<?Page pageId="i"?>Oxford International Arbitration Series Annulment under the Icsid Convention

2012-11-30Final Pages OUP Oxford University Press Oxford University Press 20121130 ONIX data from OUP eng uk9780199653744 02 01 02 0199653747 03 9780199653744 15 9780199653744 BB 01 OUP OIALS Oxford International Arbitration Series Annulment Under the ICSID Convention 1 A01 Bishop, R. Doak R. Doak Bishop Senior Partner, King and Spalding, Houston 2 A01 Marchili, Silvia M. Silvia M. Marchili Senior Associate, King and Spalding, Houston 01 eng 329 12 2.0 LBHT International arbitration 12 2.0 LNAC5 Arbitration, mediation & alternative dispute resolution 12 2.0 LBBM3 Investment treaties & disputes 12 2.0 LBHG International courts & procedures 02 OXIMPRINTS OX OUP Oxford OUP Oxford Oxford GB 20121201 OxChapML 2.27 OUP TCI 20130904.0 Extracts Chapter Oxford International Arbitration Series ICOLRL ICMA Law-UK2013-09-20T10:27:29.338+01:00 <?Page pageId="i"?>Oxford International Arbitration Series Annulment under the Icsid Convention

Series Editor: Loukas Mistelis

Professor of Transnational Commercial Law and Arbitration

Queen Mary, University of London

<?Page pageId="ii"?>Oxford International Arbitration Series

Series Editor: Loukas mistelis

The aim of this series is to publish works of quality and originality on specific issues in international commercial and investment arbitration. The series aims to provide a forum for the exploration of important emerging issues and those issues not adequately dealt with in leading works. It should be of interest to both practitioners and scholarly lawyers.

Editorial Board

Professor lawrence boo

Deputy Chairman, Singapore International Arbitration Centre

Lord lawrence collins of mapesbury

Professor, University College London

Honorary and Emeritus Fellow, Wolfson College, Cambridge

Paul Friedland

Partner, White & Case LLP, New York

Professor catherine kessedjian

Professor of European Business Law and International Dispute Resolution,

University of Panthéon-Assas, Paris II, France

Professor vaughan lowe

Chichele Professor of Public International Law and Fellow of All Souls College, University of Oxford

Professor william w. park

Professor of Law, Boston University

Professor hans van houtte

Director of the Institute for International Trade Law, University of Louvain (KULeuven)

Professor francisco orrego vicuña

Judge of the International Monetary Fund Administrative Tribunal.

Co-Director, LL. M. Program on International Law, Trade, Investments and Arbitration, University of Heidelberg Center for Latin America, Santiago (2003–2007)

<?Page pageId="iii"?>Annulment Under the ICSID Convention

R Doak Bishop and

Silvia M Marchili

Great Clarendon Street, Oxford, OX2 6DP, United Kingdom Oxford University Press is a department of the University of Oxford. It furthers the University’s objective of excellence in research, scholarship, and education by publishing worldwide. Oxford is a registered trade mark of Oxford University Press in the UK and in certain other countries © R. Doak Bishop and Silvia M. Marchili, 2012 The moral rights of the authors have been asserted First Edition published in 2012 Impression: 1 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, without the prior permission in writing of Oxford University Press, or as expressly permitted by law, by licence, or under terms agreed with the appropriate reprographics rights organization. Enquiries concerning reproduction outside the scope of the above should be sent to the Rights Department, Oxford University Press, at the address above You must not circulate this work in any other form and you must impose this same condition on any acquirer Crown copyright material is reproduced under Class Licence Number C01P0000148 with the permission of OPSI and the Queen’s Printer for Scotland British Library Cataloguing in Publication Data Data available ISBN 978–0–19–965374–4 Printed in Great Britain by CPI Group (UK) Ltd, Croydon, CR0 4YY Links to third party websites are provided by Oxford in good faith and for information only. Oxford disclaims any responsibility for the materials contained in any third party website referenced in this work.

<?Page pageId="v"?>Series Editor’s Preface

This series of monographs is dedicated to specific issues in international arbitration law and practice, and gives authors the opportunity and the challenge of undertaking a more in-depth treatment than is possible in leading generalist works. It also provides an international forum for the profound exploration of important practical and theoretical matters and will further the development of arbitration as a self-luminous academic discipline and major international legal practice area.

This book addresses the fundamental topic of annulment process, law, and practice under the ICSID Convention, or dare I say, system. The main characteristic of ICSID has been that it is a closed (ie self-contained, autonomous) arbitral system, not interacting with national courts, so that the review or control of awards is only possible by ad hoc committees. Some early annulment decisions, such as Amco I and Klöckner I, appeared to have expanded the scope of annulment provided for in the ICSID Convention and were expectedly criticized. After these early cases (also called the ‘first generation’), subsequent annulment decisions in the second and third generations, such as Amco II, Vivendi I, and Wena, were all welcomed as positive developments, establishing confidence in the system and providing a cause for optimism. However, since 2002, a hyperactivity has been observed, and a fourth generation of annulment cases, such as Mitchell, CMS, Sempra, Enron, have caused quite a bit of discussion and criticism, and contain representation or comments that, to put it mildly, raise eyebrows and possibly introduce an unwanted element of uncertainty associated with ICSID annulment. Even if one were not to be ideological about annulment, uncertainty as to the scope of annulment has as an inevitable consequence an increase in the cost and length of proceedings. Some even criticize certain annulment committees as functioning de facto as appellate judges, and consider that in its application Article 52 of ICSID has had an uncharacteristic elasticity.

This monograph examines systematically the law and practice of ICSID annulment by examining the text of the Convention, the travaux préparatoires, and the general rules of treaty interpretation in accordance with the Vienna Convention of the Law of Treaties, and by dissecting the relevant jurisprudence. It also discusses from a historical and dogmatic perspective the issue of control mechanisms in international arbitration and attempts to establish confidence in international arbitration.

In this highly debated area Silvia Marchili and Doak Bishop offer profound knowledge and insight in writing and analysing complex issues. The topic is an ambitious and a challenging one but the authors have succeeded in their task and offer us a significant piece of work, rich in research and accurate in analysis. Most importantly the book is of practical relevance and value while at the same time maintaining the highest of academic standards.

I am very pleased to introduce this book, the seventh one in the Oxford International Arbitration Series to have emerged from the bridge which ought to exist between academic theory and practice.

Loukas Mistelis

London

20 June 2012

<?Page pageId="vii"?>Foreword

The ICSID Convention provides for annulment of awards under narrowly circumscribed circumstances. To the uninitiated reader this would suggest that this instrument is available only under rare and highly unusual circumstances. In actual practice, annulment has become an important part of litigation strategy under the Convention. Today it is often seen as offering a second chance to the losing party if only the stakes are high enough and the war chest is deep enough.

Annulment is designed to ensure that the outcome of the arbitration has remained within the framework of the parties’ agreement to arbitrate and was reached by a process that guaranteed fairness to them. In addition to the parties’ right to justice, there is also a public interest in the integrity of a process of dispute settlement established by a multilateral treaty.

Over time the emphasis between finality and review has shifted back and forth in ICSID annulment proceedings. Successive ad hoc committees have adopted varying approaches to their powers. Nearly all of them have emphasised the difference between annulment and appeal. But at times their willingness to delve deeply into questions of law and fact has surpassed that of a typical court sitting in appeal. Decisions on annulment are often elaborate sometimes surpassing the awards they scrutinize in length. But annulment is, or should be, concerned only with the legitimacy of the process of decision and not with its substantive correctness.

The activism of some ad hoc committees has been widely criticized by a number of observers. But the desire to contain the existing review process has not been uniform. There have also been calls for a new expanded review mechanism through the creation of an appellate facility.

Part of the difficulties in circumscribing the proper function of an ad hoc committee stems from the broad definition of the grounds for annulment. Excess of powers covers all issues that impact jurisdiction, including the existence of an investment, nationality, and the scope of consent to arbitration. Another form of excess of powers is failure to apply the proper law. Its application by ad hoc committees is vulnerable to blending into an examination of the correct application of the law. Departure from a rule of procedure is a ground for annulment only if the rule is fundamental and the departure is serious. This ground for annulment, though often invoked, has been accepted infrequently. Failure to state reasons is a particularly subjective standard. An examination of the adequacy of reasons easily leads to an examination of the award’s quality.

These and numerous other questions have made a monograph on the topic of annulment under the ICSID Convention highly desirable. The community of ICSID users and observers are much indebted to the authors of this book for undertaking an erudite and systematic presentation of this difficult subject.

Christoph Schreuer

November 2012

<?Page pageId="ix"?>Contents

List of Annulment Cases xiii

Table of Cases xv

Table of Legislation xxi

List of Abbreviations xxiv

I General framework and fundamental observations

1. Introduction

2. Article 52 of the ICSID Convention

A. Control Mechanisms in International Arbitration 2.01

B. Article 52 of the Convention 2.21

3. Finality of ICSID Awards

A. Finality of ICSID Awards 3.01

B. Differences between ICSID Annulment and Appellate Mechanisms 3.16

C. Two Dichotomies in Four Generations of ICSID Annulment Decisions: Finality v Fairness and Annulment v Appeal 3.20

4. Additional Considerations Regarding the ICSID Annulment Mechanism

A. Annulment of ‘Awards’ 4.01

B. The Presumption in Favour of Awards; Narrow and Broad Interpretation of the Grounds for Annulment 4.04

C. Committees’ Discretion and the Hair-trigger Rule 4.14

II Grounds for annulment

5. Improper Constitution of Tribunal

A. Constitution of ICSID Tribunals 5.03

B. The Drafting of Article 52(1)(a) 5.10

C. The Applicable Standard 5.19

D. Article 52(1)(a) and its Interplay with the Provisions on Disqualification and Revision 5.27

E. ICSID Practice under Article 52(1)(a) 5.38

F. Conclusion 5.53

6. Manifest Excess of Powers

A. The Tribunal’s Powers under the Convention 6.02

B. The Drafting of Article 52(1)(b) 6.05

C. The Applicable Standard 6.20

D. Manifest Excess of Powers Involving Jurisdictional Matters 6.46

E. Manifest Excess of Powers for Failure to Apply the Proper Law 6.146

F. Conclusion 6.314

7. Corruption of One of the Members of the Tribunal

A. Article 52(1)(c) and Relevant Rules 7.02

B. Case Law 7.09

C. Conclusion 7.10

8. Serious Departure from a Fundamental Rule of Procedure

A. Rules of Procedure under the ICSID Convention 8.04

B. The Drafting of Article 52(1)(d) 8.05

C. The Applicable Standard and the ‘Serious’ and ‘Fundamental’ Nature Requirements 8.10

D. ICSID Practice under Article 52(1)(d) 8.24

E. Manifest Excess of Powers and Failure to State Reasons as a Serious Departure from a Fundamental Rule of Procedure 8.85

F. Conclusion 8.88

9. ailure to State Reasons on Which the Award Is Based

A. The Tribunal’s Obligation to Provide Reasons 9.03

B. The Drafting of Article 52(1)(e) 9.07

C. The Applicable Standard 9.11

D. ICSID Practice on Article 52(1)(e) 9.43

E. Failure to Address Every Question Submitted to the Tribunal 9.161

F. Conclusion 9.206

10. Scope of Annulment Regarding Specific Issues

A. Factual Findings 10.02

B. Admissibility of New Arguments and Evidence 10.08

C. Damage, Interest, and Cost Findings 10.14

D. Res Judicata and Resubmissions 10.45

III Annulment procedure

11. Annulment Procedure

A. The Application for Annulment 11.02

B. Waiver 11.24

C. Constitution of the Annulment Committee 11.32

D. Substantiation 11.52

E. Powers and Functions of the Committee 11.54

F. The Decision on Annulment 11.77

G. Requests for Interpretation, Supplementation, and Rectification of Annulment Decisions 11.88

H. Recognition and Enforcement of Annulment Decisions 11.95

12. Stay of Enforcement and Guarantees

A. The Convention 12.01

B. Circumstances Leading to the Stay of Enforcement of the Award 12.11

C. The Request to Post Security 12.29

IV Additional observations

13. Comparison With Other Annulment Mechanisms

A. Review Mechanisms 13.05

B. Scope of Review 13.10

C. Additional Differences 13.14

D. Conclusion 13.19

14. Proposals to Modify the ICSID Annulment Mechanism

A. Background and Reasons for the Proposals 14.01

B. Suggested Alternatives 14.11

C. Conclusion 14.31

Appendix: Summary of ICSID Annulment Decisions 275

Select Bibliography 285

Index 299

<?Page pageId="xiii"?>List of Annulment Cases

Amco Asia Corporation and others v Indonesia, ICSID Case No ARB/81/1, Decision of the ad hoc Committee on the Application for Annulment, May 16, 1986 (‘Amco I’)

Amco Asia Corporation and others v Indonesia, ICSID Case No ARB/81/1, Decision on the Application by Indonesia and Amco respectively for Annulment and Partial Annulment of the Arbitral Award of June 5, 1990, and the Application by Indonesia for Annulment of the Supplemental Award of October 17, 1990, December 17, 1992 (‘Amco II’)

Azurix Corp v Argentine Republic, ICSID Case No ARB/01/12, Decision on the Application for Annulment of the Argentine Republic, September 01, 2009 (‘Azurix’)

CDC Group plc v Seychelles, ICSID Case No ARB/02/14, Decision on the Application for Annulment of the Republic of the Seychelles, June 29, 2005 (‘CDC’)

CMS Gas Transmission Company v Argentine Republic, ICSID Case No ARB/01/8, Decision of the ad hoc Committee on the Application for Annulment of the Argentine Republic, September 25, 2007 (‘CMS’)

Compagnie d’Exploitation du Chemin de Fer Transgabonais v Gabonese Republic, ICSID Case No ARB/04/5, Decision on the Application for Annulment of the Gabonese Republic, May 11, 2010 (‘Chemin de Fer Transgabonais’)

Compañía de Aguas del Aconquija SA and Vivendi Universal SA v Argentine Republic, ICSID Case No ARB/97/3, Decision on Annulment, July 03, 2002 (‘Vivendi I’)

Compañía de Aguas del Aconquija SA and Vivendi Universal SA v Argentine Republic, ICSID Case No ARB/97/3, Decision on the Argentine Republic’s Request for Annulment of the Award rendered on 20 August 2007, August 10, 2010 (‘Vivendi II’)

