Commerce Group Corp. and San Sebastian Gold Mines, Inc. v. The Republic of El Salvador, ICSID Case No. ARB/09/17, El Salvador's Counter-Memorial in Opposition to Claimants' Application for Annulment (October 19, 2012)
1. Annulment is an exceptional recourse under the ICSID Convention. It is one of the rare exceptions to the fundamental principle of finality of ICSID Awards enunciated in Article 53 of the Convention. Consistent with the principle of finality, applications for annulment should be reserved for extraordinary situations where there is a legitimate and well-founded concern that the integrity of the proceedings has been violated because the most vital procedural safeguards required by the Convention—listed as grounds for annulment in Article 52—have not been followed in the tribunal's award.
2. Clearly, annulment is not an appeal, and the ICSID system is undermined by the misuse of the annulment process. The annulment mechanism does not allow for the examination of the correctness of the decision, and it does not afford a losing party a second opportunity to argue its case to try to overturn an award it does not like. Yet that is precisely what Applicants are attempting to do with their application for annulment: they are impermissibly attempting to use the annulment mechanism to appeal an Award that does not suit their purposes. They are asking the Committee to assess the correctness of the Tribunal's holdings and overturn the Award based on arguments that challenge the substance of the Tribunal's Award. Applicants go even further and seek to relitigate their case and in the process distort the Tribunal's findings and ignore the record the Tribunal had before it. It is telling that Applicants provide no analysis of the nature of annulment or the limited grounds set forth in Article 52.