirements for individuals to act as arbitrators, some of which are described below.

Becoming an Arbitrator for the International Centre for Settlement of Investment Disputes

The International Centre for Settlement of Investment Disputes (the “ICSID”) proposes a Panel of Arbitrators composed of designees of the ICSID, Contracting States and the Chairman of the Administrative Council. To become a Panel member, applicants need to possess the qualifications specified under Article 14 of the ICSID Convention, which reads as follows:

(1) Persons designated to serve on the Panels shall be persons of high moral character and recognized competence in the fields of law, commerce, industry or finance, who may be relied upon to exercise independent judgment. Competence in the field of law shall be of particular importance in the case of persons on the Panel of Arbitrators.

(2) The Chairman, in designating persons to serve on the Panels, shall in addition pay due regard to the importance of assuring representation on the Panels of the principal legal systems of the world and of the main forms of economic activity.

Further to the qualifications listed in Article 14 of the ICSID Convention, the ICSID considers that the following attributes are “highly desirable for designees”:[2]

  • knowledge of and experience with international investment law;
  • knowledge of and experience with public international law;
  • experience and expertise in international arbitration or conciliation;
  • ability to conduct an arbitration or conciliation and write an arbitral award or report in one or more of the Centre’s official languages (English, French and Spanish);
  • availability to accept appointments in cases as of the date of designation;
  • availability and willingness to travel for case proceedings.

It shall be noted that arbitrators appointed outside the Panel of Arbitrators must still possess the qualities of a person eligible to serve on it.

Regarding arbitrators appointed under the UNCITRAL Rules, pursuant to Article 6, paragraph 7 of the Rules, “The appointing authority shall have regard to such considerations as are likely to secure the appointment of an independent and impartial arbitrator and shall take into account the advisability of appointing an arbitrator of a nationality other than the nationalities of the parties.” In other terms, arbitrators must be independent and impartial.

Becoming an Arbitrator at the International Chamber of Commerce

Regarding the International Chamber of Commerce (the “ICC”), arbitrators may be appointed by the ICC Court directly or upon the proposal of an ICC National Committee. They also may be nominated by claimants, respondents, the parties or co-arbitrators.[3]

Parties have the right to designate arbitrators of their choice. However, the ICC insists on the importance of independence and impartiality of the arbitrators chosen.[4] The Centre proposes to select the right arbitrator for the parties based on its global network. In this regard, the ICC keeps a public database of arbitrators.

The ICC has created the Advanced Arbitration Academy for individuals wishing to become an arbitrator. The Advanced Arbitration Academy is a professional training program allowing participants to acquire strong knowledge of arbitration procedures and techniques on an international level. During the Academy, participants perform tasks that arbitrators normally do. They also follow courses on Case Management, Provisional Remedies and Security for Costs, Evidence, Hearing, Award, Scrutiny, Notification of the Award, Enforcement, etc. The first ICC Advanced Arbitration Academy was created for Central and Eastern Europe in 2014. The comprehensive one-day workshops started on 28 March 2014.[5] In 2016, the ICC Advanced Arbitration Academy was also implemented in Latin America and the MENA region.[6]

Becoming an Arbitrator for the International Centre for Dispute Resolution

To join the Panel of Arbitrators and Mediators of the International Centre for Dispute Resolution (the “ICDR”), applicants must meet or exceed several criteria.[7]

First, regarding Education and Training, candidates need to fulfil the following requirements:

  • Minimum of 15 years of senior-level business or professional experience;
  • Educational degree(s) and/or professional license(s) appropriate to his/her field of expertise;
  • Honors, awards, and citations indicating leadership in his/her field;
  • Training and substantial experience in arbitration, mediation, and/or other forms of out-of-court dispute resolution;
  • Membership in a professional association(s); and
  • Other relevant experience or accomplishments (e.g., published articles).

Second, applicants must be neutral. More specifically, they must be free from bias and prejudice. They shall have the ability to evaluate and apply legal, business or trade principles.

Third, candidates shall present judicial capacity (the ability to manage the hearing process and perform a thorough and impartial evaluation of testimony and other evidence).

Fourth, applicants must be held in the “highest regard by peers for integrity, fairness, and good judgment” and respect “the AAA® Code of Ethics for Arbitrators and/or Standards of Conduct for Mediators”.

Fifth, they must show a willingness to (i) devote time and effort when selected to serve, and (ii) participate in continuing education programs pursuant to ICDR Guidelines.

Finally, applicants shall:

  • submit letters of recommendation from at least three professionals in their field;
  • submit a personal letter explaining why they should be admitted to the ICDR International Panel of Arbitrators and Mediators;
  • submit a copy of their curriculum vitae; and
  • complete the ICDR’s Panel Application form.[8]

Becoming an Arbitrator at the Singapore International Arbitration Centre

As is the case for the ICDR and the ICSID, there is a Panel of Arbitrators overseen by the Singapore International Arbitration Centre (the “SIAC”). To be admitted to the Panel, applicants “must demonstrate an appropriate level of expertise and experience in international arbitration and be of good standing and character.[9]

Applicants must, at a minimum, fulfil the following criteria:[10]

  • tertiary education;
  • at least 10 years post-qualification experience;
  • a fellowship from the Chartered Institute of Arbitrators, Singapore Institute of Arbitrators or any comparable professional arbitration institute;
  • experience as an arbitrator in five or more cases;
  • completed at least two commercial arbitral awards; and
  • be aged between 30 and 75 years.

