Origins and unique features
Arbitrations administered by the International Centre for Settlement of Investment Disputes (ICSID, or the Centre) are unlike arbitrations under the auspices of any other institution. This is mainly due to the fact that, unlike other arbitration institutions, ICSID was specifically designed to facilitate the settlement of disputes between states and investors of other states.
The Centre was established under the 1965 Convention on the Settlement of Investment Disputes between States and Nationals of Other States (often referred to as the Washington or ICSID Convention) which came into force on 14 October 1966 (the Convention).
Of the many respects in which ICSID arbitration is unusual, two are most striking. First, only certain types of parties may have recourse to ICSID arbitration and even then only against certain other types of parties. This is known as the requirement ratione personae. Secondly, even if the ratione personae requirement is met, parties may only refer certain types of dispute to ICSID arbitration. This is known as the ratione materiae requirement. By contrast, the contemporary rules of the main non-ICSID arbitration institutions have rules which, broadly speaking, confer wide powers on the parties to determine what types of disputes they submit to arbitration. Restrictions on the categories of users of those institutions are rare, if not nonexistent. Moreover, the Centre has an organisational framework which includes an interdependence on a variety of complementary rules and regulations that makes its proceedings substantially more complex than arbitration proceedings conducted by most other institutions. These rules and regulations also include detailed provisions regarding the commencement of proceedings, the selection of arbitrators (as well as their replacement), the avenues open to disgruntled parties to review ICSID awards and the enforcement of those awards. This chapter, which aims to provide an introduction to ICSID arbitration, will discuss the main features of ICSID arbitration with an emphasis on those of its characteristics which distinguish it from arbitration under the auspices of other institutions.
The Centre provides facilities for the conciliation and arbitration of disputes between states which have ratified the Convention (contracting states) and nationals of other contracting states, although by its Additional Facility Rules the Centre can administer certain types of arbitrations that would otherwise fall outside of the Convention, as explained in more detail below under the heading ‘The Centre’s Additional Facility’.
The Convention established the Centre as an autonomous international organisation, although its general expenses are financed out of the World Bank’s budget. The close relationship between the Centre and the World Bank does not end there. The World Bank funds the Centre’s Secretariat and provides the Centre’s accommodation as well as the President of the Centre’s Administrative Council (the Council). Further, representatives who are nominated by contracting states as the World Bank’s governors are Council members unless contracting states make contrary delegations.
Geographical seat and contact details
The Centre has its offices at the offices of the World Bank in Washington, DC;
its full address and contact details are:
Secretariat
ICSID
1818 H Street NW
Washington, DC 20433
USA
Tel: +1 202 458 1534
Fax: +1 202 522 2615
Website: www.worldbank.org/icsid
Regional scope
Article 2 of the Convention provides that the seat of the Centre shall be at the principal office of the World Bank, although it may be moved to another place by decision of the Council adopted by two-thirds of its members. Since ICSID’s creation in 1965, the Centre has therefore been at the offices of the World Bank in Washington, DC.
The Centre does not currently have any offices other than its headquarters in Washington, DC. However, as with many other arbitration institutions, this does not imply any limited or otherwise regional scope. As is demonstrated by the statistics provided below as well as the extensive geographical range of states or nationals of states that have been parties to ICSID arbitrations, the Centre’s scope is truly global.
Useful statistics
The Convention has been warmly received throughout the world. As at May 2005, some 155 states had signed the Convention and some 142 states had ratified it (for an up-to-date list see www.worldbank.org/icsid/constate/ constate.htm). According to the Centre’s 2005 Annual Report, the majority of the Centre’s pending caseload involves Western hemisphere countries with the remaining cases evenly distributed among countries in Eastern Europe, Central Asia, the Middle East and North Africa, Sub-Saharan Africa, and South and East Asia. One-third of the current cases relate to projects in the energy sector and the rest involve investment disputes in virtually all other economic sectors.
Despite the Centre having been established in 1965, in the 35 years to July 2000 the Centre had registered only 66 arbitration cases. However, as of 30 June 2005, the number of registered cases totalled 184. This reflects an exceptional increase in recent years of the use of the ICSID facility to resolve disputes. In the first six months of 2005 alone, the Centre registered 11 new arbitration proceedings. In the Centre’s fiscal year 2005, it registered 24 new arbitration proceedings.
One of the principal reasons for this rapid growth in the number of disputes submitted to the Centre has been growth in cross-border trade and investment, coupled with the relatively recent trend of states entering into investment protection treaties in ever-increasing numbers. Generally speaking these treaties aim both to encourage inward investment from other nationals and to protect investments made by nationals abroad. Many of these treaties contain reference to ICSID as an optional dispute resolution mechanism with the result that consent to ICSID arbitration is increasingly founded, at least in part, on investment treaties. There are now more than 2,200 such treaties in existence, many of which are listed in the Centre’s database which can be interrogated at www.worldbank.org/icsid/treaties.htm. Also making a contribution to the explosion in the number of arbitrations being submitted to the Centre is the national investment protection legislation of many countries that provides for recourse to ICSID arbitration and investment agreements between contracting states and their nationals that are also beginning to contain express references to the Centre. Finally, an increasing awareness among arbitration practitioners of the benefits, particularly to investors, of this type of arbitration is resulting in more treaty claims being advanced.
Of the 24 new arbitration proceedings registered in 2004/05, 23 were initiated on the basis of ICSID arbitration provisions contained in bilateral investment treaties, while the jurisdiction of one is being asserted under the North American Free Trade Agreement (NAFTA).
The Centre’s Additional Facility
In 1978 the Centre adopted what are known as its Additional Facility Rules which authorise the Centre’s Secretariat to administer specific types of proceedings between states and nationals of other states that fall outside the scope of the Convention. This includes (a) fact-finding proceedings, (b) conciliation or arbitration proceedings for the settlement of investment disputes where one of the parties is not a contracting state or a national of another contracting state, and (c) conciliation or arbitration proceedings in respect of non-investment disputes provided that the underlying transaction is not an ordinary commercial transaction. The latest version of the Additional Facility Rules contains amendments approved by the Centre in September 2002 and which came into effect on 1 January 2003. These rules are published as a separate booklet and are available on the Centre’s website, www.worldbank.org/icsid.
Proceedings under the Additional Facility Rules are not governed by the Convention which means that arbitrations conducted under the Additional Facility Rules are not protected from national law and that the recognition and enforcement of awards will be governed by the law of the venue or place of enforcement of the proceedings. However, certain provisions of the Centre’s rules and regulations apply mutatis mutandis in respect of Additional Facility proceedings. It should be noted that reference to the Centre for the settlement of disputes under the Additional Facility Rules requires the consent of the Centre’s Secretary-General, whose role is described below.
