ICSID- The International Centre for Settlement of
Investment Disputes
Lecture by- Dr. Saltanat Sherwani
INTRODUCTION
The International Centre for Settlement of Investment Disputes is an
international arbitration institution established in 1966 for legal dispute
resolution and conciliation between international investors and States.
ICSID is the world’s leading institution devoted to international investment
dispute settlement.
ICSID is part of and funded by the World Bank Group, headquartered
in Washington, D.C., in the United States.
It is an autonomous, multilateral specialized institution to encourage
international flow of investment and mitigate non-commercial risks by a
treaty drafted by the International Bank for Reconstruction and
Development's executive directors and signed by member countries. ICSID
also promotes greater awareness of international law on foreign investment
and the ICSID process
As of May 2016, 153 contracting member states agreed to enforce and
uphold arbitral awards in accordance with the ICSID Convention.
ICSID is an independent, depoliticized and effective dispute-settlement
institution. Its availability to investors and States helps to promote
international investment by providing confidence in the dispute resolution
process.
HOW IT WORKS
ICSID provides for settlement of disputes by conciliation, arbitration or fact-
finding. The ICSID process is designed to take account of the special
characteristics of international investment disputes and the parties
involved, maintaining a careful balance between the interests of investors
and host States. Each case is considered by an independent Conciliation
Commission or Arbitral Tribunal, after hearing evidence and legal
arguments from the parties. A dedicated ICSID case team is assigned to
each case and provides expert assistance throughout the process. More
than 700 such cases have been administered by ICSID to date.
Member States
There are significant advantages to becoming a member of
ICSID. Member States and their nationals obtain access to investment
dispute settlement under the ICSID Convention and the Additional
Facility, as well as to the facilities and expert services of the Secretariat.
As Members, States participate in ICSID through their representation on
the Administrative Council. They may also nominate persons for the
ICSID Panels of Arbitrators and of Conciliators and make designations and
notifications for the purposes of the ICSID Convention.
ICSID maintains a comprehensive database of ICSID Member States,
which includes the designations and notifications made by each of them
under the ICSID Convention, and their nominations to the ICSID Panels of
Arbitrators and of Conciliators.
The ICSID institutional affairs team supports Member States in all matters
relating to membership and the general procedure. ICSID frequently gives
presentations on the ICSID process and tours of its facilities to State
delegations.
Panels of Arbitrators and of Conciliators
The ICSID Convention entitles each Member State to designate up to four
persons to the Panel of Arbitrators and up to four persons to the Panel of
Conciliators (Article 12 to 16 of the ICSID Convention). In addition, the
Chairman of the Administrative Council of ICSID may designate up to ten
persons to each Panel.
The designees of a Member State may be of any nationality. They serve for
a renewable term of six years and may serve on both Panels
simultaneously.
The arbitrators and conciliators listed on the Panels are available for
selection to ICSID Tribunals, Conciliation Commissions and ad
hoc Committees. The Panel lists are used most often to appoint where the
parties are unable to agree on a nominee . The Panel of Arbitrators is also
used for appointment to ad hoc Committees.
Overview of an Arbitration - ICSID Convention
An ICSID Convention arbitration proceeding is governed by:
• the ICSID Convention;
• the Rules of Procedure for the Institution of Conciliation and
Arbitration Proceedings (Institution Rules);
• the Rules of Procedure for Arbitration Proceedings (Arbitration
Rules); and
• the Administrative and Financial Regulations.
• The main steps in an ICSID Convention arbitration are depicted in
the following flow chart.
• Conduct of an ICSID Convention Arbitration
•
The ICSID Convention
The ICSID Convention provides the framework for the conduct of an
arbitration proceeding. The main procedural provisions are contained in
Chapters IV to VII of the Convention. All provisions of the Convention are
mandatory except when the Convention allows parties to agree otherwise.
If a question of procedure arises which is not covered by the Convention
or by the applicable Arbitration Rules, the Tribunal has discretion to
decide the question.
The Institution Rules
The Institution Rules explain how to institute an arbitration proceeding,
including the form and contents of the request for arbitration. They apply
to the steps taken between filing a request for arbitration until dispatch of
the notice of registration. Article 36 of the Convention also applies to this
period. On average, cases are registered within three weeks of the Centre
receiving the request for arbitration with supporting materials and the fee
for lodging the request.
The Institution Rules do not apply to the institution of post-award remedy
proceedings under the ICSID Convention and Arbitration Rules.
The Arbitration Rules
The Arbitration Rules govern the arbitration proceeding once a request for
arbitration has been registered. They complement the ICSID Convention
procedural provisions, including provisions concerning post-award
remedies.
Article 44 of the ICSID Convention provides that arbitrations will be
conducted in accordance with the Arbitration Rules in effect on the date
on which the parties consented to arbitration, except as the parties
otherwise agree. The current rules came into effect on April 10, 2006.
The Administrative and Financial Regulations
The Administrative and Financial Regulations contain provisions
concerning:
• the costs of the proceeding (Regulation 14 to 16);
• publication of case-related information (Regulation 22);
• functions with respect to individual proceedings, including the ICSID
Secretariat’s services (Regulation 23 to 29);
• calculation of time limits and submission of supporting
documentation (Regulation 29 to 30);
• immunities and privileges (Regulation 31 to 32); and
• official languages (Regulation 34).