Consortium RFCC v Kingdom of Morocco, ICSID Case No ARB/00/6, Decision of the ad hoc Committee on the Application for Annulment of Consortium RFCC, January 18, 2006 (‘RFCC’)

Continental Casualty Company v Argentine Republic, ICSID Case No ARB/03/9, Decision on the Application for Partial Annulment of Continental Casualty Company and the Application for Partial Annulment of the Argentine Republic, September 16, 2011 (‘Continental Casualty’)

Duke Energy International Peru Investments No 1 Ltd v Peru (Duke), ICSID Case No ARB/03/28, Decision on the Application for Annulment, March 1, 2011 (‘Duke’)

Enron Creditors Recovery Corporation (formerly Enron Corporation) and Ponderosa Assets, LP v Argentine Republic, ICSID Case No ARB/01/3, Decision on the Application for Annulment of the Argentine Republic, July 30, 2010 (‘Enron’)

Fraport AG Frankfurt Airport Services Worldwide v Republic of the Philippines, ICSID Case No ARB/03/25, Decision on the Application for Annulment of Fraport AG Frankfurt Airport Services Worldwide, December 23, 2010 (‘Fraport’)

Helnan International Hotels A/S v Egypt, ICSID Case No ARB/05/19, Decision on the Application for Annulment, June 14, 2010 (‘Helnan’)

Hussein Nuaman Soufraki v United Arab Emirates, ICSID Case No ARB/02/7, Decision of the ad hoc Committee on the Application for Annulment of Mr. Soufraki, June 5, 2007 (‘Soufraki’)

Industria Nacional de Alimentos SA and Indalsa Perú SA (formerly Empresas Lucchetti SA and Lucchetti Perú SA) v Peru, ICSID Case No ARB/03/4, Decision on Annulment, September 5, 2007 (‘Lucchetti’)

Klöckner Industrie-Anlagen GmbH and others v United Republic of Cameroon and Société Camerounaise des Engrais, ICSID Case No ARB/81/2, Ad hoc Committee Decision on Annulment, May 3, 1985 (‘Klöckner I’)

Klöckner Industrie-Anlagen GmbH and others v United Republic of Cameroon and Société Camerounaise des Engrais, ICSID Case No ARB/81/2, Decision Rejecting the Parties’ Applications for Annulment, May 17, 1990 (‘Klöckner II’)

Malaysian Historical Salvors, SDN, BHD v Malaysia, ICSID Case No ARB/05/10, Decision on the Application for Annulment, April 16, 2009 (‘Malaysian Salvors’)

Maritime International Nominees Establishment v Guinea, ICSID Case No ARB/84/4, Decision on the Application by Guinea for Partial Annulment of the Arbitral Award dated January 6, 1988, December 22, 1989 (‘MINE’)

MCI Power Group, LC and New Turbine, Inc v Ecuador, ICSID Case No ARB/03/6, Decision on Annulment, October 19, 2009 (‘MCI Power’)

MTD Equity Sdn Bhd and MTD Chile SA v Chile, ICSID Case No ARB/01/7, Decision on the Application for Annulment of the Republic of Chile, March 21, 2007 (‘MTD’)

Patrick Mitchell v Democratic Republic of the Congo, ICSID Case No ARB/99/7, Decision on the Application for Annulment of the Award, November 1, 2006 (‘Mitchell’)

Repsol YPF Ecuador SA v Empresa Estatal Petróleos del Ecuador, ICSID Case No ARB/01/10, Decision on the Application for Annulment, January 8, 2007 (‘Repsol’)

Rumeli Telekom AS and Telsim Mobil Telekomunikasyon Hizmetleri AS v Kazakhstan, ICSID Case No ARB/05/16, Decision of the ad hoc Committee, March 25, 2010 (‘Rumeli’)

Sempra Energy International v Argentine Republic, ICSID Case No ARB/02/16, Decision on the Argentine Republic’s Request for Annulment of the Award, June 29, 2010 (‘Sempra’)

Sociedad Anónima Eduardo Vieira v Chile, ICSID Case No ARB/04/7, Decision of the ad hoc Committee of the Application for Annulment by Sociedad Anónima Eduardo Vieira, December 10, 2010 (‘Vieira’)

Togo Electricité and GDF-Suez Energie Services v Togo, ICSID Case No ARB/06/7, Decision on Annulment, September 6, 2011 (‘Togo Electricité’)

Wena Hotels Limited v Egypt, ICSID Case No ARB/98/4, Decision on the Application by the Arab Republic of Egypt for Annulment of the Arbitral Award dated December 8, 2000, February 5, 2002 (‘Wena’)

<?Page pageId="xv"?>Table of Cases International Centre for Settlement of Investment Disputes ADC

ADC Affiliate Ltd and ADC & ADMC Management Limited v Republic of Hungary, Award, October 2, 2006 3.08

AES

AES Corp v Argentine Republic, ICSID Case No ARB/02/17, Decision on Jurisdiction, April 26, 2005 3.08

Aguas del Tunari

Aguas del Tunari v Bolivia, ICSID Case No ARB/02/3, Decision on Respondent’s Objections to Jurisdiction, October 21, 2005 5.08

Amco I

Amco Asia Corp and others v Indonesia, ICSID Case No ARB/81/1, Ad Hoc Committee Decision on the Application for Annulment, May 16, 1986 (‘Amco I’) 1.03, 3.08, 3.23, 3.28, 3.30–3.31, 3.36, 4.11, 4.18–4.19, 6.96–6.100, 6.159, 6.174, 6.183, 6.191, 6.194–6.213, 6.226, 7.08, 8.24, 8.32–8.36, 9.15, 9.20, 9.36, 9.54–9.61, 9.164, 9.170–9.171, 9.173, 9.176–9.177, 9.180, 9.195, 10.38–10.39, 10.52–10.53, 11.05, 11.21, 11.29–11.30, 11.36, 11.56, 12.33, 12.37, 12.45

Amco II

Amco Asia Corp and others v Indonesia, ICSID Case No ARB/81/1, Decision on the Application by Indonesia and Amco respectively for Annulment and Partial Annulment of the Arbitral Award of June 5, 1990, and the Application by Indonesia for Annulment of the Supplemental Award of October 17, 1990, December 17, 1992 (‘Amco II’) 1.03, 3.11, 3.21, 3.23, 3.36, 3.39, 4.19, 4.22, 6.101–6.105, 6.160–6.161, 6.179, 6.219–6.222, 8.03, 8.13, 8.24, 8.40–8.42, 9.21, 9.69–9.71, 10.13, 10.28–10.29, 10.52–10.54, 10.58, 10.61, 11.14, 11.16, 11.20, 11.66, 11.68, 11.85, 12.08, 12.24, 12.26, 12.46–12.47

Azurix

Azurix Corp v Argentine Republic, ICSID Case No ARB/01/12, Decision on the Application for Annulment of the Argentine Republic, September 01, 2009 (‘Azurix’) 3.22, 4.11, 5.32–5.34, 5.38, 5.42–5.44, 6.28, 6.61–6.62, 6.129–6.133, 6.147, 6.151, 6.163, 6.176, 6.181, 6.261–6.264, 8.13, 8.15, 8.48, 8.59–8.64, 9.20, 9.36, 9.40, 9.124–9.126, 9.139, 9.200, 9.204, 10.31–10.32, 11.36, 11.70, 12.08, 12.13, 12.19, 12.24–12.26, 12.42, 12.57, 12.65

Bayindir (Decision on Jurisdiction)

Bayindir Insaat Turizm Ve Sanayi AS v Islamic Republic of Pakistan, ICSID Case No ARB/03/29, Decision on Jurisdiction, November 14, 2005 3.08

CDC

CDC Group plc v Seychelles, ICSID Case No ARB/02/14, Decision on the Application for Annulment of the Republic of the Seychelles, June 29, 2005 (‘CDC’) 1.04, 3.21–3.23, 3.40, 3.62, 4.22, 5.31, 5.39–5.41, 6.27, 6.40, 6.48, 6.150, 6.181, 6.236–6.238, 6.314, 8.14–8.15, 8.20, 8.24, 8.50–8.55, 9.12, 9.22, 9.81–9.84, 9.175, 9.200–9.201, 10.42, 11.36, 11.70, 11.86, 12.06, 12.08, 12.12, 12.15, 12.22, 12.24–12.25, 12.51

CMS

CMS Gas Transmission Company v Argentine Republic, ICSID Case No ARB/01/8, Decision of the Ad Hoc Committee on the Application for Annulment of the Argentine Republic, September 25, 2007 (‘CMS’) 1.04, 3.23, 3.41–3.42, 3.44, 3.49, 3.53, 3.58–3.62, 6.126–6.129, 6.147, 6.166, 6.176, 6.183, 6.251–6.260, 6.267, 6.273, 6.287, 6.314, 9.21, 9.23, 9.26, 9.36, 9.40, 9.108–9.123, 9.139, 9.147, 10.23, 11.12, 11.36, 11.69, 11.86, 12.06, 12.08, 12.15, 12.18–12.19, 12.24, 12.26–12.27, 12.33, 12.40, 12.42, 12.57, 12.64

Continental Casualty

Continental Casualty Company v Argentine Republic, ICSID Case No ARB/03/9, Decision on the Application for Partial Annulment of Continental Casualty Company and the Application for Partial Annulment of the Argentine Republic, September 16, 2011 (‘Continental Casualty’) 3.23, 6.141–6.143, 6.176, 8.83–8.84, 9.23, 9.26, 9.40, 9.151–9.153, 9.175, 9.183, 11.02, 11.09, 11.53, 12.18, 12.69

Duke

Duke Energy International Peru Investments No 1 Ltd v Peru (Duke), ICSID Case No ARB/03/28, Decision on the Application for Annulment, March 1, 2011 (‘Duke’) 3.23, 6.38, 6.62, 6.140, 6.148, 6.167, 6.302–6.303, 8.81–8.82, 9.20, 9.36, 9.154–9.157, 10.37, 11.36, 12.06, 12.08, 12.56

Enron

Enron Creditors Recovery Corp (formerly Enron Corp) and Ponderosa Assets, LP v Argentine Republic, ICSID Case No ARB/01/3, Decision on the Application for Annulment of the Argentine Republic, July 30, 2010 (‘Enron’) 1.04, 3.08, 3.22–3.23, 3.41, 3.43, 3.48–3.52, 3.62, 6.62, 6.137–6.139, 6.147, 6.261, 6.267, 6.273–6.296, 8.13, 8.15, 8.17, 8.48, 8.67–8.69, 9.20, 9.23, 9.26, 9.36, 9.40, 9.115, 9.117, 9.139–9.147, 9.162, 9.183, 9.200, 9.205, 10.12, 10.43, 11.02, 11.36,11.69, 12.08, 12.13, 12.15, 12.18, 12.20, 12.23–12.24, 12.27, 12.40, 12.66–12.67

Fraport

Fraport AG Frankfurt Airport Services Worldwide v Republic of the Philippines, ICSID Case No ARB/03/25, Decision on the Application for Annulment of Fraport AG Frankfurt Airport Services Worldwide, December 23, 2010 (‘Fraport’) 3.22–3.23, 6.86, 8.03, 8.07, 8.10, 8.23–8.24, 8.75–8.80, 9.23, 9.26, 9.39, 9.149, 11.51, 14.30

Helnan

Helnan International Hotels A/S v Egypt, ICSID Case No ARB/05/19, Decision on the Application for Annulment, June 14, 2010 (‘Helnan’) 6.135–6.136, 6.298, 8.66, 9.137, 9.175

Kardassopoulos and Fuchs

Kardassopoulos and Fuchs v Georgia, ICSID Case Nos ARB/05/18 and ARB/07/15, Decision of the Ad Hoc Committee on the Stay of Enforcement of the Award, November 12, 2010 12.01, 12.08, 12.15, 12.40–12.41, 12.54

Klöckner I

Klöckner Industrie-Anlagen GmbH and others v United Republic of Cameroon and Société Camerounaise des Engrais, ICSID Case No ARB/81/2, Ad Hoc Committee Decision on Annulment, May 3, 1985 (‘Klöckner I’) 1.03, 2.25, 3.23, 3.28, 3.30, 3.35–3.36, 4.04–4.08, 4.15–4.17, 4.21–4.22, 5.24, 6.28, 6.36–6.37, 6.39, 6.44, 6.49–6.50, 6.64, 6.87–6.95, 6.147, 6.158, 6.173, 6.176–6.178, 6.184–6.197, 6.226, 6.259, 8.21, 8.23–8.31, 9.01, 9.14, 9.19–9.20, 9.26, 9.39, 9.43–9.53, 9.60–9.61, 9.74, 9.121, 9.164–9.170, 9.173, 9.176–9.179, 9.185–9.186, 9.194, 9.197–9.198, 9.206, 11.65, 11.68, 11.82

Klöckner II

Klöckner Industrie-Anlagen GmbH and others v United Republic of Cameroon and Société Camerounaise des Engrais, ICSID Case No ARB/81/2, Decision Rejecting the Parties’ Applications for Annulment, May 17, 1990 (‘Klöckner II’) 3.39, 6.218, 8.23–8.24, 8.37–8.39, 9.66–9.68, 11.07, 11.20

Libananco

Libananco Holdings Co Limited v Republic of Turkey, ICSID Case No ARB/06/8, Decision on Applicant’s Request for Provisional Measures, May 7, 2012 11.61, 12.07, 12.15, 12.26, 12.28, 12.41, 12.71

Lucchetti

Industria Nacional de Alimentos SA and Indalsa Peru SA (formerly Empresas Lucchetti SA and Lucchetti Peru SA) v Peru, ICSID Case No ARB/03/4, Decision on Annulment, September 5, 2007 (‘Lucchetti’) 3.17, 6.41, 6.62, 6.68, 6.83–6.85, 6.147, 6.300, 8.22, 8.24, 8.57–8.58, 9.17, 9.23, 9.26, 9.105–9.107, 9.175, 9.200, 9.202, 11.53, 11.69, 12.07

Lucchetti (Rectification)

Industria Nacional de Alimentos SA and Indalsa Peru SA v Republic of Peru, ICSID Case No ARB/03/4, Rectification of the Decision on Annulment of the Ad Hoc Committee, November 30, 2007 11.94