ORGANISATIONAL FRAMEWORK
Administrative elements
One should not embark upon ICSID arbitration proceedings without first familiarising oneself with the procedural rules as well as the Centre’s organisational framework and administration. This requires a study of the Convention and the rules and regulations adopted pursuant to its provisions. The Convention and these rules and regulations are sometimes referred to as the Centre’s Basic Documents. These Basic Documents are published by ICSID in a single volume, the most recent edition of which was published in January 2003. The Basic Documents are published in each of ICSID’s three official languages: English, French and Spanish.
Section 1 of the Convention (comprising arts 1–3) deals with the establishment and organisation of the Centre. Article 1 establishes the Centre while art 2 gives it a home at the World Bank and art 3 provides that the Centre shall have the Council and a Secretariat and shall maintain a Panel of Arbitrators. Section 2 of the Convention (comprising arts 4–8) provides that the Chair of the Council shall be the President of the World Bank and that the Council’s powers and functions shall include the adoption of administrative and financial regulations, rules of procedure for the institution of conciliation and arbitration proceedings (as well as for the conduct of such proceedings), as well as powers generally to operate the Centre. Such rules and regulations have indeed been adopted, namely the Administrative and Financial Regulations (the Regulations), the Rules of Procedure for the Institution of Conciliation and Arbitration Proceedings (the Institution Rules) and the Rules of Procedure for Arbitration Proceedings (the Arbitration Rules).
Section 3 of the Convention (comprising arts 9–11), provides that the Secretariat shall consist of a Secretary-General, one or more deputies and staff. Article 11 provides that the Secretary-General shall be the Centre’s legal representative and principal officer and shall bear responsibility for its administration, including performing the role of registrar.
Functional responsibilities
The Council, which acts as the Centre’s plenary organ, is comprised of one representative from each contracting state. The Chairman of the Council has power to nominate the Secretary-General and any Deputy Secretary-General for election by the Council, to designate up to ten people to the Panel of Arbitrators, to appoint arbitrators should the parties default in their obligation to do so, to appoint members of ad hoc committees, to appoint replacement arbitrators when necessary and to determine challenges to arbitrators. Powers expressly conferred on the Council under art 6 of the Convention include powers to adopt the administrative and organisational rules and procedures regulations (mentioned above) as well as to ‘exercise such other powers and perform such other functions as it shall determine to be necessary for the implementation of the provisions’ of the Convention.
The Secretary-General performs the role of registrar and has the power to authenticate and certify copies of ICSID awards. He or she is required to administer the Centre, keep its records and provide administrative support in proceedings and publish information. The Secretary-General also has powers and duties under the Additional Facility Rules as well as to select an appointing authority in ad hoc arbitrations. All Secretaries-General of ICSID simultaneously hold the office of General Counsel of the World Bank. In reality, therefore, the Deputy Secretary-General is the senior legal officer of the Centre and administers the Centre’s caseload and functions with the assistance of the Secretariat.
Arbitration panels
ICSID Panels of Conciliators and Arbitrators were established by s 4 of the Convention (comprising arts 12–16). Each contracting state is entitled to appoint four arbitrators to the Panel of Arbitrators. A further ten appointments are made by the Chair of the Council. All Panel arbitrators must possess the qualities described in art 14(1) of the Convention. In particular, they must be ‘persons of high moral character and recognised competence in the fields of law, commerce, industry or finance, who may be relied upon to exercise independent judgment’.
The creation of this Panel serves two purposes. First, it identifies the arbitrators eligible for appointment by the Chair of the Council when it falls upon the Chair to make such appointments. Secondly, it is a useful source of names of arbitrators from which the parties may seek inspiration when making their own appointments. (Such choices are not restricted to Panel members; however, the arbitrators chosen must nevertheless possess the qualities of Panel arbitrators mentioned above.)
EDUCATIONAL OUTREACH PROGRAMMES
The Centre is active in collaborating with other World Bank Group units in providing advice on investment and arbitration law following requests made by governments. Since the 1980s, the Centre has expanded its role to include the provision of information and advice on investment treaties and laws. In particular, ICSID carries out advisory and research activities and has a number of publications, some of which are free of charge and available both at the Centre and on its website (www.worldbank.org/icsid). The Centre’s other publications include News from ICSID and a journal entitled ICSID Review – Foreign Investment Law Journal, both of which are published twice-yearly. News from ICSID provides updates on the numbers and types of claims being handled by the Centre as well as status reports for pending cases and any relevant topical information or reports. The ICSID Review – Foreign Investment Law Journal contains scholarly contributions on a variety of investment protection-related issues, generally from recognised experts in the field.
In November 2005 the Centre’s most recent release to the nine-volume compilation of bilateral investment treaties (‘Investment Treaties’) was published, pushing the number of treaties contained in the collection to 1,040. In September 2005 the Centre published its most recent release to its collection of ‘Investment Laws of the World’, which included investment legislation from Cambodia, Croatia, Djibouti, Kyrgyz Republic, Mali, Senegal and Syria. The ten-volume collection of ‘Investment Laws of the World’ features foreign investment legislation of some 130 countries.
The Secretary-General and the Centre’s legal and administrative staff also provide invaluable advice and assistance to parties contemplating or conducting ICSID arbitrations in relation to matters of procedure.
FEES AND COSTS
Administrative and tribunal costs
Although the World Bank funds the general activities of the Centre, the parties to ICSID arbitrations are required to fund the costs of their own proceedings, such costs being determined by the Secretary-General in accordance with the Regulations. As with most arbitration institutions, there exists a single, non-refundable fixed fee for lodging either a request for arbitration or a request for annulment. Under reg 16, that fee is to be determined by the Secretary-General from time to time. As of 6 July 2005, the fee was US$25,000. Upon constitution of a tribunal, an administrative charge of US$3,000 is also payable to the Centre. As is commonplace with many other arbitration institutions, the parties are also expected to make advance payments to the Centre. The first of these is also required upon constitution of the tribunal and in an amount estimated by the Secretary-General to be likely to be incurred during the following three to six months of the proceedings, with supplemental requests thereafter as appropriate. The parties are obliged to meet these payments in equal shares. If any such fees are not so paid within 45 days, the Secretary-General may move that the tribunal stay the proceedings. If any party fails to pay, the other party can make up the difference. If any stay is granted and it exceeds six months, the Secretary-General may then move that the tribunal discontinue the proceedings. (These rules apply mutatis mutandis to any applications for any annulment of any award, save that for such applications the applicant is solely responsible for making the advance payments.) In all cases, the tribunal or ad hoc committee shall decide the final apportionment of costs between the parties, subject to where the parties otherwise agree. This includes the parties’ own legal costs. Tribunals are not obliged to give reasons for the ultimate apportionment, and experience to date suggests the absence of any uniform practice. Factors which it is reasonable to expect tribunals to consider would include the overall outcome, the number and outcome of individual and ancillary issues and the conduct of the parties both in relation to the facts giving rise to the dispute and in relation to the proceedings.
