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LATIN AMERICA ADVISOR

LATIN AMERICA ADVISOR

A daily publication Of the dialogue

June 13, 2022

What Do New Rules for Arbitration Mean for Latin America?

The World Bank’s Centre for Settlement of Investment Disputes, or ICSID, this month put into effect new rules that govern arbitration proceedings. // File Photo: publicdomainpictures.net.

Q

  • The amended Regulations and Rules of the World Bank’s Centre for Settlement of Investment Disputes, or ICSID, took effect on July 1. The long-anticipated changes relate to transparency, such as disclosure of third-party funding for the pursuit or defense of cases, as well as efficiency and timelines related to cases and entities’ access to arbitration through ICSID. What are the most significant changes to the ICSID rules for Latin American countries and investors in the region? Who will benefit most from the rule changes, and do the changes have any drawbacks? What are the biggest trends to expect in Latin American and Caribbean dispute settlements in the years ahead?  

A

Marco Molina, partner at BakerHostetler: “It is no secret there are barriers to entry in investment arbitration in Latin America. Arbitrations take years to resolve. Submissions can run thousands of pages long. Parties submitting in Spanish may be required to translate their pleadings into English because of the lack of arbitrators fluent in Spanish. In the end, a claimant could rack up $10 million to $20 million prosecuting an investment arbitration claim, with no guarantee it will get back any of those costs should it prevail. The cost-prohibitive nature of investment arbitration forces would-be claimants in Latin America to walk away from meritorious claims or seek cheap stopgap remedies under local laws that do little, if anything, to make them whole. States also feel the financial crunch. Many Latin American states hire counsel under extremely restrictive budgets that make it difficult…”

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The Inter-American Dialogue publishes the Latin America Advisor every business day for a distinguished membership of informed corporate leaders, scholars, and government officials invested in Latin America’s development and future. The Advisor‘s highly regarded Q&A section covers questions submitted by subscribers themselves. Commentators regularly include heads of state, business leaders, diplomats, economists, analysts, and thought leaders from around the world. Many of the world’s largest and fastest-growing companies subscribe to the Advisor. To subscribe, click here. For terms and conditions, click here. For more information, contact Gene Kuleta, editor of the Advisor, at gkuleta@thedialogue.org.
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