September 23, 2011 World Bank Annual Meetings International Law Institute CSO Forum ICSID Arbitration Paul-Jean Le Cannu Counsel - ICSID

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


4

ICSID Membership – 147 Members


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


6

ICSID’s Role

Neutral Institution ICSID does not decide disputes;

The Tribunal does ICSID provides administrative

assistance throughout the arbitral proceedings


7

Steps in Process


8

Number of Cases Registered by Calendar Year under the ICSID

Convention and Additional Facility Rules


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


10

State Parties in ICSID Cases registered in FY2011


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%


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


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


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.


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%


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.


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

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OUTCOMES – Annulment II

Awards Rendered and Outcomes in Annulment Proceedings under the ICSID Convention, by Decade:


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


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


22

ICSID

International Centre for Settlementof Investment Disputes

1818 H Street Washington, D.C. 20433

U.S.A

Documents

September 23, 2011 World Bank Annual Meetings International Law Institute CSO Forum ICSID Arbitration Paul-Jean Le Cannu Counsel - ICSID