As to the fees payable to the members of ICSID tribunals, these are determined by the members of the tribunal within the limits set by the Council. These limits are presently to be found in reg 14, which provides that members of arbitral tribunals and ad hoc committees shall receive reimbursement of direct expenses reasonably incurred, a daily fee (for each day of meetings or other work performed in relation to the proceedings), and in certain circumstances a per diem subsistence fee and travel expenses. The amounts of these fees are fixed by the Centre and explained and recorded in two documents produced by the Centre: the Memorandum on the Fees and Expenses of ICSID Arbitrators and the Centre’s Schedule of Fees, although the parties may agree in advance with the tribunal some other basis of remuneration, and frequently do so. In any case, all payments to arbitrators must be made exclusively by ICSID.
In reality, the ICSID fee scale is set at a rate much lower than that which many of its arbitrators could command in the open market. On many occasions, consistent with the nature of the role of an ICSID arbitrator, the arbitrators will not ask the parties to consent to an increase in the fee scale. On some occasions, however, the arbitrators have asked the parties to consent to an increase in fees to reflect a more usual commercial rate.
ADMISSIBILITY OF CLAIMS
Unlike most other arbitration institutions, mere agreement between the disputing parties to refer their disputes to ICSID will not of itself achieve that purpose. With the limited exceptions explained above, only disputes between contracting states and nationals of other contracting states may be administered by the Centre. Under the Convention, as noted above, in order for a Request for Arbitration to be registered there must be jurisdiction ratione materiae (ie admissible subject matter) and jurisdiction ratione personae (ie the parties must be entitled to have recourse to ICSID and have standing to answer claims under ICSID). Both of these requirements are contained in art 25 of the Convention which lays down the general parameters for ICSID’s activity.
As to ratione materiae, art 25(1) of the Convention provides that ICSID’s jurisdiction extends to ‘any legal dispute arising directly out of an investment’. Accordingly, in order for there to be the requisite ratione materiae the dispute must relate to the existence or scope of a legal right or obligation, or the nature or extent of reparation to be made for breach of a legal obligation. There must also be an ‘investment’, which term is not defined in the Convention. Whether this requirement is met is a matter for ICSID tribunals to determine on a case-by-case basis. The legal dispute must also arise ‘directly’ out of an investment. Once more, this is a matter to be determined by ICSID tribunals on a case-by-case basis. As many investments involve multiple transactions and parties, this distinction between disputes which arise ‘directly’ out of investments and those which are merely ancillary may in some cases be a difficult one to make.
As to ratione personae, art 25(1) of the Convention requires that the parties to ICSID proceedings be ‘a Contracting State and a national of another Contracting State’ and also that each must have consented in writing to submit their dispute to the Centre. Contracting states are those which have ratified the Convention and their identification therefore tends not to be the subject of much debate. State parties may appear in person or through ‘any constituent subdivision or agency’ so designated by that state to ICSID for the purpose of the Convention.
Nationals of contracting states may be natural or juridical persons. For natural persons, they must possess the nationality of another contracting state both on the date on which the parties consent to submit their dispute to the Centre and on the date that the Request for Arbitration is registered. Juridical persons are also required to have possessed the requisite nationality on the date on which the parties consent to submit their dispute to the Centre, but not on the date of registration. The Convention recognises that many investments are made through companies incorporated in the territory of host states with the result that the nationality rule if strictly applied would often preclude ICSID jurisdiction. Hence the Convention includes a provision for the parties to agree that, because of foreign control, the investment vehicle situated within the territory of the host state may be treated as a national of another contracting state for the purposes of the Convention.
For contracting states, the requirement of written consent to ICSID jurisdiction requires more than mere ratification of the Convention. A separate, additional, voluntary submission to the Centre is required. This consent will usually exist in the form of express contractual terms in an agreement to which the contracting state is a party, the contracting state’s national legislation or investment treaties to which the contracting state is a party.
For nationals of contracting states, their written consent to ICSID arbitration will usually be found in express contractual terms agreed with contracting states, or it will be comprised of their written Request for Arbitration (this will usually be the case when the state party’s consent is contained in national legislation or in an investment treaty).
AGREEMENTS TO ARBITRATE
Indispensable elements and model clauses
As with traditional forms of international arbitration, recourse to ICSID arbitration is entirely voluntary. It is therefore critical to establish consent in order for the Centre to have jurisdiction. Jurisdictional arguments over consent often dominate the early stages of an ICSID arbitration. This is one of the reasons why ICSID arbitrations can take longer than other forms of contemporary arbitrations. Further, that consent must exist in writing. There is no required form of words, although the Centre has published guideline model clauses. Those model clauses, of which there are 22 in total, cover all types of relationships and circumstances that might lead parties to arbitration at the Centre, and how to make the most of the Centre’s facilities should they do so, including the submission of existing and future disputes, stipulations that transactions constitute investments, stipulations as to nationality and foreign control, methods of constituting a tribunal, stipulations as to remedies, provisional measures and a model waiver of immunity from execution of an ICSID award. The model clauses also include provisions for referring disputes to arbitration under the Additional Facility Rules and for the appointment of the Secretary-General as an appointing authority in ad hoc arbitrations.
In many disputes submitted to the Centre, consent is not to be found in a bilateral agreement between the disputing parties, such as would be the case when the agreement to arbitrate has been recorded as a contractual term. This is because most disputes referred to the Centre arise out of alleged violations of either investment treaties or national laws of which nationals of contracting states are beneficiaries, but not parties. In these situations the consent of the state party to ICSID arbitration is the unilateral offer to refer disputes to ICSID arbitration contained in the treaty or legislation. The consent of the national is usually comprised of, or contained in, its Request for Arbitration.
Recommended additional elements
To the extent that there is an opportunity to negotiate a written consent to refer disputes to the Centre, it would be wise to consult the Centre’s model clauses. An investor in this situation has the opportunity to record in express terms clear waivers or agreements regarding the various matters which states often raise at the early stages of an ICSID arbitration in order to avoid the Centre’s jurisdiction. These would include dealing expressly with any of the matters prompted by the model clauses which may be pertinent to the relationship or dispute in question.
THE ADMINISTRATION OF AD HOC ARBITRATIONS
The Secretary-General of ICSID has the power, but no duty, to act as the appointing authority of arbitrators in ad hoc arbitration proceedings. It is recommended that parties seeking to nominate the Secretary-General as the appointing authority in their ad hoc proceedings should first obtain the agreement of the Secretary-General to perform this role.
