• Journal of Arbitration Studies
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• v.24 no.4
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• pp.3-28
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• 2014

This article examines the Annulment Mechanism of arbitral awards rendered under the auspices of the International Centre for Settlement of Investment Disputes (ICSID). The primary feature in the ICSID and non-ICSID arbitration regarding the review of awards involves the unified nature of the ICSID system, as compared to the scattered and multi-layered system of review existing under arbitration rules, national legislation, and international convention. This unity can be perceived at different levels. The ICSID annulment mechanism entails only a set of rules; thus, only one set of application standards of review will be implemented, as opposed to sometimes conflicting layers of application rules, laws, and convention, as in the case of non-ICSID arbitration. However, some of the recent annulment decisions have raised serious questions about the breadth of annulment in practice, as opposed to its original design. Nonetheless, implementing a new system under the ICSID awards to be reviewed by an appellate court appears to create more problems than it solves. The potential impact of introducing that mechanism could result in a longer and more complex proceeding, with uncertain benefits.

• Journal of Arbitration Studies
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• v.29 no.4
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• pp.187-210
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• 2019

This article examines the necessity for the introduction of an ICSID Appellate System. In comparison with the WTO appellate system, the ICSID ad hoc Committee has a very limited mandate. An annulment inquiry under the ICSID arbitration system barely focuses on whether the arbitral decision resulted from a justifiable process. As long as there is procedural legitimacy, the resulting awards remain unaffected under the annulment procedure, irrespective of mistakes of fact or law. In contrast, in the WTO DSS the AB substantively reviews panel rulings and suggestions that are founded on any deficiency of objectivity or error in the interpretation of a particular WTO provision. This defect intrinsic in the annulment procedure could cause injustice to a party earnestly interested in correcting recognized misapplication of law by ICSID tribunals. Accordingly, the establishment of an appellate system would result in a more substantive and procedural review of awards. The creation of such an ICSID appellate system would ensure thorough scrutiny of the decisions of the tribunal of first instance, leading to better reasoned outcomes. This could lead to a crystallization of predictability in investment relations. The end result would be that fairness, clarity, reliability, and legality in the ICSID adjudicative process would be unassailable, to the advantage of all the contracting parties.

• Journal of Arbitration Studies
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• v.28 no.1
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• pp.27-42
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• 2018

Due to the increasing number of foreign investments made by state-owned enterprises, there has been a growth in the number of investment arbitration claims submitted by them. However, international investment treaties including the ICSID Convention are intended to apply to investor-state disputes and according to Article 25 of the ICSID Convention, the claimant has to be "a national of another Contracting State." This raises the question of whether state-owned companies can be considered as "nationals of another Contracting State" or private investors. This issue has been discussed in the ICSID Decision on Jurisdiction in BUCG v. Yemen which has been released in 2017. Since there would be more claims related to the standing of state-owned enterprises as claimants, it is required to understand whether state-owned enterprises could be permitted access to the ICSID under the ICSID Convention Article 25. Moreover, the ICSID cases addressing the jurisdictional issues including BUCG v. Yemen has to be closely analyzed. In particular, as the Broches test was applied in order to decide the standing of state-owned companies, it is necessary to examine how the Broches criteria has been interpreted and adopted in the ICSID cases.

• International Commerce and Information Review
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• v.9 no.4
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• pp.141-158
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• 2007

The purpose of this paper is to examine the validity or effectiveness of the Arbitration Clause such as Model Clause I, and to confirm how other issues such as arbitrable "investment", appointment of arbitrators and law governing the agreement be reflected in the agreement. However, the parties should be sure that the arbitration clause is valid if they have checked whether, for their particular situation, the ICSID Centre has jurisdiction. For the validity of the Arbitration Clause, first the host country and the country which the investor belong to must be "contracting states" to the ICSID Convention. Second, the specific consent to arbitrate must be expressed in writing in the investment contract or in a national investment law or in an investment protection treaty. The issue of "nationality" of an other contracting state is determined by the place of incorporation or the location of the head office. In case the parties have doubts about a valid consent to arbitrate, Art. 41 of the ICSID Convention provides, regarding ICSID jurisdiction, that the tribunal shall be the judge of its own competence. It follows that ICSID Arbitration has an autonomous and exclusive character. As a consequence, domestic courts may not interfere with the question of ICSID's jurisdiction, which is called as "rule of abstention".

• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.68
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• pp.65-87
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• 2015

This article examines the Stay of Enforcement of ICSID Arbitration Award. The effect of the stay is that the award is not subject to enforcement proceedings under Article 54 of the ICSID Convention pending the outcome of the annulment application. The annulment committee must decide the stay, unless the applicant sought the stay with the request for annulment, in which case the ICSID Secretary -General must grant it automatically. This automatic stay -which can only relate to the entire award-remains in force until the committee is constituted and issues a decision on the request for stay. ICSID committees have taken different positions on whether a stay of enforcement is exceptional or not. Some committees have held that because the ICSID Convention explicitly recognizes that the rights of the award creditor could be subject to a stay, stays are not exceptional. ICSID practice shows that most committees have rejected the proposition that the merits and prospects of the application for annulment should influence the committee's decision whether to grant a stay. In addition, ICSID practice regarding the specific circumstances that will justify a stay of enforcement is unclear, and committees have focused on different factors to decide whether to grant a stay such as prospect of prompt compliance with the ward, hardship to one of the parties, risk of non-recovery and irreparable harm to the award debtor. Also, ICSID practice shows that even though the Convention is silent on this issue, committees have generally held that they are empowered to condition the stay of enforcement on the granting of security by the requesting party.