The admission of individuals to the SIAC Panel of Arbitrators is subject to the “absolute discretion” of the SIAC.[11] To admit or refuse a candidate, the Centre will take into account his/her experience and the actual number of arbitrators on the Panel from the country the candidate is resident.

Paragraph 7 of the Standards for Admission to the SIAC Panel/SIAC IP Panel specifies the necessary steps to submit an application:

If you wish to make an application, please send the completed application form and your curriculum vitae in the attached template highlighting your arbitration experience, together with a non-refundable processing fee of S$535.00 (being S$500 plus 7% Goods and Services Tax (“GST”) which is applicable to both local as well as overseas applicants) to the Registrar, Singapore International Arbitration Centre, 28 Maxwell Road #03-01, Maxwell Chambers Suites, Singapore 069120 or email the application form to, with payment to follow by post, bank transfer or credit card. Your application may also be accompanied with a covering letter and references (if any).

The application and CV template may be found on the SIAC’s website.[12]

Becoming an Arbitrator for the London Court of International Arbitration

The London Court of International Arbitration (the “LCIA”) possesses a database of arbitrators. Contrary to the ICC, the LCIA’s database is confidential and cannot be accessed by parties. Parties can, however, request a list of potential arbitrators suited to the subject matter of their disputes.

If the parties have not agreed on the arbitrators, as they may do, the LCIA will choose the arbitrator to decide the dispute. If the parties have chosen an arbitrator each, then parties may also agree to decide on a third arbitrator to act as chair or request the Centre to nominate the third arbitrator.

The LCIA does not specify the conditions under which an individual will appear in its database of arbitrators. However, even if the parties can agree to choose arbitrators themselves, the LCIA refuses to appoint an arbitrator who is:[13]

  • not impartial or independent from the parties;
  • does not have the necessary experience; or
  • does not have enough time to devote to the arbitration.

Becoming an Arbitrator at the Beijing International Arbitration Centre

The Beijing International Arbitration Centre (the “BIAC”) also has conditions determining whether a person can apply to become an arbitrator. Applicants must meet the conditions defined under Article 13 of the Arbitration Law of China, which are the followings:[14]

  • To have been engaged in arbitration work for at least eight years;
  • To have been as a lawyer for at least eight years;
  • To have served as a judge for at least eight years;
  • To have been engaged in legal research or legal education, possessing a senior professional title; or
  • To have acquired the knowledge of law, engaged in the professional work in the field of economy and trade, etc. possessing a senior professional title or have an equivalent professional level.

Applicants must also comply with the Codes of Enhancing Arbitration Efficiency for Arbitrators.[15]

Finally, applicants need to fill out the Application Form for the BAC/BIAC’s Panel of Arbitrators with their CV and send it to the Centre by email or post.


Parties are free to choose their arbitrators. However, all international institutions impose minimum requirements that an arbitrator be independent and impartial.

To become an arbitrator for international institutions, individuals must present the necessary professional expertise and reputation for work in the field of arbitration. To develop their skills, applicants gain experience through education and work experience, which can take many years.

[1] For instance, in 2020, the ICC Court registered a total of 946 new cases.

[2] See

[3] ICC Rules of Arbitration entered into force on 1 January 2021, Articles 11 to 13.

[4] ICC Rules of Arbitration entered into force on 1 January 2021, Article 11.

[5] See

[6] See

[7] See

[8] ICDR International Arbitrator/Mediator Panel Application Form, pp. 4-5.

[9] Standards for Admission to SIAC Panel/SIAC IP Panel, para 2.

[10] Standards for Admission to SIAC Panel/SIAC IP Panel, para 3.

[11] Standards for Admission to SIAC Panel/SIAC IP Panel, para 4.

[12] SIAC’s application form and CV template.

[13] LCIA Rules, Article 11 – Nomination and Replacement.

[14] Arbitration Law of the People’s Republic of China dated 31 October 1994, Article 13.

[15] Codes of Enhancing Arbitration Efficiency for Arbitrators, Revised and adopted at the 5th Meeting of the Third Session of the Beijing Arbitration Commission on September 16, 2003. Effective as from March 1, 2004.

Filed Under: Arbitrator, ICC Arbitration, ICDR Arbitration, ICSID Arbitration, SIAC Arbitration

International Arbitration


What Do Arbitration Lawyers Do?