In the Centre’s year 2004/05, it provided administrative services in ten arbitration proceedings conducted under the Arbitration Rules of the United Nations Commission on International Trade Law (UNCITRAL).
INITIATING PROCEEDINGS
Required documents and preconditions
The Institution Rules require the party wishing to commence ICSID arbitration proceedings to address a request to that effect in writing, in an official language of the Centre, to the Secretary-General. The request must be signed and dated. The request must designate precisely each party to the dispute and state the address of each. If one of the parties is a constituent subdivision or agency of a contracting state so designated pursuant to art 25(1), this must be stated in the request. The request must indicate the date of consent to ICSID arbitration and the instruments in which such consent is recorded. The request must indicate for the non-state party its nationality at the date of consent. If the non-state party is a natural person, the request must also state his or her nationality on the date of the request and that he or she did not have the nationality of the state party on either of these dates. If the non-state party is a juridical person the request should state that it has taken all necessary internal actions to authorise the request. The request should also state the issues in dispute indicating that the dispute arises directly out of an investment.
Although not required to be included in the request, if the parties have agreed any relevant provisions concerning the proceedings, eg relating to the number and appointment of arbitrators, it is sensible to include such information in the request. It is also sensible to include the lodging fee because until such fee is paid the Secretary-General will acknowledge receipt of the request but not take any steps towards its registration.
The requesting party should submit five additional signed copies to the Secretary-General, who may request further copies as required. Upon receipt of the request the Secretary-General sends an acknowledgement to the requesting party, and upon receipt of the lodging fee the Secretary-General transmits a copy of the request and accompanying documentation to the other party.
Unlike most other arbitration institutions, the mere production of a request for arbitration is not sufficient for the requesting party to have commenced the arbitration proceedings. Under art 36 of the Convention, the proceedings are deemed to have commenced only upon registration of the request. Registration will only take place if the Secretary-General is satisfied that there is no ‘manifest’ absence of jurisdiction. In other words, the Secretary-General performs a ‘screening’ role with respect to requests submitted for registration. In considering whether or not to register the request, the Secretary-General will conduct a preliminary examination of the request in light of the requirements of the Convention which are set out above. Any request that prima facie meets these requirements should be registered as the Secretary-General is only permitted to refuse requests that are ‘manifestly outside the jurisdiction of the Centre’. The registration of a request does not prejudice a party’s right to raise issues of jurisdiction before the tribunal. Indeed, the notice of registration produced by the Secretary-General is required to ‘remind the parties that the registration of the request is without prejudice to the powers and functions of the … arbitral tribunal in regard to jurisdiction, competence and the merits’.
There are no provisions within the Convention or the Institution Rules which govern when a request should be submitted to the Secretary-General. It would, however, be prudent for any requesting party, having determined to commence ICSID proceedings, to consider relevant cause of action limitation periods as well as any time constraints contained in the relevant consent to ICSID arbitration. Where such consent arises out of an investment treaty or national law one should be mindful of provisions requiring periods of time to lapse before proceedings can be commenced (often called ‘cooling-off ’ periods), as well as ‘fork in the road’ provisions which may require the requesting party to make an election between requesting ICSID arbitration and other forms of redress.
Service requirements
The only service requirement for commencing ICSID arbitration proceedings is that a request complying with the requirements of the Convention and the Institution Rules be produced, with five additional signed copies, to the Secretary-General. When the lodging fee is paid the Secretary-General will send copies to the other party.
All formal communications and submissions from the parties to the tribunal or each other should be addressed to the tribunal at the Centre. The Secretary-General then transmits these communications and submissions to the intended recipients.
THE SELECTION, APPOINTMENT AND CHALLENGE OF ARBITRATORS
Constituting ICSID tribunals
ICSID tribunals must be comprised of a sole arbitrator or any uneven number of arbitrators. All arbitrators, whether chosen by the parties or by the Centre by reason of a party’s default, must possess the qualities described in art 14(1) of the Convention. The usual number of arbitrators is three.
The requirements of independence
As with most arbitration institutions, ICSID arbitrators are required to be independent of the parties. However, unlike the rules of most other institutions, this requirement does not manifest itself as an express requirement. Rather, ICSID arbitrators are required to sign the declaration providing details of all past and present professional, business or other relationship with the parties.
The role of the parties in the selection of arbitrators
In the absence of any agreement between the parties as to the process of constituting an ICSID tribunal, the process of appointment is that set out in Arbitration Rule 2. The first step in this default procedure requires the requesting party, within ten days of registration, to propose the number and method of appointment of the arbitrators. Within 20 days of receipt of those proposals, the other party shall either accept those proposals or make counterproposals. Thereafter, the requesting party has 20 days likewise either to accept the counter-proposals or to make yet further proposals of its own. If no proposals are agreed between the parties within 60 days, either party may request the Secretary-General to constitute the tribunal in accordance with art 37(2)(b) of the Convention.
Article 37(2)(b) thus contains what might be described as the back-up to the Arbitration Rule 2 default procedure for constituting an ICSID tribunal. Article 37(2)(b) provides that the tribunal shall be comprised of three arbitrators, one appointed by each party and the third (who shall be President of the tribunal) by agreement of the parties. In the event that a tribunal is to be constituted under art 37(2)(b) of the Convention the parties are required to comply with the detailed procedure for exchange of proposals set out in Arbitration Rule 3.
Arbitration Rule 3 sets out a process for the exchange between the parties of proposed candidates, requiring the nomination by each party not only of their own party-appointed arbitrators but also of potential Presidents of the tribunal. The parties are required to engage in the Arbitration Rule 3 procedure promptly. However, there is no guarantee that the Arbitration Rule 3 procedure will produce the parties’ agreement. For this reason there is a final back-up default process set out in Arbitration Rule 4. Arbitration Rule 4 provides that if the tribunal is not constituted within 90 days after registration of the request for arbitration, or such other period as the parties may agree, the Centre will appoint the remaining arbitrators and designate which of them shall be the President of the Tribunal.
The role of the Centre in the selection of arbitrators
There is substantial scope for delay in constituting an ICSID tribunal. This is the result of the Centre giving to the parties ample opportunity to agree the constitution of the tribunal. However, such accommodation must have limits, and hence the various layers of default procedure explained above. In order to avoid excessive delay, as noted, if after 90 days from registration the tribunal has not been constituted, the Centre will step in and complete the process. Article 38 and Arbitration Rule 4 provide that if the tribunal is not constituted within 90 days from the date of registration of the request, either party may request the Chair of the Council to appoint the remaining arbitrators, although the parties may agree to extend this period. Upon receiving such a request, the Chair of the Council is obliged, in consultation with the parties, to constitute the tribunal within 30 days, which period may also be extended by agreement with the parties. The Chair of the Council must appoint arbitrators from any of those named in the Panel of Arbitrators save that no such arbitrator may be of the same nationality as any of the parties.