Malaysian Salvors

Malaysian Historical Salvors, SDN, BHD v Malaysia, ICSID Case No ARB/05/10, Decision on the Application for Annulment, April 16, 2009 (‘Malaysian Salvors’) 3.22, 3.56, 6.78–6.82, 11.70, 12.07

MCI Power

MCI Power Group LC and New Turbine Inc v Ecuador, ICSID Case No ARB/03/6, Decision on Annulment, October 19, 2009 (‘MCI Power’) 3.08, 3.21–3.23, 6.180–6.181, 6.265–6.266, 9.127–9.129, 9.162, 9.183, 11.70

MINE

Maritime International Nominees Establishment v Guinea, ICSID Case No ARB/84/4, Decision on the Application by Guinea for Partial Annulment of the Arbitral Award dated January 6, 1988, December 22, 1989 (‘MINE’) 1.03, 3.11, 3.21, 3.23, 3.39, 3.53, 4.11, 4.21–4.23, 6.147, 6.175, 6.181, 6.191, 6.214–6.217, 6.250, 8.11–8.13, 8.15, 8.19, 8.24, 8.86, 9.01, 9.11, 9.20–9.21, 9.23, 9.26, 9.33, 9.61–9.65, 9.74, 9.113, 9.172–9.176, 9.176, 9.181, 9.187, 9.195, 9.199, 9.206, 10.15–10.17, 10.41, 11.12, 11.14–11.16, 11.18, 11.36, 11.66–11.67, 12.06, 12.08, 12.15, 12.21, 12.24–12.26, 12.33, 12.40, 12.58–12.59

Mitchell

Patrick Mitchell v Democratic Republic of the Congo, ICSID Case No ARB/99/7, Decision on the Application for Annulment of the Award, November 1, 2006 (‘Mitchell’) 1.04, 3.23, 3.41, 3.53–3.57, 3.62, 4.11–4.12, 4.22, 6.28, 6.107–6.114, 6.239–6.241, 6.308, 6.314, 9.23, 9.26, 9.28, 9.85–9.97, 10.20, 11.53, 11.69, 11.83, 11.87, 12.06, 12.08, 12.13, 12.15, 12.24, 12.26, 12.33, 12.39, 12.60–12.61, 12.65

MTD

MTD Equity Sdn Bhd and MTD Chile SA v Chile, ICSID Case No ARB/01/7, Decision on the Application for Annulment of the Republic of Chile, March 21, 2007 (‘MTD’) 3.22–3.24, 3.62, 6.38–6.39, 6.62, 6.147, 6.181, 6.242–6.245, 6.312, 8.20, 8.24, 8.86, 9.21, 9.28, 9.36, 9.98–9.102, 10.10, 10.21–10.22, 11.36, 11.69, 12.06, 12.08, 12.14–12.15, 12.17–12.18, 12.24, 12.26–12.27, 12.33, 12.40, 12.63

Nations Energy

Nations Energy Corp v Panama, Decision on the Request for Disqualification of Mr Stanimir A Alexandrov (ICSID Case No ARB/06/19), 7 September 2011 11.46–11.50

Pey Casado

Pey Casado and Fondation ‘Presidente Allende’ v Republic of Chile, ICSID Case No ARB/98/2, Decision on the Republic of Chile’s Application for a Stay of Enforcement of the Award, 5 May 2010 (‘Pey Casado’) 12.27, 12.40, 12.70

Repsol

Repsol YPF Ecuador SA v Empresa Estatal Petroleos del Ecuador, ICSID Case No ARB/01/10, Decision on the Application for Annulment, January 8, 2007 (‘Repsol’) 3.23, 6.28, 6.115–6.121, 6.173, 8.13, 8.56, 9.164, 9.175, 10.06, 11.70, 12.06, 12.26, 12.38, 12.52

Rumeli

Rumeli Telekom AS and Telsim Mobil Telekomunikasyon Hizmetleri AS v Kazakhstan, ICSID Case No ARB/05/16, Decision of the Ad Hoc Committee, March 25, 2010 (‘Rumeli’) 3.23, 4.12, 4.22, 6.38, 6.62, 6.134, 6.176, 8.65, 9.29, 9.36, 9.40, 9.130–9.136, 9.175, 9.188, 10.05, 10.25–10.26, 11.36, 11.69, 12.08, 12.56

Saipem

Saipem SpA v The People’s Republic of Bangladesh, ICSID Case No ARB/05/7, Award, June 30, 2009 14.29

Salini

Salini Costruttori SpA and Italstrade SpA v Kingdom of Morocco, ICISD Case No ARB/00/4, Decision on Jurisdiction, July 23, 2001 3.54, 3.56, 6.80, 9.85, 9.91

Sempra

Sempra Energy International v Argentine Republic, ICSID Case No ARB/02/16, Decision on the Argentine Republic’s Request for Annulment of the Award, June 29, 2010 (‘Sempra’) 1.04, 3.23, 3.41, 3.43–3.49, 3.62, 4.10, 5.38, 6.182, 6.267–6.273, 6.295, 9.23, 9.138, 10.11, 11.36, 12.08, 12.15, 12.18–12.19, 12.23–12.24, 12.53

Soufraki

Hussein Nuaman Soufraki v United Arab Emirates, ICSID Case No ARB/02/7, Decision of the Ad Hoc Committee on the Application for Annulment of Mr. Soufraki, June 5, 2007 (‘Soufraki’) 3.22–3.23, 4.10, 4.11, 4.22, 6.03, 6.33, 6.51, 6.61, 6.68, 6.75–6.77, 6.122–6.125, 6.147, 6.177, 6.180, 6.246–6.250, 6.310, 8.10, 9.16, 9.20, 9.23, 9.26, 9.40, 9.103–9.104, 11.08, 11.69, 11.94, 12.07

SPP

South Pacific Properties (Middle East) Ltd and South Pacific Properties Ltd (Hong Kong) v The Arab Republic of Egypt, ICSID Case No ARB/84/3, Award, May 20, 1992 4.02

Suez

Suez, Sociedad General de Aguas de Barcelona SA, and InterAguas Servicios Integrales del Agua SA v Argentina, ICSID Case No ARB/03/17, Decision on the Proposal for the Disqualification of a Member of the Arbitral Tribunal, October 22, 2007 5.05

Togo Electricité

Togo Electricité and GDF-Suez Energie Services v Togo, ICSID Case No ARB/06/7, Decision on Annulment, September 6, 2011 (‘Togo Electricité’) 6.28, 6.304–6.305, 9.21, 9.29, 9.40, 9.158–9.160, 9.164, 9.175, 11.06, 11.08, 11.30, 12.68

Vieira

Sociedad Anonima Eduardo Vieira v Chile, ICSID Case No ARB/04/7, Decision of the Ad Hoc Committee of the Application for Annulment by Sociedad Anonima Eduardo Vieira, December 10, 2010 (‘Vieira’) 4.10–4.11, 6.44, 6.62, 6.299–6.301, 8.23, 8.73–8.74, 9.23, 9.26, 9.40, 9.150, 10.09

Vivendi I

Compania de Aguas del Aconquija SA and Vivendi Universal SA v Argentine Republic, ICSID Case No ARB/97/3, Decision on Annulment, July 3, 2002 (‘Vivendi I’) 1.03–1.04, 3.23, 3.39, 3.63, 4.11, 4.22–4.23, 6.30–6.31, 6.68–6.74, 6.106, 6.135, 8.17, 8.48–8.49, 9.11, 9.20–9.21, 9.30–9.31, 9.36, 9.79–9.80, 9.175, 9.200, 10.52, 10.55, 11.12, 11.16–11.19, 11.40–11.45, 11.49, 11.58, 11.66, 11.68, 11.85, 11.90–11.93, 12.01, 12.07

Vivendi II

Compania de Aguas del Aconquija SA and Vivendi Universal SA v Argentine Republic, ICSID Case No ARB/97/3, Decision on the Argentine Republic’s Request for Annulment of the Award rendered on 20 August 2007, August 10, 2010 (‘Vivendi II’) 3.23, 5.14, 5.26, 5.38, 5.45–5.52, 6.297, 8.70–8.72, 10.27, 10.33, 10.36, 10.52, 10.55, 12.14–12.15, 12.23, 12.26, 12.57

Wena

Wena Hotels Limited v Egypt, ICSID Case No ARB/98/4, Decision on the Application by the Arab Republic of Egypt for Annulment of the Arbitral Award dated December 8, 2000, February 5, 2002 (‘Wena’) 1.04, 3.21, 3.23, 3.39, 3.53, 3.63, 4.11, 4.23, 6.27, 6.124, 6.154, 6.162–6.163, 6.223–6.235, 6.306, 8.12–8.13, 8.15, 8.20, 8.43–8.47, 9.37, 9.40, 9.72–9.78, 9.111, 9.113, 9.175, 9.195, 9.200, 10.04, 10.09, 10.18–10.19, 10.30, 10.34–10.35, 11.06, 11.68, 12.06, 12.14, 12.24, 12.49–12.50

International Court of Justice

Honduras v Nicaragua (Arbitral Award made by King of Spain) 1969 ICJ 216 9.166

Canada

United Mexican States v Metalclad Corp, 2001 BCSC 664 9.176, 9.182, 9.203

United States

Republic of Argentina v BG Group Plc 665 F.3d 1363 (2012) 13.20

UNCITRAL

Glamis Gold Ltd v United States of America, Award June 8, 2009 14.14

Table of Legislation <?Page pageId="xxi"?>International Treaties and Conventions

Canada-Venezuela Bilateral Investment Treaty

Art XII 13.15

Central-American Free Trade Agreement

Annex 10–F 14.19

Convention for the Pacific Settlement of International Disputes 1899

Art 31 3.01

Art 54 3.02

Energy Charter Treaty 1994

Art 26(4) 13.01

France-Argentina Bilateral Investment Treaty 9.79

Hague Convention for the Pacific Settlement of International Disputes 1907 3.01, 3.02

Art 37 3.01, 3.02

Art 79 9.03

Art 81 3.02

Iceland-Mexico Bilateral Investment Treaty

Art 20 13.15

Inter-American Convention on International Commercial Arbitration 1975 13.07

International Centre for Settlement of Investment Disputes (ICSID) Convention 1965

Art 6 11.41

(1)(c) 11.41

(3) 11.41

Art 12 5.05

Art 14 5.05, 5.12

(1) 5.05, 5.25, 5.27–5.28, 5.30,5.35, 5.46, 11.47

Art 25 6.03, 6.49, 11.55

(1) 6.78

(2)(b) 5.07, 6.129, 9.114, 9.139

Art 26 6.135, 6.200, 9.55, 11.75

Art 27 11.75–11.76

Art 36(3) 6.26, 6.56, 11.22

Art 37(2)(a) 5.04

(b) 5.04

Arts 37–40 5.09, 5.43

Art 38 5.04

Art 39 5.04, 5.06

Art 40 5.04

Art 41 6.59, 6.145, 11.54

(1) 6.02

(2) 6.02

Arts 41–45 2.26

Arts 41–47 6.02

Art 42 6.02–6.03, 6.147, 6.156, 6.160, 6.164, 6.185–6.186, 6.219, 6.227, 9.165, 11.56

(1) 6.02, 6.154, 6.158, 6.161–6.163, 6.166–6.167,6.186–6.187, 6.219, 6.224–6.227, 6.261, 6.304, 9.165

(3) 6.02

Art 43 6.02, 11.73

(a) 8.59

Art 44 6.02, 11.25–11.27, 11.74

Art 45 8.27, 8.50, 11.24, 11.74

Art 46 6.02, 11.19, 11.57–11.62

Art 47 6.02, 11.57–11.62

Art 48 2.26, 4.01, 9.165, 11.77, 11.79

(3) 5.44, 8.32, 9.04, 9.40, 9.82, 9.161–9.165, 9.170, 9.178

Art 49 2.26, 4.08, 9.190, 9.192, 9.196, 11.89

(2) 8.33, 9.169, 9.192–9.195, 11.09, 11.89

Art 50 4.08, 11.89

Art 51 4.08, 11.88–11.89

(1) 5.35

Art 52 1.02, 1.07, 1.09, 2.01–2.30, 3.11, 3.23, 3.53, 3.65, 3.67, 4.01–4.02, 4.08, 4.11, 4.15–4.16, 4.22, 5.32, 6.19, 6.21, 6.82, 6.94, 6.147, 6.170, 6.176, 6.184, 6.257, 7.03, 8.10, 8.85, 9.14, 9.49, 9.92, 9.121, 9.165–9.167, 10.01, 10.03, 10.52, 11.03, 11.28, 11.33, 11.48, 11.54, 11.75, 11.89, 13.10, 14.13, 14.30, 14.32

(1) 1.10, 3.21, 3.22, 3.65, 4.11–4.13, 4.15–4.16, 4.24, 6.60, 6.145, 6.150, 6.177, 6.302, 6.313, 8.05, 9.58, 9.82, 11.04–11.05, 11.07, 11.10–11.11, 11.13, 11.16–11.17, 11.21, 11.58, 11.88, 13.10, 13.16

(a) 5.01–5.02, 5.08–5.54, 7.06, 7.10, 8.21, 8.53, 10.02

(b) 6.01, 6.05–6.19, 6.43, 6.52, 6.59, 6.64, 6.133, 6.141, 6.147, 6.152–6.154, 6.156, 6.164, 6.185–6.305, 9.175, 10.04, 10.12, 10.28, 10.31–10.32, 10.36

(d) 5.24, 5.31, 5.38–5.39, 5.44–5.45, 6.289, 8.01–8.88, 9.167, 10.29, 10.35–10.36

(e) 3.54, 6.191, 6.293, 8.59, 8.66, 9.06–9.207, 10.09, 10.18, 10.20, 10.27, 10.36–10.37, 10.42

(2) 11.03, 11.19, 11.21

(3) 4.19, 4.21, 10.49, 11.12, 11.14, 11.16, 11.34, 11.46, 11.64, 12.38

(4) 11.19, 11.27, 11.37, 11.39, 11.41, 11.44, 11.49, 11.54–11.57, 11.59, 11.61, 11.68, 11.73, 11.75–11.77, 11.79, 11.88–11.89, 11.95

(5) 6.156, 11.60, 12.01, 12.05, 12.12, 12.40–12.41

(6) 10.58

Art 53 2.22, 2.26, 2.29, 3.05, 3.07,3.11, 3.17, 3.54, 4.08, 6.59, 6.64, 6.66, 6.145, 6.155, 6.184, 6.279, 9.92, 10.45, 10.59, 11.75, 12.20, 12.63, 12.67, 14.32

