Arbitration is surviving and thriving - don't believe everything you hear

Hypothesis: The number of arbitrations is decreasing

In recent years the arbitration press and conference circuit has spent much time reflecting on whether there has been a reduction in the number of arbitrations being filed. If true, such a trend would have major implications for commercial parties who would usually choose to include arbitration agreements in their contracts – as well as dispute resolution lawyers across the board – and would raise the question as to what forum parties are choosing instead. They may choose different institutions or seats of arbitration or may even move away from arbitration as their preferred forum for dispute resolution.

The importance of this possibility led to CMS conducting its own investigation to test if this hypothesis is true. Are there trends? Has there been a decline in the numbers of arbitrations being filed? This is the first in a series of data sheets to explore this, and related topics, in detail.

Research and methodology

In order to conduct this analysis, CMS carried out desk research and qualitative interviews:

Although in recent years some institutions reported slight dips in the numbers of registered arbitrations, these have not been hugely significant and do not appear to indicate any long-term trends. The falls generally have been attributed to numbers settling back after spikes in 2020 and 2021 related to the COVID pandemic and other international geopolitical issues. Overall case numbers reached a peak of 8,200 cases in 2020 across our sample of institutions, falling back slightly to 7,800 in 2022, still comfortably above the 6,600 seen in 2017. 

APAC tops region rankings 

Regionally, the best performing market (in terms of the number of arbitrations filed) is APAC, with over 5,000 arbitrations filed in 2022 followed by Europe, the Middle East and then Africa.

The absolute numbers are representative of the institutions that we have selected, and which publish their figures. However, even on a percentage basis, overall numbers remain robust, and in particular the Middle East has seen strong double-digit growth in case numbers since 2018. In APAC, while 2021 and 2022 have been largely flat, there has been strong growth overall since 2017.

Investor State disputes fall

One trend that appears to represent a significant change is the overall fall in Investor State disputes; aside from a peak in 2021, numbers in 2022 were down 10% on 2017. Commercial arbitration, however, has more than made up for this, showing an increase of 28% since 2017. 

From our investigations and interviews with these institutions:

• there is a general expectation that more of a split will develop between the leading institutions and smaller regional centres – giving users more flexibility in terms of their choice of institution; and
• there is clear scope for more specialist centres to begin emerging – particularly in the fields of sport, technology and healthcare – with these specialist centres coexisting with the more generalist institutions. 

Conclusion: arbitration continues to be a popular option

In conclusion, the data is clear, and the hypothesis has not been proven – where disputes require formal dispute resolution processes to resolve them, arbitration continues to be one of the most popular options and the number of arbitrations is not decreasing. Looking ahead, we expect this level of activity to continue – particularly across Middle East and Asia. 

If you would like to discuss our findings in more detail, please get in touch with our team.

The CMS team would like to thank trainees Niluka Perera and Henry Davine (secondee) for their invaluable assistance with the research and interviews that allowed for the preparation of this report.