It is rather common for international contracts to contain an arbitration clause providing for the institution of arbitration proceedings to resolve disputes between parties.[1] Although parties are not typically required to use lawyers in arbitrations, it is highly recommended for all but the smallest cases.[2] But, in reality, what do arbitration lawyers do? In the following sections, we will envisage the seven principal types of work that arbitration lawyers typically perform to assist their clients.

  1. Arbitration Lawyers Perform Case Assessments

One of the first tasks that an arbitration lawyer should perform is to determine whether an arbitration against an opposing party is worthwhile from a legal, as well as financial, standpoint, and to determine an appropriate case strategy. In this regard, the arbitration lawyers’ job is to:

  • assess the strengths and weaknesses of the client’s legal case, including the claims and defences that can validly be made;
  • assess jurisdictional issues, as well as enforcement issues, that may arise;
  • envisage the opposing party’s likely or actual position, and assess its strengths and weaknesses in turn; and
  • advise the client on whether initiating an arbitration is recommended or not, as well as the potential risks of doing so.

Pre-arbitration case assessment is useful in nearly all cases, both to ensure that a case can soundly be made, or defended, and since many first-time users of arbitration do not understand the full costs of arbitration.[3] The costs of arbitration generally include a flat filing/registration fee payable along with the request for arbitration, administrative costs incurred for the services of the arbitration institution and arbitrators’ fees. Except for the filing fee, which is usually a lump sum, arbitration costs at many institutions are calculated based on the amount in dispute. If the amount in dispute, including both claims and counterclaims, is significant, this may drive up arbitration costs. Many arbitration institutions, such as the ICC, have cost calculators on their websites allowing the parties to estimate the costs. To the costs of arbitration, arbitration legal fees and fees for experts (if needed) are to be added, which may be significant depending on the lawyers and experts retained. Hearing and translation costs, although less significant, should also be taken into account.

That said, if an unmeritorious claim with an unsupported and exaggerated request for compensation is filed, the client may end up paying arbitration costs for a claim whose chances of recovery is rather slim. Pre-arbitration case assessment by competent arbitration lawyers allows the client to avoid such a scenario or, at least, to be better aware of the risks it is facing, while also allowing a sound case strategy to be devised.

  1. Arbitration Lawyers May Assist the Client in Securing Third-Party Funding

Sometimes, even if a pre-arbitration case assessment shows that a case is highly meritorious, a client does not have sufficient funds, or does not wish to use the necessary funds, to see an arbitration through to its end. In such cases, arbitration lawyers may assist clients to secure so-called third-party funding, although funders rarely fund international cases where the amount in dispute is inferior to USD 3 million. This is rarely an option for a respondent, unless the respondent has counterclaims to be made.

  1. Arbitration Lawyers Assist the Client in Amicable Negotiations, or Mediation, with the Opposing Party

Some cases can be settled in an amicable manner, even after the initiation of arbitration.[4] Arbitration lawyers assist in such amicable negotiations, preparing non-disclosure agreements, if needed, as well as drafting and negotiating settlement agreements. They may also assist in more formal mediation, if the parties are intent on finding a resolution to their dispute and agree upon the assistance of a third party to this end.

  1. Arbitration Lawyers Master the Arbitration Procedure

Arbitration lawyers assist their clients in every step of the arbitration procedure, which may require thousands of hours of work over 12-24 months, is almost never performed adequately without counsel, and typically includes both a written phase and a shorter oral phase:

  • the initiation of the arbitration by preparing and filing a request for arbitration, or filing the initial answer to a request for arbitration;
  • assistance with the constitution of the arbitral tribunal consisting in appropriate arbitrator selection, conflict checks, correspondence with the arbitral institution, etc.;
  • assistance in the gathering of relevant and probative evidence, including the selection of documents in need of translations;
  • preparing written submissions, with full supporting evidence including factual exhibits, legal authorities, witness statements and expert reports;
  • analysing submissions and evidence submitted by the opposing party;
  • preparing necessary correspondence and preparing/responding to procedural incidents;
  • preparing for oral hearings including the preparation of skeleton arguments, opening statements, cross-examinations and hearing logistics;
  • pleading at oral hearings and examining witnesses;
  • preparing post-hearing memorials and rebutting post-hearing memorials of the opposing party;
  • preparing submissions on costs;
  • analysing final and partial awards;
  • assisting with the recognition, enforcement and execution of the arbitration award, if an award is not complied with voluntarily.
  1. Arbitration Lawyers Master the Applicable Law

While preparing procedural submissions and briefs, as well as during oral pleadings, arbitration lawyers must master the applicable law[5] to the dispute. In other terms, in order solidify their clients’ case, arbitration lawyers will conduct in-depth legal analysis and research under the applicable law and apply it to the factual issues in question.

