At the 2016 Annual Meeting of the Administrative Council, the International Centre for Settlement of Investment Disputes ("ICSID") launched an amendment process on its' rules and regulations ("ICSID Rules and Regulations"). This has been the fourth amendment process since 1984, 2003 and 20061.
As per Article 6 of the ICSID Convention, the amendments will only be effective upon the approval of two-thirds of the contracting states2. Hence, ICSID invited contracting states and the public3 to provide their amendment suggestions on topics worthy of consideration, which will be used as background papers throughout the process.
Targets of the Amendment on ICSID Rules and Regulations
The amendments focus on the targets of modernization of the rules, time and cost efficiency, increase in consistency during procedures and availability of the decisions4.
Modernization of the Rules
One of the major tasks of the amendments is modernization of the ICSID Rules and Regulations in order to incorporate the common outcomes of case law, and to reflect the common and modern practice of the arbitrators in the rules.
Streamlining the appointment of arbitrators, providing more elaborated codes of conduct on the qualifications of the arbitrators and new procedures in relation to the challenge of arbitrators may be discussed. Under the subject of challenge of arbitrators, the capacity of the arbitrators to resign prior to the constitution of the tribunal, automatic stay of proceedings, and award of costs stemming from illegitimate challenges are likely to be considered.
Time and Cost Efficiency
In order to accelerate the arbitration process the closure of the procedures, release of the awards and dissents, as well as annulment procedures may be amended to be bound by stricter time frames. In case where parties fail to pay the established advances, the time for discontinuance of a case may be expedited.
In terms of cost efficiency, explicit rules governing the authority of the tribunals to order security of costs and stay of enforcement of awards by an ad hoc committee may be provided. In parallel to this, disclosure of third-party funders may be discussed. Accordingly, more transparency on the basis of allocation of costs may be brought, and parties may have a clearer view on the possible outcomes of the process.
Increasing Consistency and Availability
Since consolidation is available under the rules through the consent of the parties, elaboration of the consolidation of cases is considered to cause significant increase in consistency. Moreover, it is considered to reduce costs that are incurred due to inconsistency.
Apart from the awards, publication of decisions and orders may now be considered. Since decisions and orders contain significant procedural and substantive conclusions, they are likely to increase consistency and their availability.
Apart from its benefits foreseen in terms of cost-efficiency and transparency as stated, above, the disclosure of third-party funding might be valuable with respect to conflict-checking purposes under the target of consistency.
Since the ICSID has launched its fourth amendment process on the ICSID Rules and Regulations, significant reformations are to be made on the rules targeting on modernization, time and cost-efficiency, increase in consistency, and availability of decisions.
Currently, the amendment proposals of the contracting states and the public are under the consideration of the ICSID, which will provide background papers detailing requests and structure. Following the amendments, the rules will be one step closer to adapting to the current needs of the modern-world investment disputes.
1 For further details on the previous amendments on the ICSID Rules and Regulations, please see: https://icsid.worldbank.org/en/Pages/resources/ICSID-Convention,-Regulations-and-Rules.aspx.
2 ICSID Convention,Regulations and Rules, ICSID/15 April 2006, https://icsid.worldbank.org/en/Documents/icsiddocs/ICSID%20Convention%20English.pdf.
3 For the ICSID Report on the Public Comments to Amendment of ICSID Rules and Regulations: https://icsid.worldbank.org/en/Documents/about/Public%20Comments%20to%20Amendment%20to%20ICSID%20Rules%20and%20Regulations.pdf.
4 For further details on the amendment proposals, please see: https://icsid.worldbank.org/en/Documents/about/ICSID%20Rules%20Amendment%20Process-ENG.pdf.