A Comparative Analysis of the ICSID Annulment Grounds - WAMR 2006 Vol. 17, No. 10

Albena P. Petrova, 2005-2006 Fellow at the Institute of International Economic Law, Washington, D.C.; LL.M., Georgetown University Law Center; JD, American University Washington College of Law; MA, Georgetown University School of Foreign Service; AB, Mount Holyoke College.

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Originally from: World Arbitration and Mediation Report (WAMR)

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Perspectives

A Comparative Analysis of the ICSID Annulment Grounds

By Albena P. Petrova *

Introduction

The International Center for Settlement of Investment Disputes (“ICSID”) has

only rendered seven annulment decisions during a period of thirty-eight years, which

remains a rather insignificant figure compared to its rising volume of registered cases.

[1] Since June 2005, ICSID has issued two new annulment decisions, and a total of six

annulment cases are pending. [2] As a result, the historic low number of annulment cases

could double.

The first request for annulment came in 1984, eighteen years after the

International Convention on the Settlement of Investment Disputes between States and

Nationals of Other States (the “Washington Convention”) [3] entered into force.

Between 1983 and 1993, three arbitral awards were annulled: Klockner I [4] (1983),

Amco I [5] (1984), and Mine [6] (1988). The ad hoc committees rejected requests for

annulment in Klockner II [7] (1990) and Amco II [8] (1992), and both decisions have

remained unpublished. No annulment decisions were rendered between 1993 and 2001.

In 2002, two annulment decisions emerged: Wena [9] and Vivendi. [10]

Since 2004, ICSID has witnessed a rise in annulment applications. Between July

2004 and September 2005, six applications for annulment have been submitted; [11] all

of those cases are pending. Within the last ten months, ad hoc committees have issued

two annulment decisions in CDC Group [12] and Consortium R.F.C.C. [13] The

decision in CDC Group is the latest published annulment case.

In view of the increasing number of pending annulment cases, concerns arise

about whether the annulment mechanism would continue to function successfully. This

article compares the grounds for annulment under the Washington Convention with the

grounds for setting aside under the United Nations Commission on International Trade

Law (“UNCITRAL”) Model Law on International Commercial Arbitration

(“UNCITRAL Model Law”) [14] and the grounds for non-enforcement and recognition

under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards

(the “New York Convention”). [15] Part I presents the grounds for challenging an

arbitral award under the Washington Convention, the UNCITRAL Model Law, and the

New York Convention. Part II first discusses the distinctive features of the ICSID

annulment process and how it has managed to achieve uniformity, consistency, finality,

and efficiency, and, second, analyzes the ICSID annulment grounds in a comparative

perspective. Then, Part III recommends that ICSID continue to favor a uniform and

consistent narrow interpretation of the annulment grounds and to balance finality and

efficiency with accuracy. The article concludes that it is crucial to favor finality,

accuracy, efficiency, uniformity, and consistency as ICSID faces a growing number of

pending annulment cases.