THE BASICS OF ICSID ARBITRAL PROCEEDINGS – WHAT IN-HOUSE COUNSEL SHOULD KNOW
The last decade has witnessed a trend of investors increasingly choosing to bring their investment claims against foreign States under the Convention on the Settlement of Investment Disputes Between States and Nationals of other States (the ‘ICSID Convention’). By way of example: between 1972 and 1990, there were 26 cases registered at the International Centre for Settlement of Investment Disputes (the ‘Centre’); between 1990 and 1999, 43 new cases were registered; and between 2000 and 2012, 350 new cases were registered.
In relation to arbitral proceedings brought under the ICSID Convention, this article briefly sets out some of the main features of ICSID arbitration proceedings and commonly asked questions.
Background to the ICSID Convention
The ICSID Convention is a multilateral treaty, drafted for the purpose of protecting international investment, which entered into force on 14 October 1966. There are currently 146 States in which the ICSID Convention is in force. Notable exceptions include the Russian Federation and Canada (both States have signed but not ratified the Convention).
In addition to the ICSID Convention, there are various rules which govern the Centre’s functions and ICSID arbitral proceedings, for example: (i) the institutional rules of the Centre are the ICSID Rules of Procedure for Conciliation and Arbitration Proceedings; and (ii) the arbitration procedure for claims under the ICSID Convention is governed by the ICSID Rules of Procedure for Arbitration Proceedings.
What kind of disputes can be brought under the ICSID Convention?
A claim can only be brought under the ICSID Convention, and registered at the Centre, if the State party and the State of the investor party have both provided consent to arbitrate under the ICSID Convention.
Jul-Sep 2013 issue
Skadden, Arps, Slate, Meagher & Flom (UK) LLP