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September 23, 2011
World Bank Annual Meetings International Law Institute
CSO Forum
ICSID Arbitration
Paul-Jean Le CannuCounsel - ICSID
2
ICSID IBRD IDA IFC MIGAInternational Centre
for Settlement of Investment Disputes
MISSION:
Provides facilities for conciliation and arbitration of international investment disputes
International Bank for Reconstruction and Development
MISSION:
Lends funds to governments of middle and low-income countries
International Development Association
MISSION:
Provides interest-free loans and grants to governments of poorest countries
International Financial Corporation
MISSION:
Provides loans, equity and technical assistance to stimulate private sector investment in developing countries
Multilateral Investment
Guarantee Agency
MISSION:
Guarantees for investors in developing countries against non-commercial risk
The World Bank Group
© 2011 by International Centre for Settlement of Investment Disputes. Content may be reproduced for educational use with acknowledgement.
3
Purpose of ICSID
Intent is to depoliticize disputes by offering a neutral international facility to resolve legal disputes between foreign investors and host States
In turn, this is designed to enhance investor confidence and contribute to increased international investment
© 2011 by International Centre for Settlement of Investment Disputes. Content may be reproduced for educational use with acknowledgement.
4
ICSID Membership – 147 Members
© 2011 by International Centre for Settlement of Investment Disputes. Content may be reproduced for educational use with acknowledgement.
5
ICSID Structure
One representative of each Contracting State
One vote per State Chair: President of the World
Bank (no vote)
FUNCTIONS
Adopt ICSID rules on financing, arbitration, and conciliation
Adopt annual budget Determine conditions of service
of Secretary-General and Deputy Secretary-General
Secretary-General Staff of about 40
FUNCTIONS
Support Hearing Process
Training and Publications
ADMINISTRATIVE COUNCIL
SECRETARIAT
© 2011 by International Centre for Settlement of Investment Disputes. Content may be reproduced for educational use with acknowledgement.
6
ICSID’s Role
Neutral Institution ICSID does not decide disputes;
The Tribunal does ICSID provides administrative
assistance throughout the arbitral proceedings
© 2011 by International Centre for Settlement of Investment Disputes. Content may be reproduced for educational use with acknowledgement.
7
Steps in Process
© 2011 by International Centre for Settlement of Investment Disputes. Content may be reproduced for educational use with acknowledgement.
8
Number of Cases Registered by Calendar Year under the ICSID
Convention and Additional Facility Rules
© 2011 by International Centre for Settlement of Investment Disputes. Content may be reproduced for educational use with acknowledgement.
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
up to
Sep
t 20,
201
1
0
5
10
15
20
25
30
35
40
14
1 2 1 2 1 24
14
1 2 1 2 3 3
8 8 8 9
14
18
30
2124
21
32
2023
25 24
11 1
1
1
1
1
2 3 23
1
6
2
2
4
1
2
1 3
ICSID Convention Arbitration Cases
ICSID Convention Conciliation Cases
ICSID Additional Facility Arbitration Cases
9
Geographic Distribution of All ICSID Cases by State Party Involved
South America30%
Central America & the Caribbean7%
North America (Canada, Mexico & U.S.)
5%
Eastern Europe & Central Asia22%
Western Europe1%
Sub-Saharan Africa17%
Middle East & North Africa10%South & East Asia & the Pacific
9%
The classification of the geographic regions above is based on the World Bank’s regional system, available at http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/0,,pagePK:180619~theSitePK:136917,00.html, and also includes World Bank donor countries
© 2011 by International Centre for Settlement of Investment Disputes. Content may be reproduced for educational use with acknowledgement.
10
State Parties in ICSID Cases registered in FY2011
© 2011 by International Centre for Settlement of Investment Disputes. Content may be reproduced for educational use with acknowledgement.
11
Investors from developing States
Cases involving investors from developing countries represented around 25% of newly registered cases in FY 2011
Similar percentage in FY 2010 (around 25%)
Significantly higher than FY 2008 and 2009
Capital-importing countries have become exporters of capital
Increased number of South-South BITs © 2011 by International Centre for Settlement of Investment Disputes. Content may be reproduced for educational use with acknowledgement.
12
Basis of Consent Invoked to Establish ICSID Jurisdiction in Registered ICSID Cases
Treaty of Amity and Cooperation in Southeast Asia (ASEAN)
1%
Bilateral Investment Treaty (BIT)63%
Dominican Republic-United States-Central America Free Trade
Agreement (DR-CAFTA)1%
Investment Contract between the Investor and the Host-State
21%
Investment Law of the Host-State6%
North American Free Trade Agreement (NAFTA)
4%
Energy Charter Treaty (ECT)4%
© 2011 by International Centre for Settlement of Investment Disputes. Content may be reproduced for educational use with acknowledgement.
13
Arbitrators, Conciliators and ad hoc Committee Members Appointed in ICSID Cases – Distribution of Appointments by Geographic Region
North America (Canada, Mexico & U.S.)
