It comes as no surprise that 90% of respondents in White & Case's 2021 International Arbitration Survey prefer arbitration—either standalone or in conjunction with alternative dispute resolution methods—to litigation, especially as businesses emphasize conserving capital and resources during economic uncertainty.¹
As arbitration caseloads continue to rise, arbitral institutions are increasingly accepting funding alternatives as part and parcel of the process and many have adopted arbitration financing rules in their international frameworks. Most recently, ACICA included a provision on third-party funding that created very limited disclosure obligations on parties utilizing financing.2 The ICC—consistently the most popular arbitral institution worldwide—also adopted reasonable disclosure rules for third-party funding in recognition of the value and popularity of the practice.3
This year, we expect a new wave of arbitration cases in Latin American countries and related development of Latin American arbitral institutions and seats. As we enter the third year of a global pandemic we expect construction disputes to grow as the industry remains disproportionately affected by Covid-19. We also anticipate several arbitral tribunals will follow in the footsteps of major 2021 decisions (most recently in Tenke Fungurume Mining S.A. v Katanga Contracting Services⁴) and increasingly allow parties to recover legal finance costs.
Latin America will take center stage in 2022
Latin America has endured years of socioeconomic and political turbulence, and more recently, the pandemic devastated many countries. While the Economic Commission for Latin America and Caribbean (ECLAC) reported 5.2% as its average growth estimate for the entire region in 2021, that number is expected to drop to 2.9% in 2022.⁵ Latin America's political and civil instability, combined with ongoing economic problems, contribute to international arbitration's popularity there. Given these factors, we anticipate a growing number of treaty and contractual arbitration cases in 2022.
As the region holds a fifth of the world's oil reserves, the extractive industry will likely experience the most disputes.⁶ Countries whose economies are particularly dependent on oil and gas—Venezuela, Ecuador and Bolivia, to name a few—could be involved in a significant percentage of these disputes.⁷ Furthermore, these disputes will be increasingly complex and involve foreign investors, many of whom will turn to international arbitration.
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