Hidden in the curtain of Article 44: formation rules of arbitration agreements and ICSID Arbitration Rules

Abstract

Abstract This article surveys the practice of the application of Article 44 of the International Centre for Settlement of Investment Disputes (ICSID) Convention. It shows that ICSID arbitrations pursuant to bilateral investment treaties have been historically subjected to the ICSID Arbitration Rules in effect on the date when investors institute proceedings. But it appears that this is mainly because the parties specifically agree to apply the latest ICSID Arbitration Rules. The article invites a discussion on a technique, which might lead to the application of not necessarily the latest ICSID Rules. The article focuses on the traditional formation rules of arbitration agreements, namely that an arbitration agreement is formed based on the terms of the State’s offer to arbitrate. To that end, the proposed approach allows to argue that the investor who accepts the State’s offer to arbitrate tacitly accepts also the ICSID Arbitration Rules effective at the time when the State made the offer to arbitrate. The article explains that Article 44 includes a possibility to apply the orthodox formation rules thereby showing a greater respect to the parties’ consent.