Finally, it should be noted that, unless the parties agree otherwise, the majority of the arbitrators shall be nationals of states other than the nationalities of the parties to the proceedings. This effectively means that for three-member tribunals the parties cannot appoint their own nationals as arbitrators. This is because if each party nominated one of its nationals, the only non-national of one of the parties would be the President of the Tribunal, with the result that there would be no majority of arbitrators being nationals of states other than the nationals of the parties.
The replacement of arbitrators
Generally speaking, vacancies in ICSID tribunals are to be filled by the same method by which the original appointments were made. If such vacancies are not so filled within 45 days, the Chair of the Council shall make the necessary appointment(s). Pending the filling of any vacancy, the arbitration proceedings are held in suspense.
An ICSID arbitrator who resigns must submit his or her resignation to the other members of the tribunal. If the resigning arbitrator had been appointed by one of the parties, the remaining arbitrators must consider the reasons for the resignation and decide whether to consent to the resignation. If they do not consent, the vacancy is to be filled by a person appointed by the Chair of the Council (chosen from the Panel of Arbitrators). This operates as a deterrent to parties which might otherwise appoint arbitrators minded to resign.
The proceedings resume upon reconstitution of the tribunal, save that any new arbitrator may request the recommencement of any incomplete hearing.
The disqualification of arbitrators
There are two grounds for disqualification identified in the Convention. The first of these is disqualification for ‘any fact indicating a manifest lack of the qualities required by paragraph (1) of Article 14’. The requirement of a ‘manifest’ lack of qualities clearly imposes a heavy burden of proof on the party proposing disqualification. The second ground for disqualification is where the arbitrator was ineligible for appointment under the appointment provisions of the Convention. (Disqualification on this basis is improbable as any deviation from these requirements is most likely to be addressed in the appointment process.)
The timing and handling of challenges to arbitrators
Parties who propose disqualification of arbitrators must do so promptly and, in any event, before the close of the proceedings. Parties which fail to act promptly in seeking to disqualify arbitrators may also fall foul of Arbitration Rule 27, which deems a party that has failed promptly to object to noncompliance with the Convention, the Regulations and the Arbitration Rules to have waived its right to so object.
Proposals for disqualification are to be made to the Secretary-General but the decisions are to be taken by the unchallenged members of the tribunal. In the event that the unchallenged arbitrators are divided, or the challenge concerns a sole arbitrator or majority of the arbitrators, the Chair of the Council shall decide the challenge. Proceedings are held in suspense pending a decision on any challenge and thereafter in respect of successful challenges until the disqualified arbitrator is replaced. If the proposal for disqualification succeeds the arbitrator to whom the decision relates shall be replaced by the same method by which the original appointment was made.
THE RESOLUTION OF JURISDICTIONAL ISSUES
The role of the Centre
As stated, the Secretary-General performs a screening role with respect to requests for arbitration. However, he or she is required to register them unless they are ‘manifestly’ outside the Centre’s jurisdiction. The Centre has no role in the determination of jurisdictional issues. Such issues are left to the tribunal.
The role of the arbitrators
ICSID tribunals are the judge of their own competence and shall determine all jurisdictional issues either as preliminary questions or together with the merits of the dispute. Objections to jurisdiction should be made to the Secretary-General as early as possible but in any event ‘no later than the expiration of the time limit fixed for the filing of the counter-memorial, or, if the objection related to an ancillary claim, for the filing of the rejoinder – unless the facts upon which the objection is based are unknown to the party at that time’. ICSID tribunals may also consider jurisdictional issues on their own initiative at any stage of the proceedings. When any jurisdictional objection is raised, the proceedings on the merits are held in suspense pending resolution of the challenge although a decision to join the objection to the merits will obviously resume those proceedings.
PROCEDURAL MATTERS
General principles
A useful starting-point when considering the ICSID procedures which are either required or typical is the powers and duties of ICSID tribunals, as for the most part it is the tribunals which decide what the procedures will be in any given case (although, as a general rule, the parties are entitled to agree their own procedures). Section 3 of the Convention, comprised of arts 41–47, is entitled ‘Powers and Functions of the Tribunal’. These powers must be read in conjunction with the Arbitration Rules which contain specific rules covering all aspects of the proceedings including rules regarding the working of the tribunal, rules described as ‘general procedural provisions’, rules dealing with written and oral procedures, rules described as ‘particular procedures’, the award, the interpretation, revision and annulment of awards and a rule described as ‘general provisions’.
Article 44 of the Convention provides that if and when issues of procedure arise which are not covered by s 3 of the Convention, or by the Arbitration Rules or the parties’ agreement, the tribunal is expressly empowered to decide the issue.
The venue of ICSID proceedings
Hearings and meetings of the tribunal shall take place at the Centre’s offices in Washington, DC, or at any other place agreed by the parties provided that such place is approved by the tribunal. An agreement to hold hearings and meetings elsewhere does not have the effect of moving the formal seat of the arbitration, which remains as Washington, DC. In practice, a substantial number of ICSID hearings and meetings take place in Europe.
The language of ICSID proceedings
The parties may agree to use one or two languages provided that any language that is not an official language of the centre (ie English, French or Spanish) must be approved by the tribunal after consultation with the Secretary-General. If two languages are chosen, either may be used in the written or oral procedures subject to any translation and interpretation that may be required by the tribunal.
Jurisdiction, governing law and the power to decide ex aequo et bono
Article 41 of the Convention provides that the tribunal shall be the judge of its own competence and shall determine objections to jurisdiction as preliminary questions, or join them to the merits of the dispute. Article 42 provides that the tribunal shall decide disputes in accordance with rules of law agreed by the parties and, in the absence of such agreement, by the law of the contracting state party to the dispute (including its conflict rules) and ‘such rules of international law as may be applicable’. The parties may, if they wish, agree that the tribunal may decide disputes ex aequo et bono.
Interim and provisional measures in ICSID proceedings
Parties to ICSID proceedings are entitled at any time to request the tribunal to recommend provisional measures for the preservation of its rights, and such requests are to be given priority by the tribunal. Naturally, a tribunal may recommend such measures on its own initiative or recommend measures other than those sought, or at any time modify or revoke its recommendations. No recommendations, modifications or revocations of recommendations shall be made without the parties first being given the opportunity to present their observations.
The first session
An ICSID tribunal must hold its first session within 60 days of its constitution. The tribunal determines the dates of subsequent sessions after consultation with the Secretary-General and the parties, as far as possible.