23%
South America10%
Central America & the Caribbean
2%
Middle East & North Africa
5%
Sub-Saharan Africa2%
South & East Asia & the Pacific
9%Eastern Europe & Central Asia
2%
Western Europe47%
The classification of the geographic regions above is based on the World Bank’s regional system, available at http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/0,,pagePK:180619~theSitePK:136917,00.html, and also includes World Bank donor countries
© 2011 by International Centre for Settlement of Investment Disputes. Content may be reproduced for educational use with acknowledgement.
14
French
Canadian
U.S.
German
Argentine
British
Chilean
New Zealand
Spanish
Australian
Swiss
Belgian
Colombian
Malaysian
Mexican
Bangladeshi
British/French
Colombian/French
Costa Rican
Dutch
Egyptian
Italian
Malawian
Austrian
Bulgarian
Finnish
Indian
Iranian/French
Slovenian
Somali
0 2 4 6 8 10 12 14 16 18
16
12
10
8
7
7
7
7
6
4
4
3
3
3
3
2
2
2
2
2
2
2
2
1
1
1
1
1
1
1
Number of Appointments
Nati
on
ali
ty o
f A
pp
oin
tee
Appointments by nationality in ICSID Cases in FY 2011
© 2011 by International Centre for Settlement of Investment Disputes. Content may be reproduced for educational use with acknowledgement.
15
Distribution of Party and ICSID Appointments by geographic region
North America (Canada, Mexico
& U.S.)
South America Central America & the Caribbean
Middle East & North Africa
Sub-Saharan Africa
South & East Asia &
the Pacific
Eastern Europe & Central Asia
Western Europe0
50
100
150
200
250
300
350
400
450
39 34
1022
12
43
9
162
226
80
14
39
14
59
10
390
Appointments by ICSIDAppointments by the Parties (or Party-appointed Arbitrators)
The geographical classification is based on the World Bank’s regions as set forth at http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/0,,pagePK:180619~theSitePK:136917,00.html, and also includes World Bank donor countries.
© 2011 by International Centre for Settlement of Investment Disputes. Content may be reproduced for educational use with acknowledgement.
16
OUTCOMES – Original ProceedingsArbitration Proceedings under the ICSID Convention and Additional Facility Rules
Dispute de-cided by Tribunal
61%
Dispute settled or proceeding otherwise dis-
continued39%
© 2011 by International Centre for Settlement of Investment Disputes. Content may be reproduced for educational use with acknowledgement.
17
OUTCOMES – Original ProceedingsDisputes Decided by Arbitral Tribunals under the ICSID Convention and Additional Facility
Rules
Award deciding that the claims are manifestly without legal
merit1%*
Award declining jurisdiction
22%
Award dismiss-ing all claims
31%
Award upholding claims in part or in full
46%*Pursuant to ICSID Arbitration Rule 41(5) and Article 45(6) of the Arbitration (Additional Facility) Rules, as adopted by the ICSID Administrative Council in 2006, a party may at an early stage of the proceeding file an objection that a claim is manifestly without merit. If the Tribunal decides that the claims are manifestly without legal merit, it shall render an award to that effect.
© 2011 by International Centre for Settlement of Investment Disputes. Content may be reproduced for educational use with acknowledgement.
18
OUTCOMES - Annulment I
Annulment procedure is not an appeal procedure Limited list of five grounds:
Tribunal was not properly constituted; Tribunal manifestly exceeded its powers; Corruption on the part of a member of the Tribunal; A serious departure from a fundamental rule of
procedure; or Award has failed to state the reasons on which it is
based. Request the invalidation (not the modification) of
the Award
19
OUTCOMES – Annulment II
Awards Rendered and Outcomes in Annulment Proceedings under the ICSID Convention, by Decade:
© 2011 by International Centre for Settlement of Investment Disputes. Content may be reproduced for educational use with acknowledgement.
1971-1980 1981-1990 1991-2000 2001-2010 2011 -
0
20
40
60
80
100
120
49
18
96
12
0 0 15 3
0 1 1
13
203
0
8
0
Number of Convention awards rendered Number of annulment proceedings discontinued
Number of decisions rejecting the application for annulment Number of decisions annulling the award in part or in full
20
OUTCOMES - Annulment III
320 Convention arbitration cases registered
139 Convention awards rendered
47 annulment proceedings registered
18 decisions rejecting the application
9 proceedings discontinued
6 awards annulled in full
5 awards annulled in part
© 2011 by International Centre for Settlement of Investment Disputes. Content may be reproduced for educational use with acknowledgement.
21
Transparency
2006 Amendments to the ICSID Arbitration Rules Open hearings Non-disputing parties’ submissions (Amicus) Publication of excerpts of legal reasoning
ICSID Website Objective: furthering awareness and
development of international investment law Benefits for States in terms of program and
BIT design
© 2011 by International Centre for Settlement of Investment Disputes. Content may be reproduced for educational use with acknowledgement.
22
ICSID
International Centre for Settlementof Investment Disputes
1818 H Street Washington, D.C. 20433
U.S.A
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