March 01, 2015

Current Trends in International Investment Arbitration

With global trade rapidly expanding, attorneys are increasingly exploring how to address disputes that cross borders.

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As global trade and investment continue to expand at an almost exponential rate, firms and their legal teams are increasingly exploring how to address disputes that cross borders. Although there are various ways in which dispute resolution may occur in cross-border contexts, international arbitration is becoming increasingly popular. Further, within international arbitration, it is international investment arbitration that seems to have garnered the lion’s share of recent headlines. For example, in just the last year, an international arbitral tribunal held that the government of the Russian Federation was liable for $50.2 billion for expropriating the assets of Yukos, one of the largest oil companies in Russia. This was based on a claim that Russia had violated its obligations under the Energy Charter Treaty through the expropriation.

The Yukos case is only one example of the impressive growth in international investment arbitration. In the past few years, many firms have initiated disputes with host states, alleging that a sovereign government violated investment treaties. Investment arbitration claims have been brought by Vodafone, TCF, Occidental Petroleum, Électricité de France, and many others from across the world.

The amounts involved are often staggering. “Bringing a billion-dollar claim is no longer enough to stand out in a survey of international arbitration.” Michael D. Goldhaber, High Stakes, Focus Europe, Am. Law. Supp., Summer 2011, at 22. Indeed, there are well over 100 investment arbitration disputes each seeking over $100 million in damages.

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