Investor-state arbitration explained

Who can bring a claim

Under Article 25(1) of the ICSID Convention, the Centre hears legal disputes arising directly out of an investment between a Contracting State, or a designated subdivision or agency of that state, and a national of another Contracting State ¹. Both sides must consent in writing. The Convention says that once the parties have given consent, "no party may withdraw its consent unilaterally" ¹.

Article 26 says consent to ICSID arbitration is deemed consent to the exclusion of any other remedy, if not otherwise stated. A Contracting State may require the investor to exhaust local administrative or judicial remedies as a condition of its consent ¹.

Where a state's consent comes from

A state does not consent case by case in most disputes. It gives consent in advance in a treaty, an investment law or a contract, and the investor accepts it by filing a claim. ICSID figures to 30 June 2026 show the split for all registered cases ².

What law the tribunal applies

Article 42(1) of the ICSID Convention says the tribunal decides the dispute under the rules of law agreed by the parties. Where there is no agreement, it applies the law of the state party to the dispute, including its conflict of laws rules, and such rules of international law as may be applicable ¹.

How ICSID cases have ended

ICSID publishes outcome figures for disputes decided by tribunals. Across all concluded ICSID arbitrations to 30 June 2026, tribunals upheld claims in part or in full in 48% of cases, dismissed all claims in 30%, declined jurisdiction in 20% and found claims manifestly without legal merit in 2% ².

In the 2026 fiscal year alone, the shares were 37% upheld in part or in full, 40% dismissed, 18% declined jurisdiction and 5% manifestly without legal merit ². A claim upheld in part can mean an award far below the amount claimed. Case records on this site give both figures where the award is public.

After the award

Article 53 of the ICSID Convention makes an award binding and says it is not subject to any appeal or other remedy except those provided in the Convention ¹. The main remedy is annulment under Article 52, decided by an ad hoc committee ¹. Article 54 requires every Contracting State to enforce the money obligations in an award as if it were a final judgment of its own courts ¹.

Investor-state awards made outside ICSID, for example under the UNCITRAL Arbitration Rules, are enforced through national courts under the 1958 New York Convention ⁵. UNCITRAL listed 172 parties to that convention when checked on 22 October 2026 ⁶.

Transparency

The UNCITRAL Rules on Transparency in Treaty-based Investor-State Arbitration came into effect on 1 April 2014. They apply by default to arbitrations under the UNCITRAL Arbitration Rules brought under treaties concluded on or after that date, if the parties do not agree otherwise. Information is published in a central repository on the UNCITRAL website ⁴.