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Modernising ICSID: New rule amendments get go-ahead from Member States
Modernising ICSID: New rule amendments get go-ahead from Member States
19 April 2022
Series
Blogs
19 April 2022
On 21 March 2022 the International Centre for the Settlement of Investment Disputes (“ICSID”) announced that its Member States have approved a comprehensive set of updates to the rules governing ICSID's procedure, which will now come into effect on 1 July 2022. The revisions intend to streamline ICSID's procedures in order to improve transparency, make proceedings faster and more convenient, and widen access to ICSID dispute resolution.
As we noted in November, moving forward with these amendments had been one of ICSID's key priorities last year. It is encouraging that this process, launched back in 2016, has now been concluded.
The forthcoming amendments cover (i) the Regulations and Rules for ICSID Convention Proceedings (including the ICSID Administrative and Financial Regulations, ICSID Institution Rules, ICSID Arbitration Rules, and ICSID Conciliation Rules), (ii) ICSID Additional Facility Proceedings, (iii) ICSID Mediation Proceedings, and (iv) ICSID Fact-Finding Proceedings (each available here). Some of the key reforms are set out below:
Efficiency of proceedings
Several of the amendments are designed to make proceedings swifter and more efficient:
Interestingly, the amendments also include a separate 'expedited' procedure which, should the parties choose to adopt it, provides a streamlined timetable with shorter deadlines for each stage of the proceedings (see Chapter XII of the Arbitration Rules). For example, under this expedited procedure the tribunal should render its award within 120 days of the hearing, which (if all time limits for previous stages are complied with) should take place no later than 260 days after the first session (Arbitration Rule 81).
Transparency
The amendments also take steps towards making ICSID proceedings more transparent and open to the public. Under the existing rules, parties' express consent is required for arbitral awards to be published. This is replaced under the updated rules with an 'opt-out' process whereby consent is automatically inferred if no party objects within 60 days after dispatch of the document (Arbitration Rule 62). Orders and decisions will also be published, incorporating any redactions the parties have agreed and notified to the Secretary-General of ICSID (Arbitration Rule 63). Written submissions or other documents filed in the proceedings will be published if the parties consent (Arbitration Rule 64).
Disclosure of third-party funding
Under the new Arbitration Rule 14, parties to proceedings must disclose the identity and address of non-parties who are funding (either the pursuit or defence of) a claim. If the funder is a juridical person, such as a company, the identities of the persons or entities who own and control the funder must also be disclosed. The arbitral tribunal also has the power to order disclosure of further information regarding any third-party funders.
Widening participation and access to ICSID proceedings
The amendments expand on the framework for non-disputing parties’ written submissions to proceedings (often referred to as amicus curiae submissions) in a new Arbitration Rule 67. The ability of non-disputing parties to make such submissions had already been formalised in the 2006 Rules (Arbitration Rule 37(2)). The revised rules flesh out additional criteria for tribunals to consider in deciding whether or not to allow submissions from such non-disputing parties, i.e. “the identity, activities, organization and ownership of the non-disputing party, including any direct or indirect affiliation between the non-disputing party, a party or a non-disputing Treaty Party” and “whether any person or entity will provide the non-disputing party with financial or other assistance to file the submission”. The tribunal can also provide this non-disputing party with documents filed during the proceedings, unless either party objects.
In addition, the amendments include updates to the jurisdictional requirements under ICSID's Additional Facility, meaning that Additional Facility arbitration and conciliation may be available even where neither party is an ICSID Contracting State (or national of one). Regional groups of states, such as the European Union, may also now be a party to Additional Facility proceedings (see Article 2 of the Additional Facility Rules).
What next?
The updated rules will come into force on 1 July 2022. ICSID have announced that they will publish guidance to assist those using the rules over the next few months. ICSID must hope that the wide-ranging amendments can modernise ICSID procedures and encourage broader engagement with investor-state dispute settlement. Now it has to be seen how these rules operate in practice and whether they will go some way to address concerns around transparency and stakeholder participation in investment arbitration.
Julia Grothaus and Hannes Ingwersen would like to thank Nick Kenny for his assistance in preparing this article.