Investment disputes enter the 21st century: ICSID announces amendments to rules of procedure

 
International investment law is a key mechanism by which governments seek to promote foreign direct investment and is promulgated through the thousands of investment treaties that have been concluded between states. Over 155 states have ratified the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (the ICSID Convention), which establishes the foremost arbitral institution for resolving investment disputes between investors and states, the International Centre for the Settlement of Investment Disputes (ICSID), under the auspices of the World Bank. On March 21, 2022, ICSID adopted amendments to its rules of procedure that will come into force on July 1, 2022.

What you need to know

• Given the breadth of investment treaties, virtually any company doing business internationally could find itself a claimant in an investor-state dispute settlement (ISDS) proceeding.
• The ICSID Rules are the most-used rules of procedure in ISDS proceedings.
• The amendments to the ICSID Rules modernize the process for resolving investor-state disputes in a number of respects, including by:
  • Enhancing transparency. Under the ICSID Convention, party consent is needed to publish awards and decisions. The amendments deem consent to publish unless a party objects within 60 days after an award is issued. Should a party object, the ICSID Secretariat is permitted to publish excerpts of the award that are not subject to an objection.
  • Expediting proceedings. The amendments include new options to expedite arbitrations including mandatory case management conferences, the potential for consolidation and coordination of relates cases, reduced time frames for various steps in a proceeding and mandatory timeframes for issuing awards and decisions.
  • Disclosure requirements for third-party funding. The amendments require a party to disclose the name and address of any non-party from whom the party has received funding in connection with the case, directly or indirectly.
  • Enhancing access to ICSID. The amendments permit greater access to the ICSID Additional Facility Rules, including where neither the state not the investor is an ICSID member state or a national of one. The amendments also allow Regional Integration Organizations like the European Union to access ICSID arbitration and conciliation procedures.
  • Enhancing the availability of alternative dispute resolution. The amendments include specific rules expressly permitting ICSID to administer alternative dispute resolution mechanisms such as mediation and fact-finding that may permit parties to resolve investment disputes without resorting to arbitration.

To discuss these issues, please contact the author(s).

This publication is a general discussion of certain legal and related developments and should not be relied upon as legal advice. If you require legal advice, we would be pleased to discuss the issues in this publication with you, in the context of your particular circumstances.

For permission to republish this or any other publication, contact Janelle Weed.

© 2024 by Torys LLP.

All rights reserved.