Chapter III of the Arbitration Rules (rr 19–28) sets out what are described as ‘General Procedural Provisions’. These provide that the tribunal shall make the orders required for the conduct of the proceeding, and that as early as possible the President shall endeavour to ascertain the views of the parties regarding issues of procedure. Particular issues upon which views must be sought include the quorum of the tribunal for valid sittings, the language or languages of the proceedings, the number, sequence and timing of pleadings, whether to dispense with any written and oral procedure, the apportionment of costs and record keeping. In respect of all procedural issues, the agreement of the parties is paramount unless contradicted by the Convention or the Regulations.
It is the practice of ICSID tribunals to circulate a draft agenda in advance of the first session, upon which the parties are requested to provide their comments. The standard agenda contains almost twenty specific items ranging from the constitution of the tribunal to dates of subsequent sessions. This standard draft agenda has been carefully crafted to provoke discussion with respect to the numerous procedural variables that exist in ICSID proceedings and to establish agreement on the way forward, or at least to flush out the varying expectations of the parties so that appropriate procedures can be put in place. The current draft agenda used by ICSID is attached as an appendix to this chapter.
Pleadings
Chapter IV of the Arbitration Rules (rr 29–38) sets out what are described as the ‘Written and Oral Procedures’. These provide that, unless the parties agree otherwise, the proceedings shall comprise a written procedure followed by an oral one (ie a hearing). The written procedure shall consist of a memorial from the claimant, a counter-memorial from the respondent and, thereafter, if the parties so agree or the tribunal directs, the production by the claimant of a reply and by the respondent of a rejoinder. In all of the ICSID proceedings in which the authors of this chapter have been involved, the parties have in fact produced second-round submissions in the form of replies and rejoinders.
In the case of a joint request for arbitration, the proper procedure is to be determined by the tribunal.
The parties’ memorials are required by the Arbitration Rules to contain statements of relevant facts and law, and submissions. Counter-memorials, replies or rejoinders are required to contain relevant admissions or denials, any necessary additional facts and observations on relevant statements of law, and submissions. In this respect, ICSID proceedings are substantially similar to conventional international arbitration proceedings.
Managing events of default and waiver of rights
The events of default which most often occur in international arbitration tend to include the failure of a party to appoint its arbitrator and its failure to participate in the proceedings or to present its case at the hearing. These failures rarely, if ever, occur in ICSID arbitration proceedings. The principal reason for this is that claimants are motivated to participate fully in order to secure the relief they seek in the proceeding, and for respondents – almost invariably sovereign states – the stakes are too high to risk non-participation. Individuals and corporations may take risks by not participating in arbitration proceedings and they have only themselves and their shareholders to whom they must answer. States, on the other hand, have their citizens to answer to and also a place and reputation on the world stage that they are usually unwilling to jeopardise for the sake of a single investment dispute. States are bound by international law to comply with their treaty obligations which include participation in ICSID proceedings properly commenced. Failing to honour this obligation in full view of the Centre – an organ of the World Bank – is hardly ever in a state’s interests.
Nevertheless, the Centre has various rules and regulations designed to deal with events of default. With regard to default in the appointment of arbitrators, see ‘The role of the Centre in the selection of arbitrators’, above. With regard to failure to participate in the proceedings, the Convention provides expressly that the failure of a party to appear or to present its case is not deemed an admission of the other party’s assertions. The Convention also provides that the other party is then entitled to request that the tribunal deal with the issues and render an award.
As with most arbitration rules and many contemporary arbitration laws, parties which fail promptly to state objections to conduct of the proceedings, including jurisdictional objections, shall be deemed to have waived their right to do so.
Documents, discovery, evidence (oral and written: fact and experts)
Although normally self-evident from their submissions, the parties are nevertheless required, within time limits to be fixed by the tribunal, to specify ‘precise information regarding the evidence which it intends to produce and that which it intends to request the tribunal to call for, together with an indication of the points to which such evidence will be directed’. The evidence produced by a party should be that which supports and establishes the facts and submissions advanced in its memorials. The tribunal may call upon the parties to produce documents, witnesses and experts and the tribunal is to judge the admissibility and probative value of all evidence adduced.
Unless the parties agree otherwise, the tribunal has the power to visit any place connected with the dispute or conduct inquires at any such place. In the event that such a visit takes place, the parties are entitled to participate and the tribunal shall issue an order with respect to the visit, which shall specify the scope of the intended visit or inquiry and the procedure to be followed and other relevant particulars. The power to conduct such a visit is rarely used.
All witnesses and experts are expected to make declarations to the tribunal prior to giving their evidence at any hearing. Witnesses are required to declare that they shall speak ‘the truth, the whole truth and nothing but the truth’. Experts are required to declare upon their ‘honour and conscience’ that their statement ‘will be in accordance with their sincere belief ’.
The fixing of time limits
Time limits in respect of compliance with procedural steps shall be fixed by the tribunal which may delegate such power to the President. Time limits may be extended and steps taken outside of such time limits shall be disregarded unless the tribunal ‘in special circumstances and after giving the other party an opportunity of stating its views, decides otherwise’.
Incidental and additional claims
Unless the parties otherwise agree, at the request of a party the tribunal shall determine incidental or additional claims or counterclaims provided that they arise directly out of the subject matter of the dispute, are within the scope of the consent to arbitration and are otherwise within the jurisdiction of the Centre.
HEARINGS
The need for oral hearings
The orthodox approach in contemporary arbitration is that there shall be a hearing should either party request one or should the tribunal of its own volition call for one. Neither of these events need occur for there to be a hearing in ICSID arbitration because the Arbitration Rules state that, unless the parties otherwise agree, there will be a hearing. The Arbitration Rules provide that the proceedings shall comprise two distinct phases, namely, a written procedure followed by an oral one. The oral procedure is substantially similar to conventional international arbitration proceedings. It consists of a hearing conducted by the tribunal together with the parties and their representatives and any witnesses and experts. The tribunal decides, with the consent of the parties, who shall be present during the testimony of witnesses and experts and during any hearing the tribunal can be expected to put questions to the witnesses, experts and the parties’ representatives.
Rights of audience
There are no rules fixing qualifications or other requirements of the parties in the presentation of their case, either in the written or oral procedure. The only requirement with regard to representation is that the names and authority of the parties’ representatives must be notified to the Secretary-General who shall promptly inform the tribunal and the other party. Hence the parties can represent themselves or be represented by their employees or such third parties as they may retain for that purpose. In other words, there are no limited rights of audience before ICSID tribunals.