  1. Arbitration Lawyers Secure and Assist Legal Experts, Quantum Experts and Appropriate Witnesses

It is common in international arbitration to use the services of experts to opine on technical matters, quantum and other issues, as well as to use witnesses[6] to support the facts of a case. More particularly:

  • Arbitration lawyers help their clients to secure competent experts and relevant witnesses;
  • They assist the experts and respond to factual questions the experts may have about the case in order to prepare their expert reports;
  • They assist witnesses with the preparation of their witness statements. However, arbitration lawyers are not allowed to prepare the witness statements entirely on behalf of witnesses, i.e., to “write down what the witness might, could, or should say, and then ask the witness to confirm the same.”[7]

Arbitration lawyers also prepare witnesses and experts for, and conduct, direct, cross and redirect examinations of witnesses and experts at oral hearings.

  1. Arbitration Lawyers Assist Clients with the Enforcement of Arbitral Awards

Finally, should an arbitration award not be voluntarily complied with, arbitration lawyers typically assist with the enforcement of arbitral awards rendered in favour of their clients, either directly or in collaboration with local lawyers authorized to plead before local courts in the State where enforcement of the award is sought. They may also assist in post-award litigation, such as an attempt to annul an award.

[1] See also Arbitration Proceedings without an Arbitration Clause, publication on Aceris Law website, 29 November 2017.

[2] See, e.g., Do I Need a Lawyer to Represent Me in International Arbitration?, publication on Aceris Law website, 14 March 2021.

[3] See, e.g., Advance on Costs in ICC Arbitration, publication on Aceris Law website, 11 August 2018; Non-Payment of Advances on Costs in Arbitration, publication on Aceris Law website, 17 April 2021.

[4] See, e.g., Settlement and ICC Arbitration, publication on Aceris Law website, 15 May 2021.

[5] See, e.g., Laws Applicable to an International Arbitration, publication on Aceris Law website, 6 February 2021.

[6] See, e.g., Witness Statements in International Arbitration, publication on Aceris Law website, 16 January 2021.

[7] R. Harbst, “A Counsel’s Guide to Examining and Preparing Witnesses in International Arbitration”, Wolters Kluwer (2015), p. 74.

International Arbitration


Companies Are Key to Driving Gender Diversity in Arbitration

Gender diversity in arbitration and across arbitral tribunals is increasing. Before 2012, women accounted for just 3.6% of the total population of arbitrators and 81.7% of tribunals were all-male panels; in 2019, women comprised 21.3% of arbitrators appointed. In May of this year, the first-ever all-female ICSID tribunal was constituted. In June, the International Chamber of Commerce (ICC) announced the election of its first female president in its nearly 100-year history.



While these are encouraging milestones, the pace of change remains frustratingly slow, with women still accounting for only a fifth of arbitrators. Research from the Cross-Institutional Task Force on Gender Diversity in Arbitral Appointments and Proceedings and data from arbitral institutions indicate that the increase in the appointment of women arbitrators appears to have been driven mostly by the efforts of arbitral institutions rather than the parties engaged in the arbitral process.

Corporate parties, however, are ideally placed to exercise their economic clout to apply pressure on their external counsel to take meaningful steps in ensuring gender diverse tribunals.

Diversity in arbitral tribunals ensures integrity and efficacy

Increased gender diversity on arbitral tribunals is key to ensuring the integrity and efficacy of proceedings.

The inclusion of diverse arbitrators—including women arbitrators—can enhance legitimacy, particularly in investor-state disputes which raise public interest issues. Generally, tribunals should represent the broad spectrum of stakeholders impacted by their decisions to allow for a greater range of perspectives to bear on the decision-making process.

Selecting arbitrators from the usual small pool of mostly male candidates leads not only to issues of a perceived lack of legitimacy, but also to procedural inefficiencies. These could include a dearth of available arbitrators, delays in the rendering of arbitral awards and an increased potential for conflicts of interests—all of which parties will be keen to avoid.

Arbitral institutions are driving the increase in the appointment of women

While it is good news that the number of women appointed as arbitrators has nearly doubled over the past four years, the increase appears to have been driven mostly by the efforts of arbitral institutions rather than corporate parties.



By way of example, the Stockholm Chamber of Commerce (SCC) recently analyzed its gender appointment statistics for the period 2015 to 2019 and found that, while parties were responsible for appointing 62% of all arbitrators, only 14% of party-appointed arbitrators were women. This stands in comparison to 30% of SCC Board-appointed women arbitrators. In other words, while the lion’s share of appointments are made by the parties, the parties are also statistically far less likely to select women arbitrators. The SCC’s 2020 statistics show some progress in terms of party appointments with the figure increasing to 23% from 16% in 2019.



In the investment treaty context, the situation may be even worse. In 2020, ICSID reported its female appointments had dropped to 14% compared to 19.3% in 2019. And while respondent states appointed 22% female arbitrators, investor claimants appointed a woeful 2%.

Corporate parties have the greatest potential influence on gender diversity in arbitral tribunals

Another indicator that corporates are lagging in the push for greater diversity is that only about 7% of the nearly 5000 signatories to the Equal Representation in Arbitration Pledge (ERA Pledge) are corporations.

The ERA Pledge seeks to increase, on an equal opportunity basis, the number of women appointed as arbitrators in order to achieve a fair representation as soon as practically possible, with the ultimate goal of full gender parity.

