The most recent ICSID award granting an application
for summary dismissal, issued in March 2017, was
the first time since 2010 that an ICSID tribunal
had disposed of a case in full on this basis.
This low success rate may reflect, at least in part,
a common concern that such decisions are
vulnerable to challenge for a lack of due process.
It remains to be seen whether the recent ICSID
dismissal is a harbinger of tribunals overcoming
that fear. As more institutions expressly support
summary dismissal, we expect tribunals will
become more willing to dismiss claims or defences
early when justified in doing so.
We also expect that this growing trend among
arbitral institutions to promote the dismissal of
unmeritorious claims at an early stage will make
arbitration a more appealing alternative in sectors
where litigation traditionally has been favoured.
This is particularly true in the financial services
industry, where institutions have been hesitant
to use arbitration.
According to a November 2016 report by the ICC
Commission on which we have previously reported,
one of the key drawbacks of arbitration that
financial institutions identified was the perceived
inability to obtain summary dismissal of
unmeritorious claims or defences (as compared to,
for example, the availability of motions to dismiss
or to strike out in the courts of New York or London).
We have already seen evidence of increased use
of arbitration by financial institutions in recent
years: approximately 20 per cent of the cases filed
with the ICC in 2016 related to the finance and
insurance sector, up from 9.1 per cent in 2010.
In 2017, we represented a number of clients in the
financial services industry in both commercial
and investor-state arbitration proceedings under
various procedural rules, pointing to a trend for
2018 of increasing use of arbitration in this sector.
The expanding availability of summary dismissal
proceedings will only enhance that trend.
Summary dismissal gains ground: a welcome
development for financial institutions
We have already seen
evidence of increased use
of arbitration by financial
institutions in recent years.
Cases filed with the
ICC relating to the finance
and insurance sector