The International Centre for Settlement of Investment Disputes (ICSID), a World Bank Group organisation, was established under the ICSID Convention, for the purpose of providing facilities for arbitration and conciliation of investment disputes between Contracting States and nationals of other Contracting States. Contracting States have agreed on ICSID as a forum for investor-State dispute settlement in most international investment treaties and in numerous investment laws and contracts.
ICSID recently announced that the ICSID rules for arbitration and conciliation of investment disputes have been updated, with the aim of modernizing, simplifying and streamlining them, while leveraging on information technology to reduce the environmental footprint of ICSID proceedings. The 2022 ICSID Regulations and Rules will come into effect on 1 July 2022. These changes will bring ICSID proceedings more in line with modern arbitration procedures and to address the frequent criticisms of ICSID proceedings not being sufficiently transparent.
Some of the most notable changes include:
- Publication of awards and decisions: The revised ICSID arbitration rules will further enhance public access to ICSID awards and decisions. The ICSID Convention requires party consent to publish awards and decisions. Under the revised rules, parties are deemed to have consented to an award/decision being published, unless they object within 60 days after such award/decision has been issued. Where there is an objection to publication of an entire award/decision, the ICSID Secretariat can publish excerpts of those parts of the award/decision not objected to.
- Electronic filing: All documents and submissions are to be filed electronically.
- Remote hearings: the new rules allow for the first session to be held by video conferencing. Similarly, hearings can be held via videoconferencing. ICSID can also accommodate hybrid hearings.
- Mandatory time frames:
- The new rules provide for time frames for tribunals to issue orders and awards. 60 days after last submission if the Tribunal decides that all claims are manifestly without legal merit. 180 days after last submission if the Tribunal declines jurisdiction in a bifurcated proceeding addressing jurisdiction. 240 days after last submission in all other cases.
- Bifurcation of proceedings: The new rules provide for bifurcation. The relevant factors for the Tribunal to consider when deciding whether to order bifurcation are similar to those for directing a preliminary determination in arbitrations.
- Expedited arbitration proceedings:The new rules provide an option for the parties to consent to expedited arbitrations, involving reduced time frames, for example for appointing arbitrators and for the various steps in the proceedings and putting a limit on the length of written submissions. The expedited procedure may seem to be appropriate for claims of low value.
- Disclosure of third-party funding: The new rules require parties to disclose third party funding, including the name and address of the funder.
- Security for costs: There are new provisions, allowing a tribunal to order any party making a claim or counterclaim to provide security for costs. In determining whether to order security for costs, the Tribunal will consider all relevant circumstances including the existence of third-party funding.
- Broader access to ICSID: Jurisdictional requirements under ICSID’s Additional Facility have been modified, providing States and investors access to Additional Facility arbitration and conciliation where one or both disputing parties is not an ICSID Contracting State. Regional Economic Integration Organizations—such as the European Union and ASEAN—may also be a party to proceedings under the amended Additional Facility Rules.
- Mediation and fact finding:New rules expressly permit ICSID to administer alternative dispute resolution mechanisms, such as mediation and fact-finding. Both may be used as stand-alone procedures or in combination with arbitration proceedings.
Over the coming months, ICSID will publish guidance notes to assist users in applying the updated rules.
For further information, please contact:
Joseph Chung, Partner, Deacons
joseph.chung@deacons.com