While corporate parties are most frequently responsible for appointing arbitrators to panels, they may be less familiar with available arbitrator candidates than arbitral institutions and often rely on lists provided by external counsel. These lists may be narrower than the broad and balanced view of arbitrator candidates available to arbitral institutions.

As a result, in 2019 the ERA Pledge formed a corporate sub-committee to engage companies, financial institutions and other users of arbitration to raise awareness of the Pledge and drive forward its implementation. By signing the Pledge, a company signals its support, including to its extern counsel, for a broader and more gender-balanced selection process. In November 2020, the Pledge corporate sub-committee launched the Corporate Guidelines—a set of guidelines specifically designed for corporates to use to implement the diversity aims of the Pledge.

In-house counsel can also significantly influence the gender diversity of the external counsel teams working for them, and in doing so, can enable women lawyers to gain additional experience that may one day lead to arbitral appointments.

Many forward-thinking companies are already using a combination of carrot and stick incentives to drive change. For example, in recent years corporations like Microsoft, HP and most recently Coca-Cola have provided stringent diversity expectations for external counsel. The message is clear: Provide us with diverse counsel or risk losing our business.

In-house counsel can use The Equity Project as a tool to move the needle

Companies that hire law firms to represent them have a significant role to play in bringing about change. One way corporates can ensure that law firms are putting women into leadership positions on matters is through The Equity Project.

Since its launch, Burford has committed nearly $57 million to back women through The Equity Project—24% of it to international arbitration claims. Further, 40% of the 22 global Equity Project Champions—men and women who help ensure that women lawyers are aware of the capital available—are leaders in international arbitration and dispute resolution.

In-house lawyers may use Equity Project capital for matters they award to law firms on the proviso that a woman lawyer is receiving origination credit or leading the case. This improves women lawyers’ internal profile within their respective law firms, as well as their prospects of being appointed as lead arbitrator in international arbitration proceedings.

To conclude, although change has been slow to come, it is encouraging that both law firms and their clients are increasingly aware of the importance and tangible benefits of diversity; with the proper tools, they can work collaboratively to make sure that women are given the opportunities they deserve to showcase their talents and ultimately achieve better outcomes for everyone involved.

Giulia Previti is a Vice President at Burford Capital with responsibility for assessing and underwriting legal risk in investment treaty and international commercial arbitration matters and a member of the Equal Representation in Arbitration Corporate Sub-Committee.

Ashley Jones is a senior knowledge lawyer at Freshfields Bruckhaus Deringer in London specializing in international arbitration and secretary of the Global Steering Committee and Corporate Sub-Committee for the Equal Representation in Arbitration.

Clarification of the Civil Liability Regime of Arbitrators and Arbitration Institutions


Settlement of disputes by arbitration sometimes gives rise to subsequent litigation, after issuance of the award. Aside from annulment proceedings, parties may also seek to have the arbitrator and/or the arbitration institution found liable in connection with the arbitration process.

The civil liability regime of arbitrators and arbitration institutions has been regulated by the institutions themselves; the protection granted to arbitrators and internal bodies of arbitral institutions has been further strengthened in the latest version of their arbitration rules, as is the case of the International Chamber of Commerce (“ICC”)[1] and the London Court of International Arbitration (“LCIA”).[2]

This regime has also been recently clarified by French case law and from a practical point of view, several lessons can be drawn from these decisions, which invite in particular the stakeholders (parties, counsel, arbitrators and institutions) to anticipate this issue too when defining the framework of the arbitration to be carried out.

1. The court with jurisdiction to hear civil liability claims against arbitrators


The arbitrator is partially immune from civil liability. Similar to the immunity applicable to state judges, it is however limited to the arbitrator’s mission to judge and does not extend to the arbitrator’s other missions. In the latter case, the conditions applicable to arbitrators’ civil liability in case of misconduct were recently clarified in French case law, in the context of an action initiated against an arbitrator whose award, issued in proceedings administered under the ICC Rules, had been annulled because the arbitrator failed to comply with his disclosure obligation. The arbitrator’s obligation to disclose to the parties any circumstance that may affect his independence and impartiality indeed does not form part of his/her mission to judge and any breach thereof is not covered by immunity.

In its decision of 31 March 2021, the Paris civil Court ruled that actions for civil liability of the arbitrator fall under the jurisdiction of the court with territorial jurisdiction where the arbitrator’s mission was materially and essentially carried out.

Having first recalled that the Brussels I bis Regulation[3] is not applicable to arbitration proceedings in accordance with its Article 1, the judge then found that the competent court to hear this type of dispute was that of the place where the arbitrator provided the services which would be, for this purpose, the place where the hearings and deliberations were physically held.

