ICSID Annulment Research Articles

Revisiting the risk of undesired appeal in investment treaty arbitration: is deference to the tribunal’s award still less likely in the ICSID context?

Abstract Although they are generally not subject to appeal the way court decisions typically are, investor-State arbitration awards can be reviewed—and potentially set aside—in a number of ways and on various bases. In this respect, investor-State arbitration under the auspices of ICSID is notable in that it provides a self-contained system for the review of arbitral awards by ICSID-appointed ad hoc committees. In the period 2000–2010, this feature of the ICSID system attracted criticism as ad hoc committees appeared to be overreaching in their review of arbitral awards, exercising less deference to the tribunal’s decisions than what would be expected given the narrow bases for setting aside an award under the ICSID Convention. This article revisits the issue 10 years later, exploring whether ICSID practice has evolved in these areas and whether there remains a greater risk of unexpected de novo review by ICSID ad hoc committees. Looking at recent ICSID annulment decisions as well as the case law of arbitration-friendly jurisdictions, the article concludes that although the ICSID ad hoc committees have recently shown more restraint, they continue to interfere more with the tribunal’s reasoning and decisions than many courts exercising the same function.

On judicial autonomy and the autonomy of the parties in international adjudication, with special regard to investment arbitration and ICSID annulment proceedings

AbstractThe article addresses the relationship between judicial autonomy and the autonomy of the parties principles. The issue is not addressed so much through the lens of the procedural rules on the conduct of the proceedings, as through the prism of the general principles of adjudication which dictate the boundaries of judicial, or arbitral, decision-making. The focus will be on the combination between the principles ne, ultra and infra, petita and non liquet as they flow from the consensual nature of international adjudication and arbitration, on the one hand, and the principle jura novit curia which mirrors the autonomy of the judicial function, on the other. The analysis does not draw from national legal systems, nor from commercial arbitration. Due to the significantly different configuration of the principles at issue in different jurisdictions, it will focus on international litigation as an autonomous phenomenon. It will address firstly inter-state adjudication and then international investment arbitration. Special attention will be given to the ICSID system in consideration of its unique annulment mechanism. The article draws from researched case law an encouragement, if not simply the need, for international adjudicative bodies to undertake a proactive attitude in the conduct of the proceedings. More generally potentials emerge from the analysis, to the effect that not only inter-state adjudication may impact on investor-state arbitration, but also vice versa.

ICSID Arbitration Reform: Mapping Concerns of Users and How to Address Them

This paper summarises key practical concerns of some members of the Investment Treaty Forum related to ICSID arbitration, as well as a wider community of experts, how the ICSID reform proposals address these concerns and makes suggestions for further improvement. The paper looks at key concerns of ICSID arbitration users such as timely appointment of arbitrators and challenges to it, over-committed arbitrators and their conflicts of interest, access to emergency arbitrators and fast-track arbitration procedure, procedure for summary rejection of claims and amicable settlement of disputes, consolidation of proceedings, allocation of costs and security for costs, timely rendering of awards and consistency of ICSID annulment decisions. The paper also includes a comparison between the ICSID Arbitration Rules and other major arbitration rules designed for investment arbitration proceedings: the UNCITRAL Arbitration Rules, the Arbitration Institute of the Stockholm Chamber of Commerce Arbitration Rules (SCC Rules), and the 2017 EU-Canada Comprehensive Economic and Trade Agreement (CETA).

Present and Future of ICSID Annulment: The Path to an Appellate Body?

Present and Future of ICSID Annulment: The Path to an Appellate Body?

ICSID Annulment Procedure and the WTO Appellate System: The Case for an Appellate System for Investment Arbitration

In comparison to the WTO appellate system, an investment dispute settlement annulment committee has a very limited mandate. Consequently, in recent years, deficiency in the quality of some investment arbitration awards has reinvigorated the debate as to the need for an ICSID appellate facility. While some remain unconvinced of the relevance of such a facility, there is an emerging consensus that the deficiencies in the awards currently being made hinders the predictability of the jurisprudence of investment arbitration and casts doubt on the legitimacy of the system. The ICSID annual report of 2011 recognised the need for an appellate review mechanism for investment arbitration, but subsequent annual reports have been conspicuously silent on this topic and no steps have been taken to follow it up. However, with the WTO disputes settlement system being the only international third party adjudicative body with a functioning appeal system in the area of trade law, it is arguably necessary to think of it as an institution that will inspire the establishment of an investment appeal mechanism. Critics of this potential development argue that the WTO contains a significantly interconnected body of treaty law while the ICSID normally deals with more disparate sets of treaties. Among other things, this contention ignores the existence of customary international law in the crystallisation of both systems. In spite of the debate over the nature of the two systems, there is a need to acknowledge that an appellate system would at least help to improve both the awards and the ICSID?s legitimacy. While recognising the successes as well as the challenges so far faced by the WTO Appellate Body, we argue in this paper that an ICSID appellate system would enhance the legitimacy of investment arbitration, and institute fairness and balance among the various players in investment disputes.