(1) 2.29, 9.21, 12.01

Art 54 2.26, 12.06, 12.70

Art 55(4) 11.37

Art 56 11.37

Arts 56–58 5.43

Art 57 5.27, 5.31, 5.33, 5.35, 5.39, 8.50, 8.53, 11.37, 11.45, 11.47–11.48

Art 58 5.33–5.34, 5.43–5.44

Arts 59–61 11.57

Art 61(2) 9.65, 10.41

Art 64 2.27

Italy-Bahrain Bilateral Investment Treaty

Art 11 13.15

Italy-United Arab Emirates Bilateral Investment Treaty 6.246

Mexico-Czech Republic Bilateral Investment Treaty

Art 17 12.06

Mexico-India Bilateral Investment Treaty

Art 19(8) 12.06

New York Convention on Recognition and Enforcement of Foreign Arbitral Awards 1958 6.12, 7.05, 13.02, 13.07

Art III 4.09

Art V 13.07, 13.13

(1)(d) 5.01

(e) 13.06, 13.17

Art VI 12.29, 13.17

North American Free Trade Agreement 1992

Chap 11 9.176

Art 1120 13.01

Statute of the International Court of Justice 1945

Art 34(1) 2.27

Art 37(3) 12.04

Art 56(1) 9.03

Art 61(3) 12.04

UNCITRAL Model Law on International Commercial Arbitration 6.12, 7.05, 13.08

Art 6 13.06

Art 18 8.19

Art 34 13.06, 13.12

(2)(a)(iv) 5.01

Art 36(1)(a)(iv) 5.01

(2) 12.30

United States-Argentina Bilateral Investment Treaty 9.108

Art II(2)(a) 9.126

Art XI 3.42, 3.44, 3.48–3.49, 3.58, 6.251–6.256, 6.267–6.273, 9.119–9.120, 9.138, 9.151–9.152

United States-Cameroon Bilateral Investment Treaty

Art VIII 2.20

United States-Chile Free Trade Agreement

Annex 10–H 14.19

United States-Congo Bilateral Investment Treaty

Art VIII 2.20

United States-Ecuador Bilateral Investment Treaty 6.265

United States-Egypt Bilateral Investment Treaty

Art VIII 2.20

United States-Grenada Bilateral Investment Treaty

Art VII 2.20

United States-Haiti Bilateral Investment Treaty

Art VIII 2.20

United States-Morocco Bilateral Investment Treaty

Art VII 2.20

United States-Morocco Free Trade Agreement

Annex 10–D 14.19

United States-Panama Bilateral Investment Treaty

Art VIII 2.20

United States-Senegal Bilateral Investment Treaty

Art VIII 2.20

United States Model Bilateral Investment Treaty

Art 34(6) 12.06

Vienna Convention on the Law of Treaties 1969 4.11, 6.85, 9.202

Art 31 1.08, 9.69

Art 32 1.08, 11.07

National Legislation France

Décret no 2011–48, 13 January 2011 13.18

Switzerland

Loi fédérale sur le droit international privé 1987 13.18

United Kingdom

Arbitration Act 1996

s 68(3) 13.18

United States

Federal Arbitration Act (9 U.S.C. §§ 1–16) 13.18

Trade Act 2002 14.19

<?Page pageId="xxiv"?>List of Abbreviations

BIT

bilateral investment treaty

FILJ

Foreign Investment Law Journal

ICJ

International Court of Justice

ICSID

International Centre for Settlement of Investment Disputes

ILC

International Law Commission

PCIJ

Permanent Court of International Justice

UNCITRAL

United Nations Commission on International Trade Law

R Doak Bishop Silvia M Marchili <?Page pageId="7"?><enumerator>2</enumerator> Article 52 of the ICSID Convention

A. Control Mechanisms in International Arbitration 2.01

B. Article 52 of the Convention 2.21

<enumerator>A.</enumerator> Control Mechanisms in International Arbitration

2.01 Control mechanisms exist to ensure that a system works in the way that it is designed to work.¹ They are concerned with the very existence of a community, its decision-making processes, and its continuing efficient operation.² In the case of international arbitration, control mechanisms can be a key factor in selecting a dispute-resolution venue. Moreover, because they affect the allocation of costs and benefits of the processes in which they operate, those mechanisms can be highly political and controversial, and are frequently the subject of explicit policy considerations.³

¹ See W M Reisman, Systems of Control in International Adjudication & Arbitration (Durham, NC: Duke University Press, 1992), 1.

² See Reisman, Systems of Control, 8.

³ See Reisman, Systems of Control, 3.

2.02 International arbitration has long involved a tension between the finality of awards (ie the fact that they amount to res judicata regarding the merits of the case) and control mechanisms. As early as 1617, Hugo Grotius wrote in De Iure Belli et Pacis:

[W]ith regard to arbiters who are referred to by compromise, the Civil Law may direct, and does in some places direct, that it shall be lawful to appeal from them, and to complain of their wrong; this cannot have place between kings and peoples. For in their case, there is no superior power, which can either bar or break the tie of the promise. And therefore they must stand by the decision, whether it be just or unjust; so that, as Pliny says, When you choose a person your umpire, you make him your supreme judge.⁴

⁴ H Grotius, De Iure Belli et Pacis (W Whewell translation) (London: John W Parker, 1853), Vol III, 351 (emphasis in the original). Note the reference to both the principle of res judicata and pacta sunt servanda. See Chapter 3 explaining that finality of awards is a natural consequence of those principles.

2.03 Notably, in translating this passage to French, Jean Barbeyrac qualified this clear expression regarding the finality of arbitral decisions by clarifying that Grotius undoubtedly assumed that the arbitrator did not engage in fraud or collusion.⁵ In 1672, Samuel von Pufendorf stated, like Grotius, that it was manifest that there could not be any appeal against the findings of arbitrators, ‘because there is no superior Judge who can revise their award’.⁶ At the same time, however, Pufendorf maintained that in cases of manifest collusion between an arbitrator and one of the parties, the award should not be binding on the other party.⁷ Michael Reisman pointed out the inconsistency in Pufendorf’s position on the finality of the award: if claims of nullity cannot be controlled, then no grounds for nullity can be admitted.^7a On the other hand, Pufendorf sought to avoid the imposition of a corrupted award on the innocent party. Faced with that challenge, Pufendorf qualified the ground for annulment so that only ‘manifest’ corruption may result in annulment. Reisman noted: ‘The inclusion of the word manifestly is only an illusory restriction on the unilateral power of nullification that Pufendorf proposed to sanction’.⁸

⁵ See H Grotius, Le Droit de la Guerre et de la Paix, Nouvelle Traduction par Jean Barbeyrac (Amsterdam: Pierre de Coup, 1729), Vol II, 491. Barbeyrac stated: ‘Notre Auteur suppose sans doute, qu’il n’y ait point de fraude ou de collusion de la part d’un Arbitre’ (citing Pufendorf).

⁶ S Pufendorf, ‘De Modo Litigandi in Libertate Naturali’ Book V, Chapter XIII, § 4 in De Iure Naturae et Gentium, Libri Octo (Frankfurt: Friderici Knochii & Filii, 1716), 785 (‘Caeterum id manifestum est, ab arbitris non posse provocari; cum nullus sit superior judex, qui sententiam eorum corrigere queat’). See S Pufendorf, ‘De Modo Litigandi in Libertate Naturali’ in W Evans Darby, International Tribunals, A collection of the various schemes which have been propounded (London: J M Dent, 1900) at 60 and M A Pierantoni, ‘La Nullité d’un Arbitrage International’ (1898) 30 Revue de Droit Internationale et de Législation Comparée 445, 455.

⁷ See S Pufendorf, ‘De Modo Litigandi’, 785 (‘Nam uti ideo quidem a compromisso resilire non licet, quod contra nos fuerit pronunciatum … ita tunc sane arbitri sententia nos non stringet, si manifeste adpareat, ipsum cum altera parte colludere, aut ab eadem donis corruptum, aut pactum in fraudem nostrum inivisse. Nam qui aperte ad alterutram sese partem adplicat, arbitri personam gerere amplius nequit’). See W M Reisman, Nullity and Revision—The Review and Enforcement of International Judgments and Awards (New Haven and London: Yale University Press, 1971), 22 et seq.

^7a See Reisman, Nullity and Revision, 24.

⁸ Reisman, Nullity and Revision, 24.

2.04 Emer de Vattel, for his part, maintained that once the parties to a dispute consent to arbitration, ‘they are bound to abide by the sentence of the arbitrators: they have engaged to do this; and the faith of treaties should be religiously observed’.⁹ Vattel identified, however, exemptions to the finality of awards: if the arbitrators pronounce ‘a sentence evidently unjust and unreasonable’ or if the party pretending to evade the sentence proves ‘by incontestable facts, that it was the offspring of corruption or flagrant partiality’.¹⁰ Moreover, Vattel identified ‘excess of power’ as a reason not to observe the decision of the arbitrators, because it is upon ‘the subject in dispute, the respective and opposite pretentions of the parties, the demands of the one, and the objections of the other…that the parties promise to abide by their judgment’.¹¹ Notably, in the absence of a reviewing authority, these grounds give the losing party ‘an extremely wide discretion’.¹²

⁹ E de Vattel, The Law of Nations (edited by J Chitty) (Cambridge: Cambridge University Press, 1834), §329, 277–8.

¹⁰ Vattel, The Law of Nations, 277–8.

¹¹ Vattel, The Law of Nations, 277–8.

¹² Reisman, Nullity and Revision, 25.

2.05 Two centuries later, Johan Kaspar Bluntschli published Das Moderne Völkerrecht der Civilisirten Staten, in which Article 495 provided that arbitral awards could be annulled for several reasons: if the arbitrators exceeded their powers, engaged in a denial of justice, failed to hear the parties, breached any other fundamental principle of procedure, or if the award was contrary to international law.¹³ According to Bluntschli, error or inequity, on the other hand, could not result in annulment.

¹³ See J C Bluntschli, Das Moderne Völkerrecht der Civilisirten Staten, Als Rechtbuch Dargestellt (1868), § 495, at 277. (‘Der Spruch des Schiedsgerichts kann von einer Partei als ungültig angefochten werden: a) wenn und soweit das Schiedsgericht dabaie seine Vollmachten überschritten hat, b) wegen unredlichen Verfahrens der Schiedsrichter, c) wenn das Schiedsgericht den Parteien das Gehor verweigert oder sonst die Fundamentalgrundsätze alles Rechtsverfahrens offenbar verletzt hat, d) wenn der Inhalt des Spruchs mit den Geboten des Volker und Menschenrechts unferträglich ist. Aber der Schiedsspruch darf night aus dem Grunde angefochten warden, das ser unrichtig or oder fur eine Partei unbillig sei. Vorbehalten bleibt die Berichtigung blosser Rechnungsfehler.’) For a throrough survey on grounds for annulments identified by different authors, see A Balasko, Causes de Nullité de la Sentence Arbitrale en Droit International Public (Paris: Pedone, 1938). See F Dreyfus, L’Arbitrage International (Paris: Calmann Lévy Editeur, 1892), 287–96.

2.06 Several initiatives that purported to codify international arbitration rules also contained provisions on annulment of awards. In 1875 in The Hague, the Institut de Droit International approved the Draft Rules for International Arbitral Procedure (Projet de règlement pour la procédure arbitrale internationale), which provided that an arbitration award was void if no arbitral agreement existed, a fundamental error had occurred, or in a case of excess of power by the tribunal or proven corruption by one of the arbitrators.¹⁴

¹⁴ See Institut de Droit International, The Hague Session, 1875, Projet de règlement pour la procédure arbitrale internationale, Art 27. (‘La sentence arbitrale est nulle en cas de compromis nul, ou d’excès de pouvoir ou de corruption prouvée d’un des arbitres ou d’erreur essentielle.’)

2.07 The 1899 Hague Peace Conference also addressed the issue of finality of awards vis-à-vis fairness concerns. While some delegates argued that arbitral decisions should be accepted as final, others—including Frederick Holls, on behalf of the US delegation—contended that the fundamental purpose of the court was to ascertain and administer justice, and thus, a miscarriage of justice would prejudice the court. Holls, therefore, maintained that the surest means to finally settle a controversy was by a judgment, the fairness of which could not be successfully attacked.¹⁵ The final text provided that awards were final, unless the parties expressly agreed to a process for revision.¹⁶

¹⁵ See J B Scott, The Hague Peace Conferences—1899 and 1907 (Baltimore: Johns Hopkins University Press, 1909), Vol 1, 81.

¹⁶ See Scott, The Hague Peace Conferences, 81.

2.08 By contrast, some authors in the late 1800s went as far as to maintain that, in cases in which the arbitrators exceeded their powers—or when another proper ground for annulment was found to exist—and no higher court had jurisdiction to review the arbitral award, a State party to the arbitration could unilaterally declare the invalidity of the award, and thus, justify a failure to comply with it.¹⁷

¹⁷ See Pierantoni, ‘La Nullité d’un Arbitrage International’, 455; W E Hall, A Treatise on International Law (Oxford: Clarendon Press, 1890), 362. Pasquale Fiore, for example, distinguished between grounds that made the award null, such as cases in which the decision (‘dispositif’) is contradictory, and those that could be used to request its annulment, such as cases of corruption of one of the arbitrators (see P Fiore, Le Droit International Codifié (Paris: Pedone, 1911), 619–20). Cfr J Limburg, ‘L’Autorité de chose jugée des décisions des juridictions internationales’ (1929) 30 Recueil des Cours 566–7.

2.09 Against this backdrop, as early as the creation of the Permanent Court of International Justice (PCIJ) in 1920, the international community has sought to implement an appeal or control mechanism for international awards, other than through domestic courts. In 1928, Szymon Rundstein—the Polish delegate at a series of conferences called by the League of Nations—proposed that States should be able to submit requests for appeals regarding excess of jurisdiction and violations of international law by arbitral tribunals, as well as requests for revisions.¹⁸ With respect to the court that would decide a request for revision, Rundstein’s project seemed to assume that the arbitral tribunal still existed—ie, that no functus officio had occurred—although it also included the possibility of appointing the PCIJ as the court in charge of deciding the request for revision.¹⁹

¹⁸ See Committee of Jurists on the Statute of the Permanent Court of International Justice, Minutes of the Session held at Geneva, Mar 11–19, 1929, Annex 6, at 105. The proposal stated: ‘§ 3. The appeal will lie as regards: (a) Violation of a rule of international law; (b) Exceeding of its competence by the tribunal. § 4. The appeal must be made to the Permanent Court of International Justice within the two months following the notification of the award by way of an application addressed to the Registrar’.