In practice, the place where services are effectively rendered may be different than, first, the seat of the arbitration as identified in the arbitration clause and recalled in the terms of reference of the arbitration, which governs the legal regime applicable to the conduct of the proceedings and to recourses against the award. It may also be different than the court identified in the applicable arbitration rules to hear disputes arising out of or in connection with the administration of the arbitration.[4] Finally and considering the increasing number of hearings held remotely, by videoconference, initially to reduce costs and implemented to an even greater extent in the recent months because of the Covid-19 pandemic, it may be difficult to single out one place of performance of the services by the arbitrator. This is the classic case in international arbitration of an arbitrator working from one country, while the other members of the panel work in another and the parties, counsel and witnesses are also located elsewhere, including during the hearings or the deliberations.

As a result, the parties (who already provide for the seat of the arbitration in the arbitration clause) could also consider the opportunity to specify, by means of a specific jurisdiction clause in the terms of reference of the arbitration, the court that would have jurisdiction to hear an action for civil liability of the arbitrators in case of a breach of their contractual mission.

2. Strict limits to the civil liability of arbitration institutions


The French courts also had the opportunity to clarify recently the type of misconducts that may give rise to civil liability of arbitral institutions. Ruling on 23 March 2021[5] on claims that the ICC had failed to manage properly the transition between two panel of arbitrators (the constitution of the first one having been found to be irregular), the Paris Court of Appeal confirmed that only the most serious misconducts were excluded from the scope of the limitation clauses stipulated in their rules.[6]

In particular, it was held that the ICC would not be held liable in the following circumstances:

● Proceeding directly to the constitution of the second arbitral tribunal;

● Requesting payment of an additional advance to cover the costs of the arbitration, in addition to the amount already paid to the tribunal first constituted and which issued an award;

● Failing to draw certain issues already presented to the first tribunal to the attention of the second arbitral tribunal before the award was made;

● Transmitting to the arbitral tribunal a request for rectification of the award two months after receiving it.

In so doing, the Paris Court dismissed the argument that such actions and decisions, which were discretionary in nature under the ICC Rules of Arbitration, constituted serious misconduct and could give rise to civil liability. In particular, the Paris Court held that:

● the ICC Court had discretion, when replacing an arbitrator, to follow or not the initial procedure of appointment of the members of the arbitral tribunal pursuant to Article 12(4) of the ICC Rules then in force ;

● the ICC Court was allowed to readjust the amount of the advance on costs at any time during the proceedings pursuant to Article 30(2) and Article 1(10) of Appendix III of the ICC Rules then in force;

● drawing the attention of the arbitral tribunal to certain matters of substance when reviewing the draft award was merely an option pursuant to Article 27 of the ICC Rules;

● Article 29 of the ICC Rules does not set any specific time limit within which the Secretariat of the ICC Court is required to transmit to the arbitral tribunal a party’s request for correction or interpretation of the award. In that respect, the judge found that transmitting the request for correction 2 months after receiving it was not excessive and that it did not reveal any intention of the ICC to delay the process.

This welcome clarification ensures that the institutions can continue to manage arbitration proceedings effectively while providing an adequate level of protection, equivalent to that offered in litigation, in case of serious misconduct of arbitrators and institutions.


[1] In its 2021 version, the ICC Rules state that: “The arbitrators, any person appointed by the arbitral tribunal, the emergency arbitrator, the Court and its members, ICC and its employees, and the ICC National Committees and Groups and their employees and representatives shall not be liable to any person for any act or omission in connection with the arbitration, except to the extent such limitation of liability is prohibited by applicable law” (Article 41). It already laid down, in its 1998 version, the rule that “ Neither the arbitrators, nor the Court and its members, nor the ICC and its employees, nor the ICC National Committees shall be liable to any person for any act or omission in connection with the arbitration” (article 34).

[2] The LCIA Rules, as recently revised in 2020, also state that: “None of the LCIA (including its officers, members and employees), the LCIA Court (including its President, Vice Presidents, Honorary Vice Presidents, former Vice Presidents and members), the LCIA Board (including any board member), the Registrar (including any Deputy Registrar), any arbitrator, any Emergency Arbitrator, any tribunal secretary and any expert to the Arbitral Tribunal shall be liable to any party howsoever for any act or omission in connection with any arbitration, save: (i) where the act or omission is shown by that party to constitute conscious and deliberate wrongdoing committed by the body or person alleged to be liable to that party; or (ii) to the extent that any part of this provision is shown to be prohibited by any applicable law” (Article 31.1).

As for the other arbitration institutions favoured in practice, as shown in the 2021 study conducted by Queen Mary University and White & Case (available here, the SIAC Rules (2016) provide for a comparable exclusion of liability under Article 38, as does the HKIAC Rules (2018, Article 46).

[3]  Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters.

Article 1 of these Rules provides: “2. This Regulation shall not apply to: […] d) arbitration“.

Article 7 states that: “A person domiciled in a Member State may be sued in another Member State: (1) (a) in matters relating to a contract, in the courts for the place of performance of the obligation in question; (b) for the purposes of this provision and unless otherwise agreed, the place of performance of the obligation in question shall be : […] in the case of the provision of services, the place in a Member State where, under the contract, the services were provided or should have been provided”.

