ICSID Publishes First Study on Contract-Based Cases, With Statistics and New Model Clauses

The International Centre for Settlement of Investment Disputes (ICSID) today released a background paper on Contract-Based ICSID Arbitration, the first in-depth study examining how contract-based investment dispute resolution has worked in practice at ICSID.

The paper offers a comprehensive analytical guide and a practical reference for investors, States, and State entities or agencies, underscoring the role and the value of the ICSID framework in contract-based investment dispute resolution. It includes an assessment of 175 contract-based cases registered under the ICSID Convention and Additional Facility (AF), including 29 pending and 146 concluded cases as of December 31, 2025. It is accompanied by a special issue of the ICSID Caseload-Statistics, featuring data related to contract-based cases, and a new set of ICSID Model Clauses for Contracts with ready-to-use drafting language.

The paper explores the advantages of contract-based arbitration under the ICSID Convention, and provides a detailed review of jurisdictional requirements, applicable law questions, and key merits issues, such as stabilization clauses, as well as the procedural tools available to parties in ICSID Convention arbitration.

Key Findings and Statistics
While treaty-based dispute resolution accounts for a significant share of ICSID's caseload, contract-based proceedings were a defining feature in the Centre's early years and continue to expand. Contract-based arbitration and conciliation currently account for 16% of ICSID's total caseload. Of that share, 93% are arbitration proceedings and 7% are conciliation proceedings, with most contract-based cases having been instituted on the basis of the ICSID Convention.

Contract-based cases are particularly prominent in certain geographic regions: almost half (49%) of arbitrations based on a contract involve a State party from Africa, while States from South America account for 21% of the contract-based caseload. By sector, the oil, gas, and mining sectors account for 47% of all contract-based cases, significantly higher than their 26% share of the overall ICSID caseload, while electric power and other energy sectors contribute a further 16% of contract-based cases.

Jurisdictional objections, a frequently used mechanism by respondents, are upheld less often in contract-based arbitrations than in treaty-based cases: 14% of contract-based awards declined jurisdiction, compared to 20% of awards across the overall ICSID caseload.

ICSID contract-based cases may be brought by investors and States alike. In practice, claimants are almost exclusively juridical persons, whose nationality is generally determined by their place of incorporation or registered seat. Article 25(2)(b) allows a locally incorporated entity to be treated as a foreign national by agreement. That provision, coupled with a contractual clause setting forth such an agreement, was invoked in 45% of all contract-based cases studied. Constituent Subdivisions or Agencies have participated in 18% of ICSID contract-based arbitrations, primarily as respondents. Multiplicity of parties is a notable feature of the contract-based caseload, with approximately 27% of such cases involving at least two claimants, and 11% involving at least two respondents. Counterclaims are raised in 26% of contract-based arbitrations and succeed in approximately 31% of those.

Of the 140 concluded contract-based arbitrations, 43% were settled or otherwise discontinued, compared to 34% for the general caseload. Among the 57% of contract-based arbitrations decided by a tribunal, awards upheld claims in whole or in part in 66% of cases, compared to 49% across the overall ICSID caseload. Contract-based arbitrations are also more time-efficient, averaging 40 months from registration to conclusion against an overall average of 47 months.

Claimants succeed on liability and damages in 62% of contract-based awards, compared to 45% across the overall ICSID caseload. Contract-based arbitrations are less likely to conclude with a ruling awarding no damages (38% compared to 55% of the overall caseload). In awards at the higher end of the amount spectrum, i.e., damages awarded above US$50 million, prevailing parties in contract-based arbitrations are slightly more successful than in the overall ICSID caseload. The rate of compliance in contract-based arbitration awards is high, with 92% of awards with known outcomes voluntarily complied with or settled.

A New Set of Model Clauses
ICSID also released a revised set of Model Clauses for Contracts, to be published in the three official languages of the Centre, covering all its dispute resolution offerings: arbitration, conciliation, mediation, and fact-finding. The Model Clauses reflect the specific requirements of each ICSID framework, and are provided for: arbitration and conciliation under the ICSID Convention and the ICSID Additional Facility Rules, mediation under the ICSID Mediation Rules, and ICSID fact-finding procedures. Clauses for certain types of proceedings under other sets of rules are also included.

The Model Clauses were last amended in 1993. The revised Model Clauses provide suggested language to record the consent of disputing parties in investment contracts (including language for multi-tier consent clauses), and also include clauses that address topics such as the jurisdictional requirements or preconditions to registration of proceedings, scope of consent, and other procedural matters (including applicable law, access to provisional measures, and procedural language(s), among others). The Model Clauses serve as practical templates that parties can adapt and adopt depending on their specific needs.