Originally from Investment Treaty Arbitration and International Law - Volume 2

It has long been an accepted proposition in the investment arbitration community that, from a policy perspective, the proper scope of review for ICSID awards is primarily determined by two opposing values: finality on the one hand, and correctness on the other. In general, those who see finality as the greater value argue for strict limitations on an annulment committee’s power of review, while those who favor correctness tend to prefer a wider scope.1 In recent years, the debate surrounding possible procedural modifications of the ICSID annulment mechanism, including discussions regarding a potential appeals facility, has largely adopted a similar dichotomy.2

Unfortunately, as Part I of this paper demonstrates, the closer one looks at both “finality” and “correctness,” the more apparent it becomes that this discourse does not provide an adequate paradigm for analyzing the scope of annulment review. As a descriptive matter, it fails to capture the complexity of factors bearing on annulment committee decisions, and, as a prescriptive matter, it fails to present a workable framework for evaluating those decisions. Part II of the paper suggests that ICSID annulment jurisprudence might instead be analyzed as dialectic between many pairs of competing “maxims.” These maxims are adopted or rejected not because of any inherent correctness or incorectness, but rather based on the ex ante predispositions of the arbitrators, sometimes affected by the factual circumstances of a given case, and the framing of arguments by legal counsel. To illustrate the application of this analysis, Part III attempts to identify some o fthe more obvious maxims and counter-maxims and evaluate the extent to which annulment decisions and scholarly commentaries have adopted them in their reasoning.