[4] For ICC proceedings, such disputes would fall within the jurisdiction of the Paris court; for the LCIA, the courts of England and Wales, by virtue of the jurisdictional clauses which are stipulated in these rules:

Article 43 of the ICC Rules of Arbitration provides: “Any claims arising out of or in connection with the administration of the arbitration proceedings by the Court under the Rules shall be governed by French law and settled by the Paris Judicial Tribunal (Tribunal Judiciaire de Paris) in France, which shall have exclusive jurisdiction »

Article 31.3 of the LCIA Rules states: “Any party agreeing to arbitration under or in accordance with the LCIA Rules irrevocably agrees that the courts of England and Wales shall have exclusive jurisdiction to hear and decide any action, suit or proceedings between that party and the LCIA (including its officers, members and employees), the LCIA Court (including its President, Vice Presidents, Honorary Vice Presidents, former Vice Presidents and members), the LCIA Board (including any board member), the Registrar (including any deputy Registrar) any arbitrator, any Emergency Arbitrator, any tribunal secretary and/or any expert to the Arbitral Tribunal which may arise out of or in connection with any such arbitration and, for these purposes, each party irrevocably submits to the jurisdiction of the courts of England and Wales.

[5]  CA Paris, 23 March 2021, n°18/14817. It confirms the judgment rendered on 12 February 2018 by the TGI of Paris in the same case (n°16/08752).

[6] The applicable version of the ICC Rules of Arbitration was the 1998 version, Article 34 of which stated: “ Neither the arbitrators, nor the Court and its members, nor the ICC and its employees, nor the ICC National Committees shall be liable to any person for any act or omission in connection with the arbitration”.

Marie Danis Marie Valentini

Climate Finance and Arbitration


Before the COVID-19 pandemic, the fight against Climate Change was the number one topic on the news. What was most striking about the fight against Climate Change were the huge numbers that were discussed. Under the UNFCCC [1] Copenhagen Accord of 18 December 2009, developed countries committed to jointly mobilize USD 100 billion dollars a year by 2020, to finance projects to halt Climate Change or at least mitigate the impact of Climate Change. In December 2019, the EU Commission’s president, Ursula von der Leyen, announced EU’s Green Deal and a plan to invest EUR 1 trillion by 2050 to fight Climate Change.

Over the next years, we will see a spark in development projects with a focus on fighting Climate Change and subsequently, an increase in financing requirements for these projects.

In this article, we will take a closer look at the system of climate finance. We will also look at disputes that may arise in the context of climate finance activities and briefly examine whether or not arbitration can be used as a means to resolve these disputes.

What is climate finance?

Climate finance refers to local, national or transnational financing—drawn from public, private and alternative sources of financing—that seeks to support mitigation and adaptation actions that will address climate change. The UNFCCC Standing Committee on Finance defines it as “finance that aims at reducing emissions, and enhancing sinks of greenhouse gases and aims at reducing vulnerability of, and maintaining and increasing the resilience of, human and ecological systems to negative climate change impacts.”[2]

The UNFCCC, the Kyoto Protocol and the Paris Agreement [3] envisage that Parties with more financial resources will provide assistance to those who are less endowed and more vulnerable.[4] Typically, developed country Parties are to provide financial resources to assist developing country Parties in implementing the objectives of the UNFCCC. The Paris Agreement reaffirms the obligations of developed countries, while for the first time also encouraging voluntary contributions from other Parties.

In addition to the money committed under the UNFCCC Copenhagen Accord, there are further means of climate finance. Financing for climate mitigation and adaptation activities can be provided by way of advisory services, equity, grants, loans, guarantees, lines of credit and other instruments such as purchase agreements for carbon finance projects.[7] This financing can be provided by governments, multilateral development banks such as the Asian Development Bank or the World Bank, or by multilateral funds such as Climate Investment Funds. Climate finance can also be raised from private sector investors including individual investors, venture capitalists, or larger institutional investors like pension funds and insurance companies.[8] According to a report published by Climate Policy Initiative, climate finance raised from public sources, such as governments and multilateral development financial institutions, totalled USD 253 billion in 2017-2018, representing 44% of total commitments while the amount raised from private sources was USD 326 billion, accounting for 56% of the total climate finance.[9] The Organisation for Economic Cooperation and Development (OECD) maintains a database of statistics regarding all climate-related external development finance flows, which can be accessed here.