Hearing procedures
There are no express rules regarding the hearing procedure. However, in the normal way the parties can expect that they may be given the opportunity to present opening submissions, followed by the presentation by the claimant of its witnesses and experts and then the presentation by the respondent of its witnesses and experts. There may also be a round of closing submissions. Whether there will be opening submissions, whether all witnesses and experts may attend all of the hearing, whether experts will be called after all of the factual witnesses and whether there will be closing submissions is a matter for the tribunal to decide on a case-by-case basis, although it can generally be expected to follow any procedure agreed between the parties. The Arbitration Rules do, however, provide that any member of the tribunal may put questions to witnesses and experts, subject to the President having control over the process.
The closure of ICSID proceedings
Formal closure of ICSID proceedings occurs after the parties have concluded the presentation of their respective cases. However, ICSID tribunals do have the power, prior to rendering an award, to reopen the proceedings if ‘new evidence is forthcoming of such a nature as to constitute a decisive factor’ or ‘there is a vital need for clarification on certain specific points’.
The timing and duration of hearings
As with conventional institutional or ad hoc international arbitration, there is no set time for the length of any ICSID hearing. In all cases it will be a matter of the time reasonably required to deal with the parties’ submissions, witnesses and experts. The tribunal takes the ultimate decision with respect to such matters in line with its general power to establish time limits for the various steps of the proceedings.
AWARDS
Prior approval or scrutiny
There is no formal process of prior approval or scrutiny of ICSID awards. However, as indicated below, there are a number of formal requirements for ICSID awards and any award submitted by an ICSID tribunal which does not meet those requirements may expect it to be returned by the Secretary-General for correction.
Essential requirements
One can expect ICSID awards to be broadly similar in form and content to the awards issued under the auspices of most contemporary arbitral institutions or by experienced arbitrators. However, many elements of such awards are not formally required by the institution or arbitrators rendering the award, whereas they are specifically required by the Centre. Other than to provide that the tribunal is empowered to decide by majority and that the award must be in writing and signed by the members of the tribunal who voted for it (indicating the date of each signature), the Convention and the Arbitration Rules also require that the award must be drawn up and signed within 120 days after closure of the proceedings. The award must contain a precise designation of each party, the name of each member of the tribunal (and the identification of the appointing authority of each), the names of the agents, counsel and advocates of the parties, the dates and place of sittings of the tribunal, a summary of the proceedings, a statement of the facts as found by the tribunal, the submissions of the parties and any decision regarding costs. Naturally, the award must also deal with every question submitted to the tribunal and must state the reasons for the tribunal’s decisions. Any member of the tribunal who dissents may attach an individual opinion or statement of dissent to the award.
ICSID awards may not be published without the consent of the parties. Nevertheless, such consent is obtained in a good number of cases in which case the award is published on the Centre’s website. Such awards will usually also be published by the Centre in the ICSID Review – Foreign Investment Law Journal. It should be remembered that the existence of each ICSID case, together with very brief details of the dispute and its status, appears on the ICSID website.
There is no restriction on a party itself publishing the award should it choose to do so, with or without the consent of the other party, or ICSID.
Supplementary decisions and the correction of errors
After an ICSID award has been issued, any party who considers that the award does not deal with any issue in the proceedings or contains errors, may within 45 days after the award was rendered request the tribunal to decide any question which it had omitted to decide in the award, or to rectify any clerical, arithmetical or similar error in the award. The tribunal determines the procedures for dealing with such requests. Any revised awards must comply with the same rules that apply to awards and such revisions are deemed part of the award.
The interpretation of awards
In the event of a dispute between the parties concerning the interpretation of an ICSID award, either party may by written request to the Secretary-General seek to have the award interpreted. The request must contain a detailed explanation of the precise points in dispute. If possible the same tribunal shall deal with the request for interpretation but if this is not possible, a new tribunal shall be constituted.
The revision of awards
In the event of post-award discovery of facts ‘of such a nature as decisively to affect the award’ a party may within 90 days after the discovery of such facts, by request in writing to the Secretary-General, seek revision of the award provided that the applicant’s pre-award ignorance of the facts was not due to its own negligence. If possible the same tribunal should deal with the request for revision but if this is not possible, a new tribunal shall be constituted.
The annulment of awards
Annulment can only be sought against a final award. If a party is unhappy with an interim or partial award, it must wait until that decision is incorporated into a final award. Either party may by written request to the Secretary-General within 120 days of the rendering of the award seek annulment of the award on the grounds that the tribunal was not properly constituted, that the tribunal has manifestly exceeded its powers, that there was corruption on the part of any member of the tribunal, that there has been a serious departure from a fundamental rule of procedure, or that the award has failed to state the reasons upon which it is based. Upon receipt of such a request and the payment of the necessary filing fee the Chair of the Council appoints an ad hoc committee (the Committee) of three persons from the Panel of Arbitrators. Such Committee comprises persons who are not members of the original tribunal that rendered the original award, are not of the same nationality as any member of the original tribunal or of any of the parties and were not designated to the Panel of Arbitrators by the state party or the state of the national of the other party.
The Committee has the same powers and functions as an ICSID tribunal. It may stay enforcement of the award pending its decision (and it shall do so if requested by the applicant).
If the Committee annuls the award either party may request that the dispute be submitted to a new tribunal.
The recognition and enforcement of awards
ICSID awards are enforceable with greater ease in contracting states than awards sought to be enforced under the New York Convention. ICSID awards are ‘binding on the parties and shall not be subject to appeal or to any other remedy except those provided for’ in the Convention. Moreover, the Convention obliges the parties to ICSID arbitration proceedings to ‘abide by and comply with the terms of the award’. For the state party to the dispute this amounts to a treaty obligation to abide by and comply with ICSID awards, with the result that enforcement proceedings against state parties should not in theory be necessary.
The Convention provides that contracting states (including, obviously, the state party to the dispute) shall recognise ICSID awards as binding and enforce the pecuniary obligations imposed by those awards within their territories as if they were final judgments of courts in those states.
All that is required of parties seeking to enforce ICSID awards in contracting states is that they furnish to the competent courts or other authority which such state shall have designated for enforcement purposes, a copy of the award certified by the Secretary-General. Most, but not all, contracting states have made such designations. Execution of the award shall then be governed by the laws concerning the execution of judgments in force in the state in whose territories such execution is sought. Note that nothing in the Convention derogates from the laws in any contracting state in relation to state immunity or immunity from execution. For this reason, those drafting ICSID agreements on behalf of investors would be wise to include express waivers of such immunity and for this purpose may wish to consult the Centre’s model clauses.
INSTITUTIONAL PROS AND CONS
For disputes which can be submitted to the Centre, its clear advantage over other forms of arbitration is that it is a supranational system created for the sole purpose of handling investment disputes. The various provisions of the ‘Basic Documents’ prescribe the nature and types of dispute that may be submitted and cover in detail the powers and duties of ICSID tribunals. Although this is principally in the interests of states that generally require greater certainty from proceedings in which they participate, it is also helpful to non-state parties in terms of bringing greater predictability to the proceedings.
