Summary Dismissal of ICSID Proceedings

Abstract

In just 10 years since its inception, the new summary dismissal procedure under the ICSID regime has proven to be quite popular. Up until May 2016, 22 tribunals had already dealt with the new mechanism, with more than half of the proceedings instituted in the period between 2014 and 2016 alone. 2 Just like with transparency, 3 it seems that the summary dismissal procedure is becoming another procedural concept initially used by international courts and (investment) tribunals 4 with the potential to also influence the commercial arbitration world. 5 This merits a fresh look at the International Centre for Settlement of Investment Disputes (ICSID) summary dismissal procedure contained in Arbitration Rule 41(5), which however is best begun by briefly recalling the history of the rule. In October 2004, the ICSID Secretariat published a discussion paper on ‘Possible Improvements of the Framework for ICSID Arbitration’. 6 Under the heading ‘Preliminary Procedures’, the Secretariat suggested establishing a special procedure that allowed a tribunal to dismiss all or part of the claim at an early stage of the case on an expedited basis. 7 The suggestion was in part a reaction to the limited screening power of the Secretary-General of ICSID under Article 36(3) of the ICSID Convention. 8 Pursuant to Article 36(3), the Secretary-General of ICSID shall register a disputing party’s request for arbitration unless the Secretary-General finds on the basis of information contained in the request that the dispute is manifestly outside the jurisdiction of the Centre. However, the screening power of the Secretary-General does not extend to the merits of the dispute or to cases where jurisdiction is merely doubtful but not manifestly lacking. 9 As a consequence, the Secretary-General would have to register a request for arbitration even if he or she believed the claim to be unmeritorious or abusive. 10 The new procedure was intended to address concerns that the Secretary-General’s screening power was too limited, 11 and took into account complaints by some respondent governments that unmeritorious claims might only be fully addressed by a tribunal after spending considerable money and time on copious arbitral proceedings. 12