ABUSIVE CONDUCT IN INVESTOR-STATE ARBITRATION: A FOCUS ON FRIVOLOUS CLAIMS

The structural deficiencies of the investor-state dispute settlement (ISDS) system pave the way for foreign investors’ abusive conduct. As one of the most frequently faced forms of abusive conduct, the use of frivolous claims has become a growing concern. Despite lacking legal merit, frivolous claims can generate damaging consequences for host states. This article first discusses the characteristics of frivolous claims in ISDS practice through examples from arbitral case law. It subsequently examines the existing tools and mechanisms that can be employed to cope with this phenomenon, focusing primarily on early dismissal mechanisms in institutional rules and investment treaties and security for costs. Finally, the efficacy of third-party funding in curtailing frivolous claims is addressed

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