¹⁹ See Committee of Jurists on the Statute of the PCIJ, Minutes of the Session held at Geneva, Annex 6, at 105. The proposal stated: ‘§ 5. Eventual revision of an award belongs to the competence of the international arbitral or judicial tribunal which has been established by the signatory parties, except where they confer on the Permanent Court of International Justice jurisdiction as a tribunal for revision. An application for revision may only be made in accordance with the provisions of Article 61 of the Statute of the Court’. See Balasko, Causes de Nullité, 58 et seq.

2.10 This initiative was not isolated. The Institut de Droit International recommended in 1929 that in consenting to arbitration, States should agree to submit to the PCIJ all disputes between them concerning the jurisdiction of the arbitral tribunal or an excess of powers.²⁰

²⁰ See Extension de l’Arbitrage Obligatoire, Institut de Droit International, New York, 1929. (‘[L]es Etats, dans leurs conventions d’arbitrage, ainsi que dans les clauses compromissoires, signées par eux, conviennent de soumettre à la décision de la Cour permanente de Justice internationale toutes contestations entre eux au sujet, soit de la compétence du tribunal arbitral, soit d’un excès de pouvoir de ce dernier allégué par l’une des Parties.’)

2.11 Seizing the momentum, in the context of a proposal by the Government of Finland, the League of Nations appointed a Committee of Jurists to analyse what would be the most appropriate procedure for States to enable the PCIJ to act as a ‘tribunal of appeal’ in situations of an alleged lack or excess of jurisdiction.²¹ The Committee made alternative proposals, in all of which a party alleging the nullity of an award had to submit its request for annulment to the PCIJ, which could, in turn, annul the award in whole or in part.²² The Committee included as grounds for annulment a lack or excess of jurisdiction or a ‘fundamental fault in the procedure’.²³ The proposals languished, however, and the idea of implementing this mechanism proved to be premature.²⁴

²¹ See Proposal of the Government of Finland to Confer on the Permanent Court of International Justice Jurisdiction as a Tribunal of Appeal in Respect of Arbitral Tribunals Established by States, Report of the Committee Appointed by the Council, 11 League of Nations OJ (1930) 1359.

²² See Proposal of the Government of Finland, Report of the Committee Appointed by the Council, 11 League of Nations OJ (1930) 1363. See Balasko, Causes de Nullité, 58 et seq, and Reisman, Systems of Control, 49.

²³ Proposal of the Government of Finland, Report of the Committee Appointed by the Council, 11 League of Nations OJ (1930) 1364.

²⁴ See W M Reisman, ‘The Supervisory Jurisdiction of the International Court of Justice’ (1996) 258 Recueil de Cours 46. See Balasko, Causes de Nullité, 85 and 11 League of Nations OJ (1930) 1363–4.

2.12 After the Second World War, these ideas found their way into the United Nations. In its 1949 session, the International Law Commission (ILC) included ‘arbitral procedure’ as one of the three topics for codification, and it instructed Special Rapporteur Professor Georges Scelle to prepare a code for international arbitral procedure.²⁵ From the outset, the res judicata of arbitral awards and a potential review mechanism were considered as key issues to develop or codify. By then, regardless of the principle according to which arbitral awards were res judicata, ‘efforts have often been made, and have often succeeded, to re-open cases in which the award was not satisfying to one of the parties’.²⁶ In fact, the ILC’s Secretariat considered that there was much dissatisfaction with the res judicata principle, and that lack of any means of recourse against arbitral awards had led to numerous complaints regarding certain arbitral decisions.²⁷ It concluded, ‘the trend is now in the direction of providing some means of appeal’.²⁸

²⁵ See Memorandum Prepared by the Secretariat, Doc A/CN.4/35, Nov 21, 1950, at 158.

²⁶ Memorandum, Doc A/CN.4/35, at 177.

²⁷ See Memorandum, Doc A/CN.4/35, at 177.

²⁸ Memorandum, Doc A/CN.4/35, at 177.

2.13 In his first report, Scelle acknowledged the res judicata principle, although he maintained that it was not absolute.²⁹ The subsequent Avant-Projet confirmed the principle, but stated that any vices affecting the validity of the award should be heard before a new tribunal—the Permanent Court of Arbitration or the International Court of Justice (ICJ)—which would then decide whether the request should be addressed in the context of an appeal or a cassation.³⁰

²⁹ See Report on Arbitral Procedure by Georges Scelle, Special Rapporteur, Doc A/CN.4/18, 21 March 1950, at 142. (‘La sentence arbitrale possède l’autorité de la chose jugée.’)

³⁰ See Doc A/CN.4/18, at 147 and Avant-Projet de Texte Proposé § XVI. The second Avant-Projet of 1951 did not introduce any substantial changes (see Deuxième Report par M. Georges Scelle, Special Rapporteur, Doc A/CN.4/46, May 28, 1951, at 119–20).

2.14 In June 1952, the ILC specifically addressed the issue of whether to include in the project a potential appeal, cassation, or annulment mechanism. During the debates, the chairman stated that the concern resulting from arbitral decisions rendered ultra vires or involving gross errors of law or fact had inspired some jurists to propose that the PCIJ be empowered to review arbitral awards as a court of second instance. The chairman considered, however, that although the concern was justified, that proposal was an inadequate solution.³¹ He pointed out that both appeal and cassation were extraneous to international arbitration, and that submitting arbitral awards to appeal before an international court ‘would be to disregard the nature of arbitration itself’.³² Moreover, the chairman highlighted that the essence of arbitration was that the parties submitted their dispute to judges of their own choice, and that it would be manifestly inconsistent for the parties to place their confidence not in the judges they chose themselves, but in an appellate court.³³ As a result, the commission instead included the control mechanism proposed by the representative of Colombia, which contained three of the five grounds for annulment in Article 52 of the ICSID Convention.³⁴

³¹ See Doc A/CN.4/SER.A/1952, Yearbook of the International Law Commission, 1952, Vol I, at 83.

³² Doc A/CN.4/SER.A/1952, at 83.

³³ See Doc A/CN.4/SER.A/1952, at 84. See J Paulsson, ‘ICSID’s Achievements and Prospects’ (1991) 6 ICSID Rev–FILJ 387 (making a similar remark in the context of ICSID arbitration).

³⁴ See Doc A/CN.4/SER.A/1952, at 88. The new provision stated: ‘The validity of an award may be challenged by either party on one or more of the following grounds: (a) if the tribunal has exceeded its powers; (b) the corruption of a member of the tribunal; (c) if there has been a serious departure from a fundamental rule of procedure’.

2.15 Notably, during the debates, even those representatives who supported the possibility of challenging a decision due to excess of jurisdiction, such as the UK representative, Hersch Lauterpacht, rejected the possibility of appeal due to error of law or an incorrect application of international law.³⁵

³⁵ See Doc A/CN.4/SER.A/1952, at 84.

2.16 In light of these discussions and amendments, in its fourth session in 1952, the ILC adopted a ‘Draft on Arbitral Procedure’ and circulated it to the members of the United Nations for comment. During subsequent debates, the ILC included failure to state reasons as a type of ‘serious departure from a fundamental rule of procedure’, and clarified that it had decided ‘having regard to the paramount requirement of finality, not to amplify…the grounds on which the annulment of the award may be sought’.³⁶ As a result of this amendment, the 1953 version of the ILC Model Rules, on which the drafters of the ICSID Convention relied in drafting Article 52,³⁷ provided:

Annulment of the award

Article 30

The validity of an award may be challenged by either party on one or more of the following grounds:

(a) That the tribunal has exceeded its powers;

(b) That there was corruption on the part of a member of the tribunal;

(c) That there has been a serious departure from a fundamental rule of procedure, including failure to state the reasons for the award.³⁸

³⁸ Report of the International Law Commission to General Assembly (A/2456), in Doc A/CN.4/76, at 211. See Broches, ‘Observations on the Finality of ICSID Awards’, 325.

³⁶ Report of the International Law Commission to General Assembly (A/2456), in Doc A/CN.4/76, at 205, 211.

³⁷ See A Broches, ‘Observations on the Finality of ICSID Awards’ (1991) 6 ICSID Rev–FILJ 325. See ICSID, ‘Background Paper on Annulment for the Administrative Council of ICSID’, Aug 10, 2012, at 5.

2.17 The ILC was of the view that requests for annulment of international awards should be heard by the International Court of Justice.³⁹ In adopting that position, the ILC took into account the 1929 resolution of the Institute de Droit International, and the work of the Committee of Jurists of the League of Nations.⁴⁰ Nonetheless, this approach was criticized for allegedly restricting international tribunals’ independence from the ICJ.⁴¹

³⁹ See Draft on Arbitral Procedure Adopted by the Commission at its Fifth Session Report by Georges Scelle, Special Rapporteur, Doc A/CN.4/SER.A/1958/Add.l, at 11. See Report of the International Law Commission to General Assembly (A/2456), in Doc A/CN.4/76, Art 31, at 211.

⁴⁰ See Draft on Arbitral Procedure, Doc A/CN.4/SER.A/1958/Add.l, at 11.

⁴¹ See Draft on Arbitral Procedure, Doc A/CN.4/SER.A/1958/Add.l, at 11.

2.18 The drafters included further amendments and the 1958 version of the rules added a fourth ground for annulment: ‘(d) That the undertaking to arbitrate or the compromis is a nullity’.⁴² In the commentary to that article—which in the 1958 version is Article 35—the ILC clarified that this principle also applied to the validity of international treaties, but that in any event these cases should prove exceedingly rare.⁴³ Scelle explained that the rationale behind this article was that arbitration practice has always conflicted with the principle of absolute finality of arbitral awards, although different opinions existed with respect to the specific grounds that should lead to annulment.⁴⁴

⁴² Report of the International Law Commission Covering the Work of its Tenth Session (A/3859), Apr 28–Jul 4, 1958, at 86.

⁴³ See Report of the International Law Commission (A/3859), at 88.

⁴⁴ See Draft on Arbitral Procedure, Doc A/CN.4/SER.A/1958/Add.l, at 11.

2.19 The General Assembly rejected the proposal and adopted the text merely as a set of ‘Model Rules’. The final text of the Model Rules includes the fourth ground for annulment—nullity of the undertaking to arbitrate or compromis—as well as a new article providing for the finality of the award, which states: ‘The arbitral award shall constitute a definitive settlement of the dispute’.⁴⁵

⁴⁵ Report of the International Law Commission (A/3859), at 86. The final version of Art 35 reads: ‘Validity and Annulment of the Award. Article 35: The validity of an award may be challenged by either party on one or more of the following grounds: (a) That the tribunal has exceeded its powers; (b) That there was corruption on the part of a member of the tribunal; (c) That there has been a failure to state the reasons for the award or a serious departure from a fundamental rule of procedure; (d) That the undertaking to arbitrate or the compromis is a nullity’ (Report at 86). See K S Carlston’s Codification of International Arbitral Procedure, Art IX of which appoints the ICJ as an appellate and annulment court (‘Codification of International Arbitral Procedure’ (1953) 47(2) American Journal of International Law 223).

2.20 States have adopted the ILC Model Rules only in a few instances.⁴⁶ Nevertheless, this model provides important background for the development of international arbitral procedure, and in the 1953 version is to be found the predecessor to Article 52 of the ICSID Convention. The drafters of the ICSID Convention, however, took a further step towards designing a self-contained control mechanism within ICSID, a key feature of ICSID as the following section explains.

⁴⁶ See US-Grenada BIT. (Art VII: ‘1. Any dispute between the Parties concerning the interpretation or application of this Treaty … shall be submitted, upon the request of either Party, to an arbitral tribunal for binding decision in accordance with the applicable rules of international law. In the absence of an agreement by the Parties to the contrary, the Model Rules on Arbitral Procedure adopted by the United Nations International Law Commission in 1958 as referred to in U.N. General Assembly Resolution 1262 (XIII) shall govern.’) See US-Senegal BIT, Art VIII; US-Morocco BIT, Art VII; US-Panama BIT, Art VIII; US-Haiti BIT, Art VIII; US-Egypt BIT, Art VIII; US-Congo BIT, Art VIII; and US-Cameroon BIT, Art VIII.

<enumerator>B.</enumerator> Article 52 of the Convention

2.21 The drafters of the ICSID Convention sought, like the ILC, to reconcile finality of the award with the need to prevent flagrant cases of excess of jurisdiction and injustice.⁴⁷

⁴⁷ See A Broches, ‘Awards Rendered Pursuant to the ICSID Convention: Binding Force, Finality, Recognition, Enforcement, Execution’ (1987) 2 ICSID Rev–FILJ 290.

2.22 The 1962 Working Paper by Aron Broches, General Counsel of the World Bank, which constitutes the first draft of the Convention, only provided for the interpretation and revision of awards and not for their annulment.⁴⁸ Thus, in the Working Paper, ICSID awards were ‘absolutely’ final.⁴⁹ The drafters only incorporated the annulment mechanism in the 1963 Preliminary Draft.⁵⁰

⁴⁸ For a description of the genesis of the Convention, see A Broches, ‘Development of International Law by the International Bank for Reconstruction and Development’ (1965) 59 American Society of International Law Proceedings 30. Aron Broches was in charge of the World Bank staff work on the Convention and was also Chairman of the Regional Consultative Meeting and of the Legal Committee division of the Executive Directors of the World Bank.

⁴⁹ See P Lalive, ‘Concluding Remarks’ in E Gaillard and Y Banifatemi (eds), Annulment of ICSID Awards (New York: Juris Publishing Inc, 2004), 300, and Mitchell, Decision on the Respondent’s Request for a Continued Stay of Execution, Jun 1, 2005, para 40, arguing that in the absence of the annulment procedure, the States would not have ratified the ICSID Convention. With respect to the finality of ICSID awards, although the language in the Working Paper was slightly different than the final version of Art 53, it still provided that the award shall be final and binding and that each party ‘shall abide by and comply with the award immediately’. (See History of the ICSID Convention, Vol I, 242.)

