Our new publication, International Arbitration Top Trends in 2019, is a forward-looking and practical guide to the key issues that our global team expects to shape the arbitration landscape and be of critical importance to our clients in the year ahead.
The changing legal, political and economic environment impacting the practice of arbitration globally and the world in which our clients operate gives rise to the following challenges and opportunities for 2019 and beyond:
- Redesigning investor-State dispute settlement: traditional ISDS is undergoing something of a re-design, manifesting in a push to replace traditional treaty-arbitration with an Investment Court System in some parts of the world, a drive by some states to abandon or renegotiate their bilateral investment treaties (BITs), and efforts by various bodies to propose ISDS reforms, including a wholesale review of the ICSID arbitration rules.
- Trade and investment in the age of Trump: in the US, Trump’s protectionist – and anti-ISDS - agenda has led to a significant reduction in the level of protection enjoyed by investors in the NAFTA replacement, the USMCA.
- Intra-EU BITs following Achmea: the future conduct of arbitration under intra-EU BITs and under the Energy Charter Treaty remains unclear following Achmea, with the question of the enforceability of such awards in doubt.
- Arbitration and Brexit: with continuing uncertainty surrounding the future framework for enforcing English court judgments within the EU, some parties may turn to arbitration to avoid Brexit-related enforcement risk. Further, a post Brexit UK may prove to be an attractive location for structuring investments into the EU given its network of treaties with EU member states.
- Third party funding: arbitration funding is becoming increasingly mainstream and the arbitration community is playing catch up in trying to identify guiding principles to govern its use in arbitration proceedings.
- The drive to improve efficiency in arbitral procedure: recent arbitration rules reforms look set to lead to greater efficiency in arbitration, although this will depend on several factors.
- The impact of human rights and environmental law on investment treaty arbitration: the shifting balance of economic and political power from Western states to emerging economies looks set to continue in 2019 with an increasing focus on investor responsibility as the counterpoint to investment protection.
- Trends in investor-State energy and telecoms disputes: we foresee an increasing number of telecoms disputes as ‘spectrum value extraction’ measures - reminiscent of the sorts of ‘resource nationalism’ measures we have seen in the energy sector over the years - increase.
- Cybersecurity and data protection: while the arbitration community is taking encouraging steps to promote measures designed to assist cybersecurity and data protection during the course of proceedings, we expect this to be an area that will become increasingly central to – and a contentious part of – arbitrations going forward.
- The legitimacy of the arbitration process: in response to criticisms as to the legitimacy of the arbitral process, there have been a series of reforms and efforts across the arbitral community to make arbitration more transparent, diverse and efficient.
We look forward to navigating these trends with our clients in the year ahead.
If you would like to find out more about any of these topics, please contact one of us or another of our colleagues in the international arbitration group.