Overview of the ICSID
annulment process
Ruth Mackenzie
Centre for International Courts and Tribunals
Faculty of Laws, UCL
Post-award proceedings under the
ICSID Convention
Article 53
(1) The award shall be binding on the parties and shall not
be subject to any appeal or to any other remedy except
those provided for in this Convention. Each party shall
abide by and comply with the terms of the award except to
the extent that enforcement shall have been stayed
pursuant to the relevant provisions of this Convention.
Article 49(2): Supplementary
award and rectification
The Tribunal upon the request of a party made within 45 days
after the date on which the award was rendered may after
notice to the other party decide any question which it had
omitted to decide in the award, and shall rectify any
clerical, arithmetical or similar error in the award. Its
decision shall become part of the award and shall be
notified to the parties in the same manner as the award. The
periods of time provided for under paragraph (2) of Article 51
and paragraph (2) of Article 52 shall run from the date on
which the decision was rendered.
Articles 50 and 51:
Interpretation and Revision
Interpretation
• Dispute as to meaning or scope of award
• Application in writing to Secretary-General
• If possible, request submitted to the original Tribunal
Revision
• On ground of discovery of some fact of such a nature as decisively to
affect the award, provided that when the award was rendered that fact
was unknown to the Tribunal and to the applicant and that the applicant's
ignorance of that fact was not due to negligence
• Application in writing addressed to Secretary-General
• Within 90 days after the discovery of such fact and in any event within 3
years after date on which award rendered
• If possible, request submitted to the original Tribunal
Article 52: Annulment
(1) Either party may request annulment of the award by an
application in writing addressed to the Secretary-General on
one or more of the following grounds:
(a) that the Tribunal was not properly constituted;
(b) that the Tribunal has manifestly exceeded its powers;
(c) that there was corruption on the part of a member of
the Tribunal;
(d) that there has been a serious departure from a
fundamental rule of procedure; or
(e) that the award has failed to state the reasons on which it
is based.
Annulment procedure
(Article 52(2)-(6) and
ICSID Arbitration Rules 50-55)
• Application must be made within 120 days after the date award
is rendered unless annulment requested on grounds of corruption
(within 120 days after discovery of corruption and in any event
within 3 years of date award rendered)
• Application must
(a) identify the award to which it relates;
(b) indicate the date of the application;
(c) state in detail the grounds on which it is based
(d) be accompanied by the payment of a fee for lodging the
application.
Establishment of the
ad hoc Committee
• Chairman appoints ad hoc Committee of three
persons from the Panel of Arbitrators
• Limitations on membership of Committee set out
in Article 52( 3)
• Committee has the authority to annul the award
or any part thereof on any of the grounds set
forth in Article 52(1)
Procedure
• The provisions of Articles 41-45, 48, 49, 53 and 54, and
of Chapters VI and VII shall apply mutatis mutandis to
proceedings before the Committee (Article 52(4)).
• The provisions of ICSID Arbitration Rules apply mutatis
mutandis to any procedure relating to annulment of an
award and to the decision of the Committee (Rule 53).
• Committee may be asked to rule on application for stay
of enforcement (or continuation, modification or
termination of stay)
Annulment practice
28 annulment requests registered to date:
•
•
•
•
15 annulment decisions issued
1 discontinued
2 settled during annulment phase
10 pending
Annulment requests
Completed annulment proceedings
Case
Klöckner Industrie-Anlagen
GmbH v Cameroon (I)*
Amco Asia Corporation v.
Indonesia (I)*
MINE v. Guinea**
Klöckner Industrie-Anlagen
GmbH v. Cameroon (II)
Amco Asia Corporation v.
Indonesia (II)
Southern Pacific Properties
v. Egypt
Request registered
Decision
16 February 1984
3 May 1985
18 March 1985
30 March 1988
16 May1986
22 December 1989
1 July 1988
17 May 1990
20 February 1991
17 December 1992
27 May 1992
Settled/discontinued
*Case resubmitted after annulment proceeding. Annulment of second award requested.
** Case resubmitted after annulment proceeding. Case settled after resubmission.
Annulment requests
(continued)
Completed annulment proceedings
Case
Philippe Gruslin v. Malaysia
Wena Hotels Limited v. Egypt
CAA/Vivendi Universal v.
Argentine Republic (I)***
Request registered
Decision
19 December 2000
24 January 2001
Discontinued
5 February 2002
23 March 2001
3 July 2002
*** Case resubmitted after annulment proceeding. Second annulment proceedings pending.
Annulment requests
(continued)
Completed annulment proceedings
Case
Consortium R.F.C.C. v.