⁵⁰ See History of the ICSID Convention, Vol II, 42–3, 217. See D A Redfern, ‘ICSID—Losing its Appeal?’ (1987) 3(2) Arbitration International 98–118, 99; ICSID, ‘Background Paper’, 6.

2.23 The text of the provision on annulment in the 1963 Preliminary Draft was identical to that of the 1953 ILC Draft Rules on Arbitral Procedure.⁵¹ After further debate, the drafters modified the text of that article, substituting the passive voice for the active voice in the first sentence, separating the last two grounds for annulment, and adding the possibility for the parties to agree that the tribunal did not need to state reasons for the award.⁵² By December 1964, the drafters agreed on what would become the final text of Article 52 of the ICSID Convention.⁵³

⁵¹ The 1963 Preliminary Draft provided: ‘The validity of an award may be challenged by either party on one or more of the following grounds: (a) That the tribunal has exceeded its powers; (b) That there was corruption on the part of a member of the tribunal; or (c) That there has been a serious departure from a fundamental rule of procedure, including failure to state the reasons for the award’. (See History of the ICSID Convention, Vol I, 230.)

⁵² See History of the ICSID Convention, Vol I, 232. That version of the article stipulated: ‘Either party may request annulment of the award by an application in writing addressed to the Secretary-General on one or more of the following grounds: (a) that the Tribunal was not properly constituted; (b) that the Tribunal has manifestly exceeded its power; (c) that there was corruption on the part of a member of the Tribunal; (d) that there has been a serious departure from a fundamental rule of procedure; or (e) failure to state the reasons for the award, unless the parties have agreed that reasons need not be stated’.

⁵³ See History of the ICSID Convention, Vol II, 926–7.

2.24 Article 52 is included in Section 5 of the Convention, which covers the review mechanisms of awards under the Convention: interpretation, revision, and annulment. Article 52 governs ‘the extraordinary and narrowly circumscribed remedy of annulment’ and its concise text lists the five grounds on the basis of which an ICSID award may be annulled.⁵⁴ It provides:

(1) Either party may request annulment of the award by an application in writing addressed to the Secretary-General on one or more of the following grounds:

(a) that the Tribunal was not properly constituted;

(b) that the Tribunal has manifestly exceeded its powers;

(d) that there has been a serious departure from a fundamental rule of procedure; or

(e) that the award has failed to state the reasons on which it is based.

⁵⁴ See Broches, ‘Observations on the Finality of ICSID Awards’, 327.

2.25 At least two of the grounds for annulment under Article 52 of the Convention include express qualifications that convey a sense of gravity. An excess of power must be manifest, a departure from a fundamental rule of procedure must be serious, and it must involve a fundamental rule of procedure in order to be deemed a ground for annulment.⁵⁵ The use of qualifiers such as ‘manifest’, ‘serious’, and ‘fundamental’ suggests that the powers of an ad hoc committee to annul an ICSID award were intended to be limited.⁵⁶

⁵⁵ In the case of a failure to state reasons, the Convention does not qualify the reasons that should be given. One interpretation of the absence of qualifiers is that the drafters intended that only a total absence of reasons (ie the failure to provide any reasons) would qualify as a ground for annulment. See Klöckner para 3: ‘The very language of the provision demands a cautious approach: sub-paragraph (b) requires that the Tribunal’s excess of powers be “manifest.” Likewise, under sub-paragraph (d), only a “serious departure” from a fundamental rule of procedure can justify challenging an award. Finally, the Convention envisages in sub-paragraph (e) a “failure to state reasons and not, for example, a mistake in stating reasons. With respect to each complaint, the ad hoc Committee will determine the meaning which must be given to the legal concepts involved”’.

⁵⁶ See Redfern, ‘ICSID—Losing its Appeal?’, 102–03; and Paulsson, ‘ICSID’s Achievements and Prospects’, 387.

2.26 The other provisions in Article 52 of the Convention relate to the time limit for annulment applications, the appointment of the committee members, the applicable rules to the annulment procedure, the possibility of staying the enforcement of the underlying award, and the resubmission of wholly or partially annulled decisions to a new tribunal.⁵⁷

⁵⁷ The remaining provisions of Art 52 stipulate: ‘(2) The application shall be made within 120 days after the date on which the award was rendered except that when annulment is requested on the ground of corruption such application shall be made within 120 days after discovery of the corruption and in any event within three years after the date on which the award was rendered. (3) On receipt of the request the Chairman shall forthwith appoint from the Panel of Arbitrators an ad hoc Committee of three persons. None of the members of the Committee shall have been a member of Convention on the Settlement of Investment Disputes between States and Nationals of Other States the Tribunal which rendered the award, shall be of the same nationality as any such member, shall be a national of the State party to the dispute or of the State whose national is a party to the dispute, shall have been designated to the Panel of Arbitrators by either of those States, or shall have acted as a conciliator in the same dispute. The Committee shall have the authority to annul the award or any part thereof on any of the grounds set forth in paragraph (1). (4) The provisions of Articles 41–45, 48, 49, 53 and 54, and of Chapters VI and VII shall apply mutatis mutandis to proceedings before the Committee. (5) The Committee may, if it considers that the circumstances so require, stay enforcement of the award pending its decision. If the applicant requests a stay of enforcement of the award in his application, enforcement shall be stayed provisionally until the Committee rules on such request. (6) If the award is annulled the dispute shall, at the request of either party, be submitted to a new Tribunal constituted in accordance with Section 2 of this Chapter’.

2.27 With respect to the body in charge of deciding an annulment request, the ICSID Convention offers a unique solution: an ad hoc committee acting within the ICSID system and wholly appointed by ICSID. Interestingly, the drafters discarded the possibility of providing for the International Court of Justice as the competent court to hear applications for annulment because under Article 34(1) of the ICJ Statute, only States can be parties to cases before the Court.⁵⁸

⁵⁸ See Broches, ‘Awards Rendered Pursuant to the ICSID Convention’, 290. Art 64 of the ICSID Convention provides that a dispute between the Contracting Parties concerning the interpretation or application of the Convention may be referred to the ICJ, but this provision does not confer jurisdiction on that court to review the decision of an ICSID arbitral tribunal (see History of the ICSID Convention, Vol II, 964).

2.28 In this context, commentators and practitioners frequently describe ICSID as an autonomous, delocalized, and ‘self-contained’ system.⁵⁹ No court or tribunal of the host State is empowered to review an ICSID award on the merits. In fact, no domestic or international court can invalidate or qualify an ICSID award in any respect. This is perhaps the most remarkable feature of the ICSID system. Unlike other international arbitration centres, which operate against a background of different national legal systems and domestic courts, ICSID is independent of any other legal framework and of the decisions of any other courts.⁶⁰ No other venue broadly available to foreign investors is of such truly ‘international’ nature.

⁵⁹ See Broches, ‘Observations on the Finality of ICSID Awards’, 322; History of the ICSID Convention, Vol II, 422, 424, 427; A Cohen Smutny, ‘Arbitration before the International Centre for Settlement of Investment Disputes’ (2004) 1(1) Transnational Dispute Management; G Delaume, ‘Sovereign Immunity and Transnational Arbitration’ in J Lew (ed), Contemporary Problems in International Arbitration (Dordrecht: Martinus Nijhoff, 1987), 34; L Reed, J Paulsson, and N Blackaby, Guide to ICSID Arbitration (The Hague: Kluwer Law International, 2004), ix and chap 5; G R Delaume, ‘International Centre for Settlement of Investment Disputes Arbitration and the Courts’ (1983) 77 American Journal of International Law 784, 784–5; A Redfern and M Hunter, Law and Practice of International Commercial Arbitration (London: Sweet & Maxwell, 1986), 33; P T Muchlinski, ‘Dispute Settlement Under the Washington Convention on the Settlement of Investment Disputes’ in W E Butler (ed), Control over Compliance with International Law (Dordrecht: Martinus Nijhoff, 1991), 189; E Baldwin et al, ‘Limits to Enforcement of ICSID Awards’ (2006) 23(1) Journal of International Arbitration 1, 3; C Schreuer et al, The ICSID Convention: A Commentary (Cambridge: Cambridge University Press, 2009), 1103; OECD, International Investment Perspectives—2006 Edition (Paris: OECD Publishing, 2006), 185; ICSID, ‘Background Paper’, 3. On an alternative concept of finality, see C Tams, ‘An Appealing Option? The Debate about an ICSID Appellate Structure’ (2006) 57 Essays in Transnational Economic Law 13–14. Awards rendered under the Additional Facility are, however, subject to any review or appeal provided by the law of the seat of the arbitration (see Arts 1, 19, and 20 of the ICSID Arbitration Rules (Additional Facility)).

⁶⁰ See Redfern, ‘ICSID—Losing its Appeal?’, 98; Schreuer, Commentary, 1103.

2.29 Articles 52 and 53 of the Convention ensure the finality and legal certainty of ICSID awards.⁶¹ Together with the limited grounds for annulment, the fact that only ICSID annulment committees are empowered to analyse ICSID awards for purposes of annulment is considered an important advantage of this venue, and constituted an advance forward for the protection of investments.⁶²

⁶¹ Article 53(1) provides: ‘The award shall be binding on the parties and shall not be subject to any appeal or to any other remedy except those provided for in this Convention. Each party shall abide by and comply with the terms of the award except to the extent that enforcement shall have been stayed pursuant to the relevant provisions of this Convention’.

⁶² See M B Feldman, ‘The Annulment Proceedings and the Finality of ICSID Arbitral Awards’ (1987) 2 ICSID Rev–FILJ 86–7; Paulsson, ‘ICSID’s Achievements and Prospects’, 387.

2.30 The finality of ICSID awards is thus an intrinsic advantage over other systems. The following Chapter addresses the background and consequences of the finality of ICSID awards as well as ICSID practice on this issue.

<?Page pageId="275"?>Appendix: Summary of ICSID Annulment Decisions

Case

Committee Members

Duration of Annulment Proceedings (approx)

Annulled?

Article 52(1)(b): manifest excess of powers

Article 52(1)(d); serious departure from a fundamental rule of procedure

Article 52(1)(e): failure to state reasons

Togo Electricité and GDF-Suez Energie Services v Togo (‘Togo Electricité’)

ICSID Case No ARB/06/7

Albert Jan Van den Berg (President), Franklin Berman, and Rolf Knieper

10 months

Registered: Nov 4, 2010

Decided: Sept 6, 2011

Application denied.

Helnan International Hotels A/S v Egypt (‘Helnan’)

ICSID Case No ARB/05/19

Stephen M Schwebel (President), Bola Ajibola, and Campbell McLachlan

1 year, 7 months

Registered: Nov 10, 2008

Decided: Jun 14, 2010

Partially annulled.

Paras 40–57, 73(1)—failure to apply proper law (as agreed by parties).

Tribunal decided to ‘annul the holding of the Arbitral Tribunal in paragraphs 148 and 162 of its Award which, while disclaiming a requirement of exhaustion of local remedies before ICSID arbitral

tribunal denied other grounds invoked.

Rumeli Telekom AS and Telsim Mobil Telekomunikasyon Hizmetleri AS v Kazakhstan (‘Rumeli’)

ICSID Case No ARB/05/16

Stephen M Schwebel (President), Campbell McLachlan, and Eduardo Silva Romero

1 year, 4 months

Registered: Nov 7, 2008

Decided: Mar 25, 2010

Application denied.

Malaysian Historical Salvors, SDN, BHD v Malaysia

ICSID Case No ARB/05/10

Stephen M Schwebel (President), Mohamed Shahabuddeen, and Peter Tomka

1 year, 7 months

Registered: Sept 17, 2007

Decided: Apr 16, 2009

Annulled award on jurisdicion. Dissenting opinion issued by Mohamed Shahabuddeen.

Paras 80–1— failure to exercise jurisdiction.

Sociedad Anónima Eduardo Vieira v Chile (‘Vieira’)

ICSID Case No ARB/04/7

Christer Söderlund (President), Piero Bernardini, and Eduardo Silva Romero

2 year, 11 months

Registered: Jan 24, 2008

Decided: Dec 10, 2010

Application denied.

Compagnie d’Exploitation du Chemin de Fer Transgabonais v Gabonese Republic

ICSID Case No ARB/04/5

Franklin Berman (President), Ahmed Sadek El-Kosheri, Rolf Knieper

1 year, 10 months

Registered: Jul 10, 2008

Decided: May 11, 2010

Duke Energy International Peru Investments No 1 Ltd v Peru (‘Duke’)

ICSID Case No ARB/03/28

Campbell McLachlan (President), Dominique Hascher, and Peter Tomka

2 years, 3 months

Registered: Dec 24, 2008

Decided: Mar 1, 2011

Application denied.

Fraport AG Frankfurt Airport Services Worldwide v Republic of the Philippines (‘Fraport’)

ICSID Case No ARB/03/25

Peter Tomka (President), Dominique Hascher, and Campbell McLachlan

2 years, 11 months

Registered: Jan 8, 2008

Decided: Dec 23, 2010

Annulled award of Aug 16, 2007.

Paras 218–47—right to be heard.

Continental Casualty Company v Argentine Republic (‘Continental Casualty’)

ICSID Case No ARB/03/9

Gavan Griffith (President), Bola Ajibola, and Christer Söderlund

2 years, 8 months

Registered: Jan 14, 2009

Decided: Sept 16, 2011

Application for annulment by Continental Casualty Company denied.

Application for partial annulment of the Argentine Republic denied.

MCI Power Group, LC, and New Turbine, Inc v Ecuador (‘MCI Power’)

ICSID Case No ARB/03/6

Dominique Hascher (President), Hans Danelius, and Peter Tomka

1 year, 10 months

Registered: Dec 06, 2007

Decided: Oct 19, 2009

Application denied.

Industria Nacional de Alimentos SA and Indalsa Perú SA (formerly Empresas Lucchetti SA and Lucchetti Perú SA) v Peru (‘Lucchetti’)

ICSID Case No ARB/03/4

Hans Danelius (President), Andrea Giardina, and Franklin Berman

2 years, 2 months

Registered: Jul 1, 2005

Decided: Sept 5, 2007

Application denied.

Sempra Energy International v Argentine Republic (‘Sempra’)

ICSID Case No ARB/02/16

Christer Söderlund (President), David A O Edward, and Andreas J Jacovides

2 years, 5 months

Registered: Jan 30, 2008

Decided: Jun 29, 2010

Annulled award of Sept 28, 2007.

