Appeal versus Annulment: Is the ICSID Annulment Process Working or Is It Now Time for an Appellate Mechanism? - Chapter 12 - Investment Treaty Arbitration and International Law - Volume 5
PDF from "Investment Treaty Arbitration and International Law - Volume 5"
Claire Stockford , Associate, Crowell & Moring LLP
Originally from Investment Treaty Arbitration and International Law - Volume 5
The International Centre for Settlement of Investment Disputes ("ICSID") has been hearing cases for almost 40 years.1 Over this period, ICSID has registered 331 cases under the ICSID Convention and Additional Facility Rules.2 Whilst some of these cases have been withdrawn or settled after registration, most have resulted in a final award being rendered by an ICSID tribunal.3 There has been no appeal from any of these decisions. In this chapter, I argue that the time has come for an appeal mechanism to be introduced at ICSID.
The disputes heard by ICSID are major investment disputes. News of these disputes and how they are resolved influences not only the parties to the dispute, but other current and prospective investors. The dispute resolution possibilities that exist through ICSID are an important mechanism for supporting the international investment that is vital to global trade in general and to the development of developing countries in particular. As the Report of the Executive Directors on the Convention states, the purpose of the ICSID Convention is, among other things, to create "an atmosphere of mutual confidence [thereby] stimulating a larger flow of private international capital into those countries which wish to attract it".4 The dispute resolution facilities available through ICSID are a key support mechanism for achieving that objective. In short, investment cases are simply too important on a number of levels for there to be no way to review the substantive correctness of an award on the occasions that one or more of the parties believes it to be wrong.
The question of whether an appeal mechanism should be put in place at ICSID has arisen a number of times over the years that ICSID has been operating. Some recent awards, which have been considered by a number of commentators to have been "wrong", together with some annulment committees moving their standards of review closer to an appeal standard, without having any mandate to do so, means that the time has now come to revisit the question. If an appeal standard is to be applied, it is preferable that it should happen as a result of a well-considered and debated formal rule change, rather than as an organic process led by some annulment tribunals applying something close to an appeal standard, while others do not do so, leading to inconsistency and the potential for injustice.