Morocco
CDC Group plc v. Seychelles
Patrick Mitchell v. DR of Congo
Repsol YPF Ecuador S.A. v.
Petroecuador
MTD Equity Sdn. Bhd. and
MTD Chile S.A. v. Chile
Hussein Nuaman Soufraki
v. United Arab Emirates
Joy Mining Machinery
Limited v. Egypt
Empresas Lucchetti, S.A. and
Lucchetti Peru, S.A. v. Peru
CMS Gas Transmission Company
v. Argentine Republic
Request registered
Decision
30 April 2004
30 April 2004
15 July 2004
18 January 2006
29 June 2005
1 November 2006
15 July 2004
8 January 2007
30 September 2004
21 March 2007
12 November 2004
5 June 2007
22 December 2004
Settled/discontinued
1 July 2005
5 September 2007
27 September 2005
25 September 2007
Annulment requests
Pending
Case
Request registered
Azurix Corp. v. Argentine Republic
11 December 2006
Siemens A.G. v. Argentine Republic
16 July 2007
Malaysian Historical Salvors, SDN, BHD v. Malaysia
17 September 2007
Ahmonseto, Inc. and others v. Arab Republic of Egypt
2 November 2007
M.C.I. Power Group, L.C. and New Turbine, Inc. v. Ecuador
6 December 2007
CAA/Vivendi Universal v. Argentine Republic (II)
19 December 2007
Fraport AG Frankfurt Airport Services v. Philippines
8 January 2008
Sociedad Anónima Eduardo Vieira v. Republic of Chile
24 January 2008
Sempra Energy International v. Argentine Republic
30 January 2008
Enron and Ponderosa Assets v. Argentine Republic
7 March 2008
Ad Hoc Committee approaches
to Article 52:
General
• Annulment grounds exhaustively set out in Article 52
• Annulment proceeding is not an appeal
• No presumption in favour of or against annulment
(Vivendi)
Manifest excess of powers
• Lack of jurisdiction
• Failure to exercise jurisdiction (Vivendi)
• Failure to apply applicable law under Article 42
• Distinction between failure to apply proper law and error
in application of law
• Must be manifest
Serious departure from a
fundamental rule of procedure
• Serious departure
• Fundamental rule
• Deprive party of benefit or protection which the rule was intended to
provide (MINE v Guinea); such as to lead to a substantially different
outcome? (Wena Hotels v Egypt; CDC v Seychelles)
• Due process/procedural fairness
Failure to state reasons
•
Lack of qualifiers in Article 52(1)(e)
•
Test relates to absence of reasons, not adequacy of reasons (MTD v Chile)
•
MINE v Guinea: ‘the requirement that the award has to be motivated
implies that it must enable the reader to follow the reasoning of the Tribunal
on points of fact and law. It implies that and only that . . . the requirement to
state reasons is satisfied as long as the award enables one to follow how
the Tribunal proceeded from Point A to Point B and eventually to its
conclusion, even if it made an error of fact or law. ‘
•
Vivendi: (i) the failure to state reasons must leave the decision on a
particular point essentially lacking in any expressed rationale; (2) that point
must itself be necessary to the tribunal’s decision
•
Contradictory or frivolous reasons
•
Failure to answer questions
– Article 49(2)
– Intelligibility of award/effect on award (MINE v Guinea)
Stay of enforcement
• Applicant may request stay of enforcement in
application for annulment - provisional stay until ad
hoc Committee ruling (Article 52(5))
• Either party may request stay at any time before final
disposition of the application (Arbitration rule 54)
• Is a guarantee or security required for grant of stay of
enforcement?
Costs of annulment proceedings
• In almost all annulment proceedings to date, ad hoc
Committee has ordered the parties to share equally costs
incurred by the Centre (including fees and expenses of the ad
hoc Committee), and to bear their own expenses. However,
– CDC v Seychelles: Seychelles ordered to bear entirety of
costs of ICSID and the Committee. Committee observed
that the annulment application was ‘fundamentally lacking
in merit’ and ’to any reasonable and impartial observer,
most unlikely to succeed’ (para.89)
– Repsol v Petroecuador: Petroecuador ordered to bear all
costs incurred by ICSID, including fees and expenses of
Committee, and to bear half of fees and expenses incurred
by Repsol in the annulment proceeding. (paras. 86-88)