In a new study (available only in French, the Veblen Institute highlights France’s position within the investment arbitration industry.

Paris has become one of the world’s leading centres for investment arbitration, a controversial mechanism that grants international investors the right to sue the host states of their investments in order to secure potentially colossal financial compensation. This right may be exercised when governments adopt new regulations that are likely to affect their investments or their expected profits.

Based on an analysis of known investment arbitration cases and the key players in the sector, the study shows that France occupies a strategic position within this industry.

Paris, one of the world’s arbitration capitals

The arbitration industry is well established in France and actively promotes its activities, particularly by highlighting the economic benefits and international influence it believes it generates for the country According to a 2025 study by FTI Consulting, the Paris market for international arbitration (commercial and investment) is worth nearly €775 million a year and supports several thousand jobs, mainly within specialist law firms, expert firms, arbitration institutions and third-party funders.

France is pursuing a strategy aimed at enhancing its appeal as an international arbitration centre. Already recognised as such thanks to the presence of the headquarters of the International Court of Arbitration of the International Chamber of Commerce (ICC), Paris is consolidating this position with the forthcoming opening of a European office of the International Centre for Settlement of Investment Disputes (ICSID). This development also forms part of the ongoing reform of French arbitration law, which aims to modernise and further enhance the attractiveness of the national legal framework, which is already highly favourable to arbitration.

All these factors combine to make Paris one of the world’s leading centres for arbitration, including in the field of Investor-State Dispute Settlement (ISDS).

With regard to ISDS, the study reveals that:

–  France ranks third in the world, both in terms of the number of arbitrators involved in disputes and the total number of cases handled by these arbitrators.
–  In total, 54 French arbitrators have taken part in 405 known proceedings.
–  The vast majority of French arbitrators are appointed by the respondent States.
–  Among the 395 cases recorded involving at least one French arbitrator, 98 different States were respondents, demonstrating the presence of French arbitrators in disputes spanning all the major regions of the world.
–  Latin America is the region most frequently involved in disputes in which French arbitrators are involved, followed by the European Union in second place. These two regions account for more than half of the disputes.
–  There is a certain concentration of disputes relating to the energy sector and the extractive industries.
–  French arbitrators are more frequently associated with decisions favourable to states. Cases involving at least one French arbitrator are decided in favour of the state in 61.8% of cases, compared with 51.8% when no French arbitrator sits on the tribunal. This trend is particularly pronounced when the French arbitrator chairs the tribunal (66.1% of decisions in favour of states) and when the French arbitrator is appointed by the claimant investor (61.1%).

This context helps explain the persistent reluctance of successive French governments to give up investment arbitration, despite growing concerns about the restrictions it can impose on states’ regulatory powers nd the financial costs that arbitration proceedings and their unfavourable outcomes can entail for them (1). However, the experience gained by French arbitrators acting as state respondents in ISDS disputes should provide a basis for much more far-reaching reforms of this investment protection regime.

This is illustrated by the remarks made by Alain Pellet, a French arbitrator (2), at the 11th Annual Conference on Investment Treaties at the OECD on 30 March 2026:

“The settlement of disputes between states is not perfect, but it is less imperfect than the settlement of disputes between investors and states. The current circumstances are truly conducive to making a genuine effort to improve the settlement of disputes between states. We are at a turning point where it is reasonable to think that we can try to combine the proposals. This is truly an opportunity to try to move away from this obsession with ISDS, which I find rather dreadful. There are many other ways to protect investments and attract investment than to place one’s trust in this limited form of dispute settlement.”

The study thus highlights France’s central role in the investment arbitration industry, both as an arbitration centre and through the influence exerted by its arbitrators in ISDS proceedings. It therefore emphasises France’s particular responsibility in the debate on the future development of this regime.

Our recommendations:

• Ensure transparency regarding cases and the financial sums involved: make it compulsory for arbitral institutions to publish details of all RDIE proceedings, the sums claimed and those ultimately awarded.
• Stop the expansion of investment arbitration: France and the EU should refrain from including investment protection provisions featuring an ISDS mechanism or the investment court system(3) in new trade and/or investment agreements.
• Phasing out investment arbitration
  ● Systematic termination of existing bilateral investment treaties (BITs). In particular, the European Commission should call on EU Member States to put an end to the old BITs, which are incompatible with European law. This incompatibility is the subject of an infringement complaint (4) brought by several civil society organisations against four Member States (France, Germany, Sweden and Austria).
  ● At the very least, France and the EU should undertake a review of the existing stock of treaties to ensure they meet the key requirements set out by the European Parliament in 2022 (5)

Notes:
(1) This position was particularly evident during the trade negotiations between the European Union and Canada. Whilst the European Commission was considering abandoning plans to include a chapter on investment protection in the trade negotiations with Canada, it was France which, in 2015 and with Germany’s support, proposed a procedural reform of the mechanism in order to retain it.
(2) Alain Pellet is Professor emeritus at the University of Paris Nanterre, former Chair of the United Nations International Law Commission, appointed to the ICSID List of Arbitrators by the Chair of the Administrative Council (2011–2017) and to the List of Arbitrators under Annex VII of the United Nations Convention on the Law of the Sea (since 2015)
(3) The EU has recently concluded several agreements containing chapters on investment protection, such as the treaties with Canada, Singapore, Vietnam and Chile, which are awaiting ratification by the Member States, as well as the EU–Mexico Agreement, which is awaiting ratification at EU level
(4) About the complaint
(5) European Parliament, resolution of 23 June 2022 on the future of the EU’s international investment policy (2021/2176(INI))