74 LEXPERT MAGAZINE
|
NOVEMBER/DECEMBER 2016
| INVESTOR-STATE DISPUTES |
investor-state disputes. ICSID, which hears
an estimated two-thirds of BIT disputes,
administered 38 in 2011. at number, it-
self a record, gave way to a new high of 52
cases in 2015. Growth has been particu-
larly noticeable during this century: just
69 cases were registered between 1972 and
1999, while some 500 were registered be-
tween 2000 and 2015.
Sheer numbers suggest that CETA could
in itself contribute to an upsurge in arbitra-
tions involving Canada. When and if the
treaty is ratified by all parties, Canada will
effectively have a BIT with every one of
the EU nations, including the original EU
members, with whom it currently has no
investment-protection treaties.
e reforms envisaged by CETA to the
arbitration system could contribute as well.
"I think if the reforms that are proposed
are actually put into place, they could have
a significant impact on arbitration claims,"
Van Harten says.
Bartuciski also believes that the trend
will continue, but that CETA and TPP will
in themselves not be significantly influen-
tial in increasing the number of disputes.
"e changes that these treaties make to
the investor-protection regime are quite
modest, and what we're basically looking at
is a NAFTA-type regime with the wrinkle
of a permanent court."
Gibson's view is that a huge wave of inves-
tor-state claims is not in the offing. "ey're
expensive, they bring a lot of publicity, and
investors know that states win most of the
claims, so there are only a certain number
of claimants who will resort to arbitration."
But there may be a wild card in the mix:
third-party litigation funding has made its
way to investor-state disputes. Companies
like the $300-million Burford Group, the
world's largest private litigation funder,
and Calunius Capital, both based in the
United Kingdom, are now providing fi-
nancing. "Investor-state disputes are attrac-
tive to third-party funders because they
always involve big dollars," says Robert
Wisner of McMillan LLP in Toronto, who
represents a number of junior mining com-
panies who have obtained such funding for
ICSID cases.
ird-party funders don't care much
whether the complainant is based in de-
veloping country or a developed one: all
they really care about is whether the case
has merit and whether they can recover any
award. Indeed, financing a claimant from a
developing country may be more attractive
to third-party funders because the pros-
pects of actual recovery from developed
countries is a much safer bet than trying to
collect from poor countries. e upshot is
that third-party funding could be a game-
changer in the investor-state dispute arena.
So what's next? If it works for Egypt,
why wouldn't it work for Burundi?
Julius Melnitzer is a freelance
legal-affairs writer in Toronto.
CANADA'S TRADE & INVESTMENT RELATIONS
Developing nations may use trade and investment treaties to combat growing Western protectionism
LEGEND
COUNTRIES WITH BILATERAL
INVESTMENT TREATIES WITH CANADA
COUNTRIES WITH TRADE
AGREEMENTS WITH CANADA
TRADE AGREEMENTS PENDING
RATIFICATION OF TPP AND CETA
