Symposium on International Investment Law & Contemporary Crises – Part 3 of 8
Do Investment Treaties Accord Too Much (or Too Little) Protection to Banking & Finance Investments?

Are banking and finance investors over-protected under investment treaties - or under-utilising ISDS altogether?

In this morning’s symposium contribution, Kai-Chieh Chan (Associate, AHALI Dispute Resolution) interrogates a striking paradox: despite the global financial services sector exceeding $33 trillion in size, only around 5-10% of ISDS claims arise from banking and finance investments.

Why the disconnect?

Drawing on empirical analysis of 149 cases, the piece highlights:

- Banking and finance disputes cluster around crisis periods
- Investors file claims on average 3.1 years after the alleged breach
- Most cases resolve in 2-4 years—faster than ISDS averages
- Investors have a slightly lower win rate than in ISDS generally
- Tribunals frequently defer to States in bona fide emergency interventions

Contrary to common perception, tribunals do not ignore States’ regulatory authority. In emergency situations—such as financial stabilisation measures—States prevail in the majority of merits decisions.

At the same time, banking and finance disputes show comparatively high settlement rates, suggesting ISDS remains an effective mechanism for negotiated resolution.

The broader takeaway? Investment law in the financial sector reflects balance rather than excess—meaningful protection, but not immunity from regulatory intervention.

Read the full contribution here: https://lnkd.in/eSp6pUtR