Paras 159–222— failure to apply proper law (failure to apply Art XI of the US/Arg BIT).

CDC Group plc v Seychelles (‘CDC’)

ICSID Case No ARB/02/14

Charles N Brower (President), Michael Hwang, and David A R Williams

1 year, 2 months

Registered: Apr 30, 2004

Decided: Jun 29, 2005

Application denied.

Hussein Nuaman Soufraki v United Arab Emirates (‘Soufraki’)

ICSID Case No ARB/02/7

Florentino P Feliciano (President), Omar Nabulsi, and Brigitte Stern

2 years, 7 months

Registered: Nov 12, 2004

Decided: Jun 5, 2007

Application denied.

Azurix Corp v Argentine Republic (‘Azurix’)

ICSID Case No ARB/01/12

Gavan Griffith (President), Bola Ajibola, and Michael Hwang

2 years, 9 months

Registered: Dec 11, 2006

Decided: Sept 1, 2009

Application denied.

Repsol YPF Ecuador SA v Empresa Estatal Petróleos del Ecuador (‘Repsol’)

ICSID Case No ARB/01/10

Judd L Kessler (President), Piero Bernardini, and Gonzalo Biggs

2 years, 6 months

Registered: Jul 15, 2004

Decided: Jan 8, 2007

Application denied.

CMS Gas Transmission Company v Argentine Republic (‘CMS’)

ICSID Case No ARB/01/8

Gilbert Guillaume (President), Nabil Elaraby, and James R Crawford

2 years

Registered: Sept 27, 2005

Decided: Sept 25, 2007

Partially annulled.

Paras 89–97— absence of reasons.

MTD Equity Sdn Bhd and MTD Chile SA v Chile

ICSID Case No ARB/01/7

Gilbert Guillaume (President), James R Crawford, and Sara Ordoñez Noriega

2 years, 6 months

Registered: Sept 30, 2004

Decided: Mar 21, 2007

Application denied.

Enron Creditors Recovery Corporation (formerly Enron Corporation) and Ponderosa Assets, LP v Argentine Republic (‘Enron’)

ICSID Case No ARB/01/3

Gavan Griffith (President), Patrick L Robinson, and Per Tresselt

2 years, 4 months

Registered: Mar 7, 2008

Decided: Jul 30, 2010

Partially annulled.

Paras 355–95; 400–8—failure to apply proper law (failure to apply Art XI of the US/Arg BIT).

Consortium RFCC v Kingdom of Morocco

ICSID Case No ARB/00/6

Bernard Hanotiau (President), Arghyrios A Fatouros, and Franklin Berman

1 year, 9 months

Registered: Apr 30, 2004

Decided: Jan 18, 2006

Unpublished.

Patrick Mitchell v Democratic Republic of the Congo (‘Mitchell’)

ICSID Case No ARB/99/7

Antonias C Dimolitsa (President), Robert S M Dossou, and Andrea Giardina

2 years, 4 months

Registered: Jul 15, 2004

Decided: Nov 1, 2006

Annulled award of Feb 9, 2004.

Paras 42–48— excess of jurisdiction.

Paras 34–41 —absence of reasons.

Wena Hotels Limited v Egypt (‘Wena’)ICSID Case No ARB/98/4

Konstantinos D Kerameus (President), Andreas Bucher, and Francisco Orrego Vicuña

1 year, 1 month

Registered: Jan 24, 2001

Decided: Feb 5, 2002

Application denied.

Compañía de Aguas del Aconquija SA and Vivendi Universal SA v Argentine Republic (‘Vivendi I’) ICSID Case No ARB/97/3

L Yves Fortier (President), James R Crawford, and José Carlos Fernández Rozas

1 year, 4 months

Registered: Mar 23, 2001

Decided: Jul 3, 2002

Partially annulled.

Paras 86–8, 93–115—tribunal manifestly exceeded its powers by not examining claims against Tucumán authorities under the BIT.

Compañía de Aguas del Aconquija SA and Vivendi Universal SA v Argentine Republic (‘Vivendi II’)

ICSID Case No ARB/97/3

Ahmed Sadek El-Kosheri (President), Andreas J. Jacovides, and Jan Hendrik Dalhuisen

2 years, 8 months

Registered: Dec 19, 2007

Decided: Aug 10, 2010

Application denied.

Maritime International Nominees Establishment (MINE) v Guinea (‘MINE’)

ICSID Case No ARB/84/4

Sompong Sucharitkul (President), Aron Broches, and Kéba Mbaye

1 year, 9 months

Registered: Mar 30, 1988

Decided: Dec 22, 1989

Partially annulled (did not apply to counter-claims).

Paras 6.98–6.108 —contradictory reasons and failure to deal with questions.

Klöckner Industrie-Anlagen GmbH and others v United Republic of Cameroon and Société Camerounaise des Engrais (‘Klöckner I’)

ICSID Case No ARB/81/2

Pierre Lalive (President), Ahmed Sadek El-Kosheri, and Ignaz Seidl-Hohenveldern

1 year, 3 months

Registered: Feb 16, 1984

Decided: May 3, 1985

Annulled award of Oct 21, 1983.

Paras 127 et seq—absence of reasons, insufficient and inadequate reasons, failure to deal with questions.

Klöckner Industrie-Anlagen GmbH and others v United Republic of Cameroon and Société Camerounaise des Engrais (‘Klöckner II’)

ICSID Case No ARB/81/2

Sompong Sucharitkul (President), Andrea Giardina, and Kéba Mbaye

1 year, 10 months

Registered: Jul 1, 1988

Decided: May 17, 1990

Denied Cameroon’s application for annulment.

Denied Klöckner’s request for partial annulment.

Amco Asia Corporation and others v Indonesia (‘Amco I’)

ICSID Case No ARB/81/1

Ignaz Seidl-Hohenveldern (President), Florentino P Feliciano, and Andrea Giardina

1 year, 2 months

Registered: Mar 18, 1985

Decided: May 16, 1986

Partially annulled (did not apply to tribunal’s finding that the action of government officials was illegal).

Paras 89–98—failure to apply fundamental provisions of Indian law.

Paras 89–98— failure to state reasons for its Calculation of PT Amco’s investment.

Amco Asia Corporation and others v Indonesia (‘Amco II’)

ICSID Case No ARB/81/1

Sompong Sucharitkul (President), Arghyrios A Fatouros, and Dietrich Schindler

1 year, 10 months

Registered: Feb 20, 1991

Decided: Dec 17, 1992

Denied Indonesia’s application for annulment of award of Jun 5, 1990.

Denied Amco’s application for partial annulment of award of Jun 5, 1990.

Annulled supplemental award of Oct 17, 1990.

Paras 1.11–1.12, 9.10—right to be heard.

Note: This table does no include Articles 52(1)(a) and (c) because no Committee has annulled an award on these grounds yet.