ICSID Annulment Procedure and the WTO Appellate System: The Case for an Appellate System for Investment Arbitration

ICSID Annulment Procedure and the WTO Appellate System: The Case for an Appellate System for Investment Arbitration

ICSID Annulment Committee Appointments: Too Much Discretion for the Chairman?

This article critically examines the system by which individuals are appointed to ICSID annulment committees. It observes the largely unilateral and highly discretionary role of the ICSID Chairman in this process, urging greater participation in the selection of annulment committees by the member states of ICSID in order to improve the transparency and legitimacy in this crucial feature of ICSID dispute settlement. A procedure similar to that adopted with respect to the World Trade Organization’s Appellate Body may be instructive in this regard.

Commerce Group Corp & San Sebastian Gold Mines, Inc v Republic of El Salvador: Security for Costs in ICSID Proceedings

Does a tribunal or ad hoc annulment committee constituted under the ICSID Convention have the power to order security for costs? This is the question that faced the Committee in Commerce Group Corp & San Sebastian Gold Mines, Inc v Republic of El Salvador. The Committee concluded that it did have an inherent power to order security for costs, although it held that it could exercise this power ‘only in extreme circumstances, for example, where abuse or serious misconduct has been evidenced’.3 This brief comment reviews the underlying dispute (Section II), the Respondent’s application for annulment and its application in the annulment proceedings for security for costs (Section III), and offers a comment on the Committee’s decision in the context of the recognition by ICSID tribunals and annulment committees of their the inherent powers (Section IV). It concludes that, although the Committee declined to order security for...

Manifest Excess of Powers as a Ground for the Annulment of ICSID Awards

This article provides academics and practitioners with a thorough overview and analysis of one of the most often invoked grounds in ICSID annulment procedures: ‘manifest excess of powers’. ICSID annulment committees have been criticised in the past for abandoning the distinction between appeal and annulment. In practice, recent annulment committees have shown considerable restraint when considering whether a tribunal has manifestly exceeded its powers. Although there have been two instances in recent years where the annulment committee annulled for what was effectively a (perceived) misapplication of the law by the tribunal, the latest ad hoc committees have not followed their example. Hopefully future committees will adopt an equally cautious approach.

Background Paper on Annulment For the Administrative Council of ICSID

This background paper was prepared by the ICSID Secretariat in response to a matter raised at the 2011 Annual Meeting of the ICSID Administrative Council. The paper summarizes the drafting history of the ICSID Convention provisions on annulment, outlines the conduct of an ICSID annulment proceeding, and describes the standards and grounds for annulment. The information in the paper is current as of June 30, 2012. The paper does not take a position on the correctness of any particular decision and does not constitute legal advice. This paper was transmitted with its seven annexes to all ICSID Contracting States on August 10, 2012. The report’s seven annexes are not reproduced in this issue of the ICSID Review—Foreign Investment Law Journal due to their length, but they are available on ICSID’s website at http://www.worldbank.org/icsid.

Stay of Enforcement Decisions in ICSID Annulment Proceedings: Taking Stock

Article 52(5) of the ICSID Convention allows an applicant for annulment of an ICSID award to request that enforcement of the award be stayed while the annulment decision is pending. Although ICSID ad hoc committees have always granted such requests, they have disagreed as to whether a continued stay of enforcement should be conditional. One of the key concerns shared by these committees appears to be that continuation or termination of the stay should not undermine the annulment application's practical outcome.

From ICSID Annulment to Appeal Half Way Down the Slippery Slope

AbstractAnnulment under the ICSID Convention offers a limited remedy on the basis of a few carefully circumscribed grounds. Recently, losing parties have attacked awards for a wide array of reasons. Some ad hoc committees deciding these requests for annulment have taken a broad view of their powers. They have given some grounds for annulment an extremely wide interpretation thereby blurring the line between annulment and appeal. For instance, a perceived mistake in the interpretation of a rule of law has been regarded as an excess of powers for failure to apply the proper law. One ad hoc committee went beyond the reasons for annulment put forward by the applicant. It actively searched for additional grounds and eventually annulled the award for a reason not relied upon by the applicant. Some ad hoc committees have gone beyond the task given to them by the ICSID Convention, offering general criticism and advice to tribunals. The risk that an ICSID award will be annulled is now higher than that a non-ICSID award will be set aside by a competent domestic court.

ICSID Arbitration and Annulment for Failure to State Reasons

ICSID Arbitration and Annulment for Failure to State Reasons

Reputation and Reality in the ICSID Annulment Process: Understanding the Distinction Between Annulment and Appeal

Reputation and Reality in the ICSID Annulment Process: Understanding the Distinction Between Annulment and Appeal