Some examples of projects that have received climate finance are an adaptation project for climate-resilient coastal zone management in the Western Indian Ocean,[10] a project in the Philippines to implement long-term climate risk reduction and adaptation measures[11] and a project in the Knuckles Mountain range catchment in Sri Lanka to address climate-induced irrigation and drinking water shortages in farms and agricultural plantations.[12]

Relevant parties in climate finance

Given that climate financing involves financing through local, national and transnational sources, a number of parties may be involved. The main sources of climate finance can be identified as under:

  • Official bodies like the UNFCCC, the UNEP, the OECD, and the G-20, which play an important role in coordinating public and private finance sources, as well as provide limited finance themselves.
  • Governments, since they decide how finance is earmarked for climate change initiatives, and which projects they would support.
  • Development Finance Institutions such as the Asia Development Bank, Japan International Cooperation Agency, the UK Development Fund, to name a few.
  • Climate Funds such as the Green Climate Fund, which relies on contributions from countries.
  • Green Investment Banks which are basically banks with a specific focus on providing finance lines to projects with a climate change mitigation and/or adaptation focus.
  • International and domestic capital markets, which provide debt finance, at the international and domestic level respectively, in the form of green bonds to climate change projects.
  • Corporations, which are the largest provider of climate finance, through their climate friendly investments in various sectors, including energy generation and efficiency, transport, and environment infrastructure.
  • Aid agencies, by providing necessary finance for essential projects, which are unable to find funding.
  • Rating agencies, such as Standard & Poor and Moody’s, which oversee corporations and provide an analysis on their climate performance.
  • Insurance industry, as a holder of substantial amount of finance, the insurance industry can provide finance for climate change mitigation and adaptation initiatives.
  • Community-focused approaches, such as crowdfunding, i.e. campaigning for and raising funds through individuals or organizations.
  • Foundations, like the William and Flora Hewlett Foundation and the John D. and Catherine T. MacArthur Foundation, provide funds for research in ideas and products which avert climate change.[13]

Disputes in climate financing and arbitration as a means to resolve climate financing disputes

Initiatives to combat climate change can give rise to various legal challenges, and consequently result in disputes. The transition to clean energy through the construction of wind and solar farms, could give rise to disputes in the planning, construction or funding phase. The funding of climate change combatting and adaptation initiatives, could be a fertile ground for disputes.

For example a dispute could arise from disagreements between stakeholders on how money is to be spent, or which project should benefit from funding. If recipients of climate finance do not utilize funding for the purpose and in the manner outlined under the relevant funding agreement, it could lead to disputes.

Also, funders could renege on their promises to make good on payments to projects, resulting in disputes. Moreover, some of the funding is routed through the World Bank or funds managed and/ or operated by UNFCCC- and these organizations could attach certain strings and conditions, in order to make the funds accessible to the intended recipient. This could also potentially lead to disputes.

More specifically, a breach of any term or condition of an agreement under which climate finance has been provided could result in a dispute, which will need to be resolved as per the dispute resolution method stipulated in the agreement. Where there is a contract, there is potential for disputes.

In its report on Resolving Climate Change Related Disputes through Arbitration and ADR, the ICC predicts that a growth in investment in renewable energy projects could impact associated underlying contracts including financing agreements. As companies work to scale up their investments in the renewable energy sector to achieve global climate change goals and Paris Agreement commitments, there could be a rise of breach of contract claims under their financing agreements as well. [23]

The method of dispute resolution that is employed to resolve disputes arising in the field of climate finance will depend on what has been agreed by the parties in the underlying financing agreement. Agreements executed for raising climate finance through private sources of funding are not available in the public domain.

The GCF however publishes all executed FAAs and Grant Agreements on its website. [24] The FAAs provide for resolution of disputes through arbitration under the UNCITRAL Arbitration Rules. [25] The Grant Agreements themselves do not contain a dispute resolution clause, but they do refer to “Standard Conditions for Readiness and Preparatory Support Grants provided by the Green Climate Fund”. These Standard Conditions will most likely contain provisions on dispute settlement. These Standard Conditions however are not available.

While there is no data available in the public domain regarding disputes that may have arisen under climate financing agreements, it is likely that several if not most of these arrangements provide for arbitration as a means of dispute resolution. Parties engaged in climate change mitigation or adaptation services and strategies and multi-lateral funds or Governments providing funding for these activities may often come from different jurisdictions, and would not want to be engaged in litigation before state courts.

It is still early to see a surge in climate finance disputes, but it will be interesting to see how the landscape of dispute resolution in this sector evolves as climate finance initiatives continue to rise. We urge you to watch this space for more updates!

[1] The Unites Nations Framework Convention on Climate Change was adopted on 9 May 1992 with an objective to “stabilize greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system” (Article 2, UNFCCC).


[3] The Kyoto Protocol and the Paris Agreement were adopted within the framework of the UNFCCC to re-affirm the commitment of the members thereto, to reduce levels of greenhouse gas emissions and to mobilise financial resources to combat/ mitigate the effects of climate change.


[5] Article 8 of the Copenhagen Accord

[6] Article 10 of the Copenhagen Accord.














[20] A directory of National Designated Authorities is available here.



[23] at pp. 55-58


[25] The Dispute Resolution Clause in the Funded Activity Agreement (Clause 13) applies the dispute resolution mechanism under the Accreditation Master Agreement (Clause 29.3) mutatis mutantis.

Author: Dr. Markus Altenkirch and Brigitta John