• Journal of Arbitration Studies
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• v.25 no.2
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• pp.71-96
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• 2015

This paper deals with the annulment of the ICSID(International Centre for Settlement of Investment Disputes) arbitral award. The annulment of the ICSID is characterized by the fact that it can be made possible through the special committee of ICSID only. The annulment of the ICSID was constructed on the premise that it is not an appeal procedure. However in the initial period, it was strongly criticized as it allowed new trials or duplicated many of the functions of an appeal and it broke down the boundary between the two systems. Although the trend seemed to be corrected through its 2nd and 3rd generations, it was still criticized for functioning as a new trial. It is approaching its 4th generation. On the other hand, with the activation of investment agreement arbitration based on ICSID and FTA, a certain degree of consistency is required for the ICSID arbitralaward. Also, with the emphasis on the public features of the arbitration for the investment agreement, the necessity of an appeal system is presented. The ICSID Secretariat published the "Opinion on the Appeal Procedure" in 2004 but as the system was criticized as too early due to the cost allocation problem and others, its adoption of an appeal procedure has been delayed. This paper focuses on how the currently incomplete ICSID arbitration judgment annulment system shall be used. Although it is still hardto expect the quality and consistent arbitral award annulment in the ICSID, this paper suggests that the "annulment without the actual new trial" using the restricted authority of a special commission in a creative way shall be pursued rather than just the actual new trial with or without annulment, thus going back to the original concept of the ICSID arbitral award annulment.

• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.37
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• pp.133-158
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• 2008

The purpose of this article is to examine the "Annulment" of ICSID Arbitration Award. Most of the international conventions provide for arbitration as the preferred method of dispute settlement. In general they either provide for ad hoc arbitration under the UNCITRAL Rules or under the rules of an acceptable arbitration institution, e.g. ICC, AAA, LCIA and in particular ICSID. The most distinctive feature of ICSID arbitration is the self-contained and exhaustive nature of its review procedures. Unlike other arbitration regimes, control is exercised by internal procedures rather than by the courts. Remedies against the award are limited to those provided for in the Convention and do not include court involvement. Especially, the annulment of the ICSID award by an ad hoc committee must be considered as jeopardizing ICSID Arbitration because it clearly depart from the current trends of international commercial arbitration which limits any kinds of judicial review and excludes any kinds of review on the merits. I wish that the future decisions of the ad hoc committees will restore a narrow scope to the ICSID procedure of annulment in order not to endanger the ICSID Arbitration mechanism.

• Journal of Arbitration Studies
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• v.28 no.1
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• pp.3-26
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• 2018

This article examines whether parties may agree to contractually waive the right to bring annulment proceedings. Alternately it looks at whether certain grounds of annulment may be waived. The ability for parties to resolve this issue contractually by waiving this element of Article 52(1)(b) ICSID offers a potentially powerful solution. For parties to agree beforehand to the circumstances where tribunals have not 'manifestly exceeded their power' could allow them to remove the unpredictability of annulment on this foundation. Even in the event that an ad hoc committee is against the validity of waiver, it may be possible for a party to frame this restriction as an interpretative agreement by the parties rather than strictly as waiver of a ground of annulment. Ultimately, the wish to enter into such an agreement would likely only be driven by a few exceptional commercial need or prior negative experience with the remedy of annulment. In that cases, and depending on the nature of the specific concern with annulment, a limited waiver or interpretative agreement on certain Article 52(1) ICSID grounds may certainly be appropriate.

• Journal of Arbitration Studies
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• v.31 no.1
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• pp.3-22
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• 2021

This article examines the Challenge through Annulment of ICSID Arbitral Awards. Either party may request annulment of the award by applying in writing addressed to the ICSID Secretary-General on one or more of the grounds under Article 52 of the ICSID Convention. The annulment proceedings must focus on the award itself. Because committees have no inherent supremacy over the arbitral tribunal, they should not review the tribunal's findings on evidence, damage, interest, and cost findings. Otherwise, the parties would have, in effect, two opportunities, and that will almost certainly weaken the reliability of the entire ICSID system. In short, because of the limited scope of review under ICSID annulment and because annulment is not an opportunity for the parties to re-try the case, committees should not allow new arguments or new evidence. Since an annulment committee is not a court of appeals, it cannot create a new res judicata. Committees can only decide not to annul an award, thus confirming the existing res judicata or annul the award, in which case the affected decision ceases to be res judicata. An obvious annulment decision stipulating which particular findings of the award remain res judicata should prevent any uncertainty in resubmission proceedings.

• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.62
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• pp.87-109
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• 2014

This article examines the regime for the recognition, enforcement and execution of arbitral awards rendered under the auspices of the International Centre for Settlement of Investment Disputes(ICSID). The effectiveness of international arbitration depends on the degree of finality of the award and the ease with which the award may be enforced by the prevailing part. The ICSID Convention provides for rigorous finality and seeks to establish optimal preconditions for the enforcement of awards in manner that distinguishes ICSID from other international arbitral regimes. As with other classes of disputes subject to judical or arbitral jurisdiction, most ICSID cases settle. In the cases that do proceed to award, participants must understand what will happen if the losing party fails to comply with the award voluntarily and the prevailing party takes the award through phases known as "recognition", "enforcement" and "execution". Investors should assess possible execution before finalizing investments and certainly before they initiate collection proceedings on ICSID awards. An investor with a monetary award in hand should attempt to locate assets of the losing State and then obtain comparative law advice to identify jurisdictions that allow attachment of at least certain categories of sovereign assets.