Studies

Credibility International Releases the Second Edition of its Study of Damages in Investor-State Cases

Washington D.C., February 3, 2021 – Credibility International is pleased to release the Second Edition of its Study of Damages in Investor-State Cases which provides analyses of the claims made and damages awarded in all final public awards issued by international arbitral tribunals.

The first edition of this study, published in January 2014, focused on arbitrations handled by the International Center for the Settlement of Investment Disputes (“ICSID”), a member of the World Bank Group. The study was based upon merit awards issued and publicly available as of June 30, 2013, including analysis of 99 cases.

This second edition of the study is more comprehensive and analyzes all investor-state cases which are primarily investment treaty cases, and a number of contract cases, based on publicly available awards as of March 31, 2020. This edition analyzes additional arbitrations under ICSID rules, as well as arbitrations under UNCITRAL, SCC, PCA, ICC, LCIA, and CRCICA rules.

The preparation of this study was led by Tim Hart, Credibility’s founder and Chief Executive Officer, and Rebecca Vélez, a Director in Credibility’s international arbitration practice. Mr. Hart and Ms. Vélez have decades of experience serving as damages experts in international arbitrations with particularly deep expertise in investor-state cases that typically involve arbitrations between foreign investors and sovereign states under investment treaties.

This second edition of the study is based on 241 final public arbitral awards issued from the inception of such disputes in 1981 through March 31, 2020. The awards included in the study represent the entire population of awards Credibility was able to identify that were both public and final (not subject to an ongoing annulment proceeding). Among other things, the study contains a case-by-case listing of damages claimed and awarded, including analysis of:

  • Case activity levels and types over time
  • Basis of the damages awarded
  • Impact of damages claimed and case duration on costs
  • Relationship between amounts spent and case outcome
  • Trends in interest rates awarded
  • Tendencies of the most active arbitrators
  • Rankings of law firms and damages experts based on various scoring criteria
  • Discussion of notable issues and trends across the cases evaluated

Key findings include:

  • Publicly reported damages awarded totaled almost $71.9 billion, on claims of over $219 billion
  • The respondent won in approximately 61% of the reviewed cases, either through awards of no liability or awards with less than 20% of the claimed amount awarded
  • Fifty arbitrators issued four or more merit awards, while only 12 have issued more than ten awards
  • There are 12 law firms with ten or more awards
  • Only five damages experts have been reported in ten or more awards

Mr. Hart said, “We believe this study is the most comprehensive study of damages in investor-state cases ever prepared. The study endeavors to provide insights into this group of cases including the magnitude of the claims, success rates, damages awarded including the basis of those damages, and industry and regional differences between the cases.” Ms. Vélez observed, “Our analyses provide interesting insights relating to the decisions made by arbitrators and the track records of both law firms and damages experts. We also aimed to examine trends in costs and interest rates awarded.”

Credibility thanks Transnational Dispute Management, who also kindly published the first edition of our study in 2014, for publishing this second edition.

Please click here to download the study.