Multilateral Development Banks and Dispute Resolution

Remarks delivered at the Conference on International Exchange of Professionals

Shanghai, 19-25 October 2025

Gerard J. Sanders

 

INTRODUCTION

As with any financier, multilateral development banks - such as the World Bank, Asian Development Bank, Asian Infrastructure Investment Bank and New Development Bank - sometimes find themselves in litigious situations, usually as the party seeking to enforce an obligation, often in the context of a development project they are financing. Sometimes, it is the MDB being pursued, not so much by borrowers but by disappointed bidders for supply contracts or by aggrieved staff for example. MDB member representatives may also find themselves in dispute with the institution, for example over interpretation of the charter regarding what kind of investment activity is permissible, and demand a binding determination. Occasionally, third parties with whom the institution has no treaty-based or contractual relationship seek to press a claim in tort or, in the case of individuals or groups adversely affected by MDB financed projects, to hold the institution accountable if it fails to abide by certain of its own policies, particularly in the environmental and social protection sphere.

In these brief remarks, I would like to explain – from the perspective of someone who has practiced in these institutions - how MDBs anticipate these kinds of disputes and, where possible, regulate how they should be resolved. How, in practice, are the different kinds of disputes actually managed? What factors influence adopted approaches? What can be done to improve the dispute resolution experience?