From the perspective of aggrieved investors there are other advantages to choosing ICSID arbitration over other institutional options, or ad hoc arbitration. Many investors consider it an advantage to have their claims submitted to the Centre because it produces arbitration (and a resulting award) conducted under the aegis of the World Bank. As discussed, the existence of each arbitration receives a degree of publicity because it is published by the ICSID. These two factors may be said to motivate states not only to participate fully in the proceedings but also to satisfy ICSID awards promptly. This is because states can be presumed to wish to be seen to comply with their obligations under international law, which include complying with the Centre’s procedural requirements as well as abiding by and complying with the terms of ICSID awards. Failure to so comply will be in full view of the World Bank as well as existing and potential investors. This could have serious consequences in the context of the state seeking international funding or investment in the future.
From the perspective of state parties, a considerable advantage of ICSID arbitration is that it delocalises and denationalises the arbitration proceedings. The ICSID arbitration procedure is not governed by any national law and ICSID awards should not be subject to review by any national courts. The proceedings are administered by an international organisation with full international personality and in accordance with an international instrument – the Convention – which governs the proceedings, the right to review awards and the method of enforcement of awards (although it should be noted that Additional Facility awards are subject to review by national courts).
While the enforcement regime for ICSID awards is usually regarded by contracting states as one of the Centre’s advantages, a perceived drawback is the ability of a disgruntled party to seek the annulment of the award. A significant number of ICSID awards have been the subject of annulment proceedings and the substantial majority of these have resulted in the award being partly or fully annulled. In the event of a partial or complete annulment, the dispute or relevant issues may be resubmitted to a new tribunal. In turn, any new award may also be the subject of annulment proceedings. This can entail an expensive and time-consuming process which may undermine the relative speed, certainty and finality that disputing parties tend to expect from contemporary international arbitration. As discussed below, the current proposals for a broader right to appeal or challenge ICSID awards would if implemented lead to an increase in the number of awards being challenged.
One distinct point in favour of ICSID arbitration proceedings is the helpfulness and competence of the Secretary-General and ICSID’s Secretariat who handle the day-to-day administration of ICSID cases. As well as assisting tribunals with management of cases, the Secretariat is often prepared to give brief advice and assistance to parties as to the procedural steps which they need to take.
ICSID arbitration brings into play a collection of practice areas, making it a relatively specialised subject. In particular, its proceedings are governed by a complex interplay of the Convention, the Institution Rules, the Regulations and the Arbitration Rules, and these rules and regulations are governed by international law. Further complicating matters is that in a vast majority of cases the claims submitted to the Centre will arise out of treaties, the interpretation and application of which are themselves specialist subjects. Similarly, the applicable law governing the substantive issues in dispute may be a mixture of municipal and international law. Moreover, ICSID proceedings necessarily involve arbitration with a state party. This itself requires experienced counsel in order to understand and manage the formalities that are involved when dealing with states. It must also be recognised that much of the law in this area is developing and that ICSID awards do not create binding precedent. ICSID awards do, however, tend to carry weight with subsequent ICSID tribunals.
Although some ICSID awards are published by the Centre, there is no complete database or central repository of them. Probably the most comprehensive and free source of investment treaty awards can be found at http://ita.law.uvic.ca/chronological_list.htm. In addition, those regularly handling ICSID cases tend to share information about those cases and tend therefore to be better placed to advise on recent trends and developments, not to mention the practical aspects of dealing with ICSID’s Secretariat, which can also save considerable time and expense for the parties.
The recent dramatic increase in ICSID’s caseload has of course given rise to fresh challenges. A number of recent and pending cases focus on the ability of an investor to bring claims which are essentially contractual ones to ICSID under the terms of a bilateral investment treaty, thus avoiding the different jurisdiction clause which appears in the contract in question. A second issue focuses on the fact that ICSID hearings are held in private and awards are not always made available. With many cases involving very significant sums and impacting directly on the interest of the national host state, there have been recent demands from third parties to be admitted to and heard at ICSID hearings. These and other issues will continue to develop with ICSID practice over the coming years.
REFORMS
In October 2004 the Centre prepared a discussion paper entitled ‘Possible Improvements of the Framework for ICSID Arbitration’ (the Discussion Paper). The Discussion Paper suggested changes to the Arbitration Rules and the Additional Facility Rules concerning preliminary procedures, the publication of awards, third party access to proceedings and disclosure. Another significant suggestion in the Discussion Paper was the introduction of international appellate procedures for investment treaty arbitrations. Following an extensive consultation process conducted with members of the Centre’s Administrative Council, business and civil society groups and with arbitration experts and institutions around the world, the Centre issued a further Working Paper on 12 May 2005 containing more detailed plans for reform of the relevant rules. The Working Paper suggests that it would be premature to attempt to introduce an appellate procedure at present, which would best be implemented through a single ICSID instrument rather than changes to individual treaties. However, the Working Paper does make concrete suggestions for changes to the Arbitration Rules. The main changes proposed are to regularise the means by which third parties may gain access to ICSID proceedings and to provide for more uniform publication of Awards. Comments on the Working Paper were invited by 30 June 2005. The consultation process is ongoing.
APPENDIX
[Claimant] v [Respondent]
(ICSID Case No ARB/ … / … )
AGENDA First Session of the Arbitral Tribunal [date], [venue]
I. Procedural matters
1) Constitution of the Tribunal and Arbitrator’s Declaration (Arbitration Rule 6).
2) Representation of the Parties (Arbitration Rule 18).
3) Apportionment of Costs and Advance Payments to the Centre (Convention Article 61; Administrative and Financial Regulation 14; Arbitration Rule 28).
4) Fees and Expenses of the Arbitrator (Convention Article 60; Administrative and Financial Regulation 14; ICSID Schedule of Fees).
5) Applicable Arbitration Rules (Convention Article 44).
6) Place of Proceeding (Convention Articles 62 and 63; Administrative and Financial Regulation 26; Arbitration Rule 13(3)).
7) Procedural Language (Arbitration Rules 20(1)(b) and 22).
8) Records of Hearings (Arbitration Rule 20(1)(g)).
9) Means of Communications and Copies of Instruments (Arbitration Rules 20(1)(d) and 23; Administrative and Financial Regulations 24 and 30).
10) Pre-Hearing Conference (Arbitration Rule 21).
11) Written and Oral Procedures (Arbitration Rules 20(1)(e) and 29).
12) Number and Sequence of Pleadings, Time Limits, Supporting Documentation (Arbitration Rules 20(1)(c) and 31).
13) Witnesses and experts; written statements and reports (Arbitration Rules 35 and 36).
14) Dates of Subsequent Sessions (Arbitration Rule 13(2)).
II. Other matters
