INTERNATIONAL ARBITRATION | HIGHLIGHTS IN 2020
2020 has been a turbulent year as the Covid pandemic caused a significant slowdown in economic activity worldwide. However, the arbitration atmosphere did not only adapt quickly but also achieved some remarkable highlights.
From a surprising record of an Asia-Pacific based arbitration institution
In 2020, Singapore International Arbitration Centre (“SIAC”) set a new record with 1,080 new cases, reaching USD 8.49 billion (SGD 11.25 billion) in total value of disputes. This is a double milestone for SIAC: the first time the 1000-case threshold is surpassed, and the highest number of cases per year since the establishment of the institution.
This record is outstanding on an international scale, even in comparison to several long-standing arbitration institutions. In 2020, ICC International Court of Arbitration recorded 946 new cases – highest since 2016. In the Asia Pacific market, Hong Kong International Arbitration Centre only recorded 483 cases in 2020. Of those cases, 318 were arbitrations, 16 were mediations and 149 were domain name disputes. In Vietnam, the total number of disputes administered by Vietnam International Arbitration Centre (“VIAC”) was 221 cases, of which 46 cases were foreign related.
SIAC has successfully maximized its position in Singapore as an international commercial hub to develop its international business. This is evidenced by the fact that 94% of total cases administered by SIAC in 2020 were international. The top foreign users of SIAC include parties from India, US, China, Switzerland, Thailand, Indonesia, Hong Kong SAR, Vietnam, Japan and Cayman Islands.
Notably, among the new cases handled in 2020 by SIAC, there were 54 cases in which either party had Vietnamese origin, which even surpasses VIAC’s number of foreign-related cases. For Vietnamese arbitration institutions and arbitrators, such fierce competition is a real driving force for improvement. In addition, Vietnamese legal practitioners should also pay attention as not to miss such a big market.
To a steady growth of an institution specialized in investor-state dispute settlement
2020 was a difficult year for investor-state dispute settlement (‘ISDS”) market due to the global effect of Covid pandemic. However, the number of ISDS cases remained high.
As a leading institution in ISDS, activities of International Centre for Settlement of Investment Disputes (“ICSID”) can be seen as a representation of trends in this field. In 2020, ICSID administered 58 cases, which is the highest record since its establishment in 1972. This is also a remarkable recovery from 39 cases in 2019, and 2 cases higher than 2018.
The major regions of respondent states were still Eastern Europe, Central Asia and South America. However, the members of the tribunal (arbitrators/conciliators/ad-hoc Committee Members) were still mainly from Western Europe and North America, making up of 41% and 19% of the total appointed members respectively.
Regarding the distribution of new cases by economic sector in 2020, industry and energy were the areas most susceptible to ISDS claim. To be specific, oil, gas and mining makes up 26% of the total number of disputes, followed by construction at 17% and energy at 15%.
In short, international arbitration seems to remain firm on its own path despite the unprecedented changes of the global economy. For practitioners, this area is a solid ground for professional development and growth.