In Abaclat and others v Argentina (ICSID Case No ARB/07/5), the majority of an ICSID tribunal ruled that it has jurisdiction to entertain "mass claims" advanced by over 60,000 Italian bondholders, rejecting arguments that specific consent would be required for such proceedings (see Legal update, Tribunal has jurisdiction over collective claim (ICSID).) In a novel decision, the tribunal decided that the ICSID procedural framework could be adapted to deal with collective claims effectively and that the claims were, therefore, admissible. However, the precise method by which such claims will be determined remains to be defined and it will be interesting to see whether these claims can be successfully disposed of on a collective basis.

Various issues relating to jurisdiction have been left over to be dealt with individually. The extent to which individual issues will arise, or be permitted, in connection with the substantive claims also remains to be seen.

The decision is also of significance because of the tribunal's refusal to apply the Salini criteria in the context of defining "investments".

The dissenting arbitrator, Professor Georges Abi-Saab, strongly disagreed with the majority, arguing that the bonds do not constitute a "protected investment" under the ICSID Convention or the Argentina-Italy bilateral investment treaty (BIT). He also considered that, absent Argentina's consent, the tribunal has no jurisdiction over collective claims, and further it does not have the power to elaborate new procedures to handle such an action. Professor Georges Abi-Saab has since resigned from the tribunal and a replacement arbitrator is yet to be appointed.

In 2011, two tribunals ruled that they lacked jurisdiction to determine counterclaims brought by a respondent state in investment treaty arbitration. In Paushok and others v Government of Mongolia (UNCITRAL Arbitration Rules) (Award of 28 April 2011 on Jurisdiction and Liability), the counterclaims were directed against a company controlled by the claimants which was not a party to arbitration. The respondent failed to provide evidence proving a link between the claimants and the alleged breaches of law committed by that company (see Legal update, High threshold for counterclaims (investment treaty)).

In Roussalis v Romania (ICSID Case No ARB/06/1), a majority of the ICSID tribunal found that the wording of the Greece-Romania BIT limited the parties' consent to claims brought by investors about obligations of the host state. The BIT imposed no obligations on investors, only on contracting states, indicating that the parties intended to refer only claims against the host state to arbitration, and not claims by the host state. The dissenting arbitrator disagreed, arguing that the majority view would mean that the respondent state would be obliged to pursue its claims in its own courts, rather than in the neutral forum selected by the investor. This outcome, he contended, would be both inefficient and absurd (see Legal update, No jurisdiction to determine state's counterclaim (ICSID)).

Both decisions confirm that the possibility of raising counterclaims in investment treaty arbitration remains limited.

A number of awards this year confirm that, while challenges to arbitrators continue to be a growing trend, in practice it will be difficult to persuade a tribunal of the merits of any such challenge.

In Tidewater Inc and others v Venezuela (ICSID Case No ARB/10/5), the tribunal refused to disqualify the respondent-appointed arbitrator for failing to disclose previous multiple appointments by the respondent (see Legal update, Mere non-disclosure of multiple appointments not enough to disqualify an ICSID arbitrator). The tribunal considered that non-disclosure of previous appointments was not, of itself, sufficient to disqualify an arbitrator and that multiple appointments in unrelated cases should be regarded as a "neutral" factor in a challenge application.

The chairman of the Administrative Council of ICSID took a similar approach in Universal Compression International Holdings SLU v Bolivarian Republic of Venezuela (ICSID Case No ARB/10/9), rejecting two applications to disqualify both of the party-appointed arbitrators because one had been repeatedly appointed by the respondent and the other had acted as co-counsel with the claimant's lawyers on previous occasions (see Legal update, Challenge to ICSID arbitrators rejected).

In OPIC Karimum Corporation v Bolivarian Republic of Venezuela (ICSID Case No ARB/10/14), the tribunal also rejected the application to disqualify the respondent-appointed arbitrator because he had previously been appointed by the respondent and its counsel on a number of occasions. However, the tribunal disagreed with the approach taken in the Tidewater case. Here, the tribunal considered that multiple appointments are an "objective indication" that the party and its counsel consider that they are more likely to succeed with their preferred arbitrator on the panel. The decision illustrates the fine line that parties and their counsel must tread when choosing an arbitrator (see Legal update, Multiple appointments potentially relevant to disqualification of ICSID arbitrator).

These decisions highlight the importance of including both private and publicly available information regarding previous appointments to avoid the significant time and costs which will inevitably be involved where grounds for disqualification may potentially exist.

As previously reported, the UNCITRAL Working Group II has been continuing its discussions on transparency in treaty-based investor-state arbitration (see Article, Looking ahead to the second half of 2011: arbitration). Having decided that a legal standard on transparency should take the form of rules, rather than guidelines at its 55th session in October 2011, the Working Group started reviewing draft rules on transparency that had been prepared by the Secretariat (see Legal update, UNCITRAL's Arbitration working group continues transparency discussions). The Secretariat was asked to prepare revised draft rules, taking into account the Working Group's review. It has now published those revised draft rules, together with:

The documents are available on UNCITRAL's website and will be considered at the 56th session of the working group in February 2012.

We will continue to monitor these developments.