‘Security for Costs’ Under the ICSID Regime: Does it Prevent ‘Arbitral Hit-and-Runs’ or Does it Unduly Stifle Third-Party Funded Investors’ Due Process Rights?

Authors

Young Hye (Martina) Chun

First Page

477

Last Page

501

Document Type

Article

Abstract

This Article considers security for costs under the ICSID regime. Given that all security for costs have been ordered against third-party funded investors—with the latest decision, Unionmatex, in January 2020, this Article examines prior ICSID decisions to determine whether third-party funded investors are prejudiced when it comes to security for costs. It further addresses whether an applicant’s right to a costs award is a “protectable right” under Article 47 and concludes that it is not. Finding that “arbitral hit-and-run” is a hypothetical concern not based on empirical evidence and providing that ICSID’s new proposed rules to its Arbitration Rules will only further impede third-party funded parties’ right of access to justice, this Article concludes that there is a clear prejudice against third-party funded parties. Finally, this Article concludes by reflecting that this prejudice may undermine one of the purposes for which ICSID Convention was created: to provide a forum for aggrieved investors to resolve their investment disputes—no matter how poor and regardless of whether they are funded by a third-party.

Recommended Citation

Young Hye (Martina) Chun, ‘Security for Costs’ Under the ICSID Regime: Does it Prevent ‘Arbitral Hit-and-Runs’ or Does it Unduly Stifle Third-Party Funded Investors’ Due Process Rights?, 21 Pepp. Disp. Resol. L.J. 477 (2021)
Available at: https://digitalcommons.pepperdine.edu/drlj/vol21/iss2/5