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Zaiwalla, Sarosh, ‘Challenging Arbitral Awards: Finality Is Good But Justice is Better’ (2003) 20(2) Journal of International Arbitration 199. <?Page pageId="299"?>Index ad hoc committees see annulment committees Aguilar Alvarez, G breakdown of control mechanism 9.121 error of law 6.257 failure to give reasons 9.111 Alexandrov, Stanimir failure to state reasons threshold for application 9.80 rectification 11.94 serious breach of a fundamental rule of procedure 8.49 annulment see also annulment committees; annulment decisions; annulment procedure; grounds for annulment appeals de facto appeal 1.03, 1.04 distinguished 3.16–3.19, 3.20–3.67 replacement of annulment with appellate mechanism 14.12–14.24 cases division into three generations, of 3.28 codification of rules historical development, of 2.06 consent, to 11.75 correctness and finality of arbitral award issues, of 3.17, 3.20–3.67, 14.02 deferment, of 4.03 frequency, of 1.06 hair-trigger rule 4.14–4.24 ICSID Convention finality, and 1.02, 3.01–3.15 grounds under Article 52 2.24, 2.25 time limits under Article 52 2.26 proposals to modify background and reasons, for 14.01–14.10 conclusions 14.31–14.33 suggested alternatives 14.11–14.30 scope 1.07, 10.01 admissibility of new arguments and evidence 10.08–10.13 damages 10.14–10.44 factual findings 10.02–10.07 res judicata and resubmissions 10.45–10.62 annulment committees appeals acknowledgment of distinction with annulment 3.20–3.25 appellate courts, as 3.34 applicable law determination, of 11.56 arbitral award role to verify compliance with procedural fairness 3.14 committee members corruption, of 7.01, 7.05–7.10, 10.02 disqualification 11.37–11.51 constitution rules, on 11.32–11.36 costs allocation, of 11.68–11.72 counsel disqualification, of 11.37–11.51 counterclaims exclusion, of 11.57, 11.58 designation by ICSID 3.13 discretion 4.14–4.24 documents production 11.73 factual findings authority to decide, on 10.03–10.07 finality of ICSID award practical application of powers 3.26–3.67 functions 11.54–11.76 hair-trigger rule 4.14–4.24 ICSID Convention Article 52 provision, for 2.27 incidental and additional claims exclusion, of 11.57–11.62 jurisdiction of tribunal 11.54–11.55 inquiry de novo by committee 6.66, 6.67, 6.144, 6.145 partial annulment power to grant 11.63–11.67 powers 11.54–11.76 condition stay of enforcement 12.26–12.42 partial annulment 11.63–11.67 stay of enforcement 12.07 provisional measures exclusion, of 11.57, 11.59–11.62 role, of 3.65 site visits 11.73 annulment decisions enforcement generally 11.95 grounds of annulment authority to annul in cases of misclassification 11.87 ICSID practice 11.82–11.85 questions requirement to address every question 11.78–11.81 recognition and enforcement 11.95 requirements generally 11.77 requests for interpretation, supplementation and rectification 11.88–11.94 structure 11.86 annulment procedure ad hoc committees powers to decide, upon 11.74 application both parties, by 11.20 counterclaims 11.17 generally 11.02 partial annulment 11.11–11.19 registration of request 11.21–11.23 requirements 11.03–11.10 due process principles 8.04 duration of proceedings 11.53 incidental and additional claims, counterclaims, provisional measures exclusion, of 11.57–11.62 introduction 11.01 negligible departure and fundamental breach, distinguished 8.07 partial annulment application 11.11–11.19 tribunal power to grant 11.63–11.67 pleadings 11.52 requests for interpretation, supplementation and rectification 11.88–11.94 time limits 2.26, 11.52 waiver 11.24–11.31 appeals ICSID annulment, distinguished 3.16–3.19 proposed alternative to annulment, as 14.11–14.24 applicable law see also governing law determination, of 6.153–6.164, 11.56 ICSID practical application, of 6.185–6.305 serious departure from a fundamental rule of procedure, as 8.81–8.82 arbitral awards see also security to pay arbitral award ‘awards’ meaning, of 4.01 presumption in favour, of 4.04–4.13 binding character, of 3.05, 3.06, 3.07, 4.08, 4.09 enforcement generally 12.01 finality, of ‘correctness’ of award, and 3.09, 3.10, 3.11, 3.20–3.67 exceptions, to 2.04, 2.05 ICSID Convention, under 1.02, 2.29, 2.30, 3.01–3.15 historical development of concept 2.03 non-prevailing parties 3.03 res judicata, and 3.08, 3.09 significance, of 3.13 stay of enforcement pending annulment annulment committee powers 12.07 balancing of interests 12.28 circumstances leading, to 12.11–12.28 dilatory requests for annulment 12.26 effect, of 12.06 enforcement regime 12.27 exceptional nature, of 12.13, 12.14 factors affecting 12.17–12.28 generally 12.11–12.16 hardship to a party 12.21–12.23 historical development 12.02–12.05 ICSID practice 12.10–12.11 irreparable harm to ward debtor 12.25 prospect of prompt compliance 12.17–12.20 request for continuance or lifting, of 12.08 request to post security 12.29–12.71 risk of non-recovery 12.24 termination on annulment 12.09 arbitration see also international arbitration advantages, of generally 1.02 ‘correctness’ 3.09, 3.10, 3.11, 3.17 arbitration committees appellate judges acting, as 1.05 arbitrators acting as counsel 8.37–8.39 deliberations fundamental rule of procedure, as 8.26 disqualification, and 5.27–5.37 nationality 5.06, 5.07 partiality 8.50–8.55 qualities minimum personal and professional standards 5.03, 5.05 awards see arbitral awards Bjorklund, Andrea applicable law consistency of tribunal decision making, and 6.222 Bluntschli, Johann Kaspar annulment 2.05 due process principles breach, of 8.05 manifest excess of powers 6.06, 6.170 Born, Gary annulment waivers of rights, to 11.25 international arbitral awards annulment under domestic law 13.13 Broches, Aron 1962 Working Paper 2.22, 3.05 annulment decisions ICSID, impact on 3.36 arbitral awards stay of enforcement 12.05 costs 11.72 grounds of annulment failure to state reasons 9.167 improper constitution of tribunal 5.14, 5.17, 5.28, 5.29 manifest excess of powers 6.15, 6.17 serious departure from a fundamental rule of procedure 8.09 supplemental decisions requirement to request 9.191 Brower, Charles annulment decisions boundaries, of 3.39 Caron, David annulment decisions 3.39 ‘correctness’ and legitimacy of awards 31.7 finality of ICSID arbitral awards criticism, of 3.09 jurisdiction inquiry de novo by ad hoc committee 6.66 Castberg, Frederich excés de pouvoir 6.22 compensation see also damages ‘fair market value’ 10.32 interest discretion of tribunal 10.33 consent to arbitration legal obligations creation, of 3.06 corruption of tribunal member applicable standard 7.05–7.08 conclusions 7.10 ‘corruption’, meaning of 7.06 facts pertaining, to 10.02 ICSID practice 7.09 introduction 7.01 time limits 7.07 costs allocation, of 11.68–11.72 failure to state reasons 9.65, 10.42 manifest excess of powers 10.41 damages see also compensation annulment grounds, for 10.14 partial and total annulment 10.38 departure from a fundamental rule of procedure 10.34 valuation methodology 10.36 failure to apply law 10.15, 10.17 failure to state reasons 9.62–9.64, 9.66–9.68, 9.148, 10.18–10.19 absence of reasons 10.21 contradictory reasons 10.20 interest 10.27, 10.30 compound interest 10.35 discretion of tribunal 10.33 lost profits speculative calculation 10.17 quantum 10.25 discretion of tribunal 10.31 previous quantification not binding 10.28 de novo arbitrations prohibition, of 4.08 de Vattel, Emer finality of awards 2.04 manifest excess of power 6.06 Delaume, George failure to state reasons 9.169 domestic courts arbitral awards challenges, to 13.05–13.08 outcomes of challenges 13.18 risks of review 13.20, 13.21 Draft Rules for International Arbitral Procedure approval, of 2.06 error in judicando ground of annulment, as 6.184, 6.186 error in procedendo ground of annulment, as 8.06, 8.07 evidence admissibility new evidence before annulment committee 10.08–10.13 ex aequo et bono decisions 6.196, 6.245 excés de pouvoir doctrine, of 6.20–6.22 failure to state reasons applicable standard ‘implicit’ reasons 9.38–9.42 ‘necessary’ reasons 9.35–9.37 ‘non-contradictory’ reasons 9.26–9.33 ‘non-frivolous’ reasons 9.22–9.25 obiter dicta and ratio decidendi, distinguished 9.35–9.37 ‘sufficient’ reasons 9.14–9.19 ‘sufficiently pertinent’ reasons 9.61 ‘understandable’ decision 9.20–9.21 bare affirmation 9.103–9.104 coherence of reasoning, and 9.85–9.97 conclusion 9.206–9.207 contradictory reasons 9.43–9.53, 9.62–9.65, 9.98–9.102, 9.105–9.107, 9.124–9.126 failure of interpretation of contract 9.81–9.82 fraud failure to consider evidence, of 9.130–9.136 ICSID practice 9.43–9.160 introduction 9.01–9.02 manifest excess of powers, as 6.308–6.313 obligation to provide 9.03–9.06 precedent reliance on previous ICSID case 9.139–9.147 questions failure to address a question before tribunal 9.127–9.129 failure to address every question before tribunal 9.161–9.205 meaning, of 9.178–9.184 obligation to deal with directly 9.185–9.189 supplemental decisions requirement to request 9.190–9.196 threshold for application 9.80 umbrella clauses breach, of 9.108–9.123 Feldman, Mark supplemental decisions requirement to request 9.193 Fiore, Pascuale failure to state reasons 9.07 manifest excess of powers 6.06 Gaillard, Emmanuel applicable law 6.227 good faith obligation to act, in 3.05 governing law see also applicable law error of law manifest excess of powers, as 6.170–6.184 ‘simple’ error 6.177 failure to apply manifest excess of powers, as 6.146–6.153 partial application, of 6.165–6.169 manifest excess of powers, as 6.170–6.184 grounds for annulment see also individual grounds eg corruption of a tribunal member applicable standard corruption of a tribunal member 7.05–7.08 failure to state reasons 9.11–9.42 improper constitution of tribunal 5.19–5.26 manifest excess of powers 6.20–6.45 ‘manifest’ requirement 6.25–6.34 serious departure from a fundamental rule of procedure 8.81–8.82 ‘tenable’ standard 6.35–6.42 ‘two-step’ analysis 6.43–6.45 corruption of a tribunal member applicable standard 7.05–7.08 introduction 7.01 failure to state reasons conclusions 9.206–9.207 failure to address every question before tribunal 9.161–9.205 ICSID practice 9.43–9.160 introduction 9.01–9.02 obligation to provide 9.03–9.06 ICSID Convention Article 52 provisions 2.24, 2.25 in favorem validitatis sententiae principle, of 4.04, 4.06, 4.11, 4.13 improper constitution of tribunal applicable standard 5.19–5.26 chairman, disqualification, of 5.42–5.44 conclusion 5.53–5.54 constitution of ICSID tribunal 5.03–5.09 disqualification of arbitrators, and 5.27–5.37 drafting history 5.10–5.18 impartiality 5.39–5.41, 5.45–5.52 introduction 5.01–5.02 interpretation, of 4.04–4.13 legitmacy issues 3.17 manifest excess of powers applicable standard 6.20–6.45 assertion of claims on behalf of other investors 6.306–6.307 excés de pouvoir 6.20–6.22 failure to apply the proper law 6.146–6.305 failure to state reason 6.308–6.313 governing law see governing law introduction 6.01 jurisdictional matters see jurisdiction ‘manifest’, meaning of 6.25, 6.26 tribunal powers 6.02–6.04 serious departure from a fundamental rule of procedure applicable standard 8.10–8.23 conclusion 8.88 failure to state reasons, and 8.85–8.87 introduction 8.01–8.03 manifest excess of powers, and 8.85–8.87 rules of procedure 8.04 guarantees see security Hague Peace Conference 1899 arbitration awards finality, of 2.07 hair-trigger rule 4.14–4.24 ICSID Background Paper on Annulment annulment, requirements 11.04 applicable law failure to apply 6.147 grounds of annulment 2.16, 3.41 failure to state reasons 9.10 improper constitution of a tribunal 5.22 serious breach of a fundamental rule of procedure 8.10 finality of ICSID awards 3.08, 4.21 jurisdiction failure to exercise 6.48 principles 14.30 res judicata 10.51 stay of enforcement of ICSID awards 12.01 ICSID tribunals see also arbitrators constitution, of 5.03–5.09 facts pertaining, to 10.02 impartiality 5.39–5.41 jurisdiction see jurisdiction obligation to provide reasons 9.03–9.06 powers 6.02–6.04 procedure for constitution, of 5.04 scope of authority 6.03 in favorem validitatis sententiae principle, of 4.04, 4.06, 4.11 Institut de Droit Internationale control mechanisms for international arbitration 2.10, 2.17 manifest excess of power 6.07, 6.08 international arbitration see also arbitration control mechanisms 2.01 finality of awards, tension between 2.02, 3.04 historical development 2.03–2.20 ICSID review mechanisms, compared 13.01–13.21 International Centre for Settlement of Investment Disputes (ICSID) alternatives, to 13.01 annulment as control mechanism boundaries, of 3.20–3.67 attractions to users 1.02, 13.02 autonomous, delocalized and ‘self-contained’ system, as 2.28 consistency of decisions 14.03–14.05 non-ICSID arbitration distinguished, generally 13.03 outcome of challenge to arbitral awards 13.18 review mechanisms, compared 13.05–13.09 scope of review, compared 13.10–13.14 seat of arbitration 13.14–13.15 stay of enforcement 13.17 waiver 13.16 proposals to modify appellate mechanism 14.11–14.24 binding precedent 14.29 consultation mechanism 14.26 extension to grounds of review 14.25 parties comment on draft award 14.28 public interest considerations 14.06 International Centre for Settlement of Investment Disputes Convention (ICSID Convention) 1963 Preliminary Draft 2.23, 9.09 Article 25 (jurisdiction) requirements, for 6.49 Article 52 (annulment) ad hoc committee 2.27 drafting history 2.21–2.30 grounds of annulment 2.24 interpretation 4.15, 4.16 time limits 2.26 Article 52(1)(a) (improper constitution of tribunal) drafting history 5.10–5.18 ICSID practical application, of 5.38–5.52 Article 52(1)(b) (manifest excess of powers) drafting history 6.05–6.19 ‘manifest’, meaning of 6.25, 6.26 Article 52(1)(c) (corruption) drafting history 7.02–7.04 Article 52(1)(d) (serious departure from rule of procedure) drafting history 8.05–8.09 Article 52(1)(e) drafting history 9.07–9.10 Article 53 (finality of award) drafting history 3.05–3.07 consent, to legal obligations, and 3.06 International Court of Justice (ICJ) arbitral awards stay of execution 12.03–12.04 appeals annulment, distinguished 3.18 control mechanisms for international arbitration 2.17, 2.27 international law failure to state reasons 9.105 function of principles 6.158–6.163, 6.159, 6.160 International Law Commission (ILC) Draft Rules on Arbitral Procedure 2.16, 2.23 control mechanisms for international arbitration 2.12–2.20 excess of powers 6.09, 6.10, 6.11, 6.170 Model Rules 2.16, 2.19, 2.20 error in procedendo 8.06, 8.07 failure to state reasons 9.08 investment arbitration see arbitration; international arbitration; International Centre for Settlement of Investment Disputes (ICSID) investments meaning, of 6.78 Salini doctrine 6.80 jurisdiction decisions, on awards, as 4.01, 4.02 failure to state reasons 9.85, 9.106, 9.107, 9.130, 9.154 ius standi 9.139 manifest excess of powers de novo assessment of tribunal’s jurisdiction 6.53–6.67, 6.144, 6.145 excess of jurisdiction 6.48, 6.87–6.145 failure to exercise jurisdiction 6.48, 6.68–6.86 introduction 6.46–6.52 requirements 6.49 serious departure from fundamental rule of procedure 8.48–8.49 Kaufman-Kohler, Gabrielle applicable law 6.229 interpretative rulings 14.26 Lamm, Carolyn partial annulment 10.52, 10.59 Lalive, Pierre annulment decisions impact on ICSID 3.35 League of Nations control mechanisms for international arbitration 2.11, 12.03 excess of jurisdiction 6.08 locus regit processum principle, of 13.06 manifest-disregard doctrine 6.13 manifest excess of powers applicable standard introduction 6.20–6.24 ‘manifest’ requirement 6.25–6.34 ‘tenable’ standard 6.35–6.42 ‘two-step’ analysis 6.43–6.45 assertion of claims on behalf of other investors 6.306–6.307 conclusion 6.314 excés de pouvoir doctrine, of 6.20–6.22 failure to apply the proper law applicable law, determination of 6.153–6.164 generally 6.146–6.152 failure to state reasons 6.308–6.313 generally 6.146–6.152 ICSID tribunals powers, scope of 6.02 Institut de Droit Internationale 6.07, 6.08 introduction 6.01 jurisdiction see jurisdiction nationality arbitrators, of 5.06 ‘effective’ nationality 5.07 failure to state reasons, and 9.103–9.104 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards excess of powers 6.12 security to pay arbitral award 12.29 stay of enforcement 13.17 obiter dicta ratio decidendi, distinguished 9.35–9.37 pacta sunt servanda principle, of 3.01, 3.03, 3.06 parties non-prevailing parties arbitral awards, compliance with 3.03 Paulsson, Jan annulment decisions impact on ICSID 3.37, 3.39 breakdown of control mechanism 6.94, 9.121 manifest excess of powers 6.25 Permanent Court of International Justice (PCIJ) control mechanisms for international arbitration 2.09, 2.10, 2.11 Pinsolle, Philippe jurisdiction manifest excess of powers 6.54 Projet de réglement pour la procédure arbitrale internationale see Draft Rules for International Arbitral Procedure preliminary decisions awards, as 4.01–4.03 Rambaud, Patrick ad hoc committees discretion 4.20 ratio decidendi obiter dicta, distinguished 9.35–9.37 reasons see failure to state reasons Redfern, Alan ad hoc committees 3.30 applicable law 6.192 failure to state reasons 9.168, 9.179 Reisman, Michael breakdown of control mechanism 3.31, 3.36, 9.121, 11.82 finality of arbitral awards 3.10 grounds of annulment applicable law 6.193, 6.204 error of law 6.257 excés de pouvoir 6.20 failure to give reasons 9.111, 9.166, 9.168 formalistic approach, to 4.06, 4.07 serious departure form rule of procedure 8.28 ‘tenable’ standard 6.37, 6.39 hair-trigger rule 4.17 res judicata resubmitted cases 10.59, 10.60 res judicata annulment, and 10.45–10.50 arbitral awards, and 2.02, 2.12, 2.13, 3.01, 3.02, 3.03, 3.07 resubmitted cases res judicata and committee’s observations 10.57–10.62 res judicata and first decision 10.51–10.56 Salini doctrine investments definition, of 6.80 Schreuer, Christoph annulment decisions control mechanism, and 3.46, 3.52, 3.55 division into generations, of 3.28 misclassification of category 11.87 appeal, distinguished 6.259 control mechanisms for international arbitration justice, requirements, of 3.12 diplomatic protection pending ICSID proceedings 11.76 grounds for annulment improper constitution of tribunal 5.30, 5.32, 5.37 manifest excess of powers 6.26, 6.43, 6.93, 6.165, 6.183, 6.203, 6.228, 6.268 failure to state reasons 9.11, 9.90, 10.17 preliminary decisions 4.03 stay of enforcement of arbitral award 12.15 Schwartz, Eric applicable law 6.231, 6.233 finality of ICSID awards 3.11, 3.39 security to pay arbitral award annulment committees power to condition stay of enforcement 12.36–12.42 ICSID practice absence of conditions 12.58–12.71 bank guarantees 12.43 provision of security or assurance in writing 12.44–12.57 stay of enforcement as condition, of 12.29–12.35 serious departure from a fundamental rule of procedure applicable law failure to apply 8.81–8.82 applicable standard departure requirements 8.17 fundamental requirements 8.18–8.22 serious requirements 8.10–8.16 timing 8.23 arbitrators acting as counsel 8.37–8.39 failure to deliberate 8.25–8.31 partiality 8.50–8.55 conclusion 8.88 evidence admission of witness statement 8.67–8.69 production, denial of 8.59–8.64 unbalanced treatment, of 8.40–8.42 factual issues 8.43–8.47, 8.57–8.58, 8.65 failure to consider one question before tribunal 8.83–8.84 failure to state reasons, and 8.85–8.87 ICSID practice 8.24–8.84 introduction 8.01–8.03 jurisdictional phase decisions on merits, during 8.73–8.74 locus standi 8.56 manifest excess of powers, and 8.85–8.87 refusal to answer all questions before tribunal 8.32–8.36 right to be heard breach, of 8.24, 8.48–8.49, 8.66, 8.75–8.80 rules of procedure 8.04 due process principles 8.04 tribunals improper constitution 8.70–8.72 Shihata, Ibrahim ICSID Secretary General 3.33 tribunals see ICSID tribunals UNCITRAL Model Law on International arbitration excess of powers 6.12 grounds to set aside non-ICSID arbitral awards 13.12–13.13 security to pay arbitral award 12.30 United States manifest-disregard doctrine 6.13 Van Houtte annulment limits to remedy 9.122 Verdross, Alfred manifest excess of powers 6.150 waiver 11.24–11.31, 13.16 World Bank General Counsel Broches, Aron 2.22