It has been 12 years since the ICSID Arbitration Rules’ latest update. ICSID Arbitration Rules draft amendments were published earlier this month. One of the overall goals of the amendments is to increase efficiency. Another is to increase transparency, especially with respect to third-party funding.
These amendments may constitute the most significant changes made to the ICSID Arbitration Rules since their creation, if adopted. In order to be adopted, 2/3 of the ICSID Member States need to approve the amendments. The proposed draft rules are available here.
The most important proposed changes are listed below.
The ICSID Arbitration Rules amendments provide the possibility of arbitration or mediation through the Additional Facility even for cases where neither party comes from an ICSID contracting member. Currently, this possibility does not exist and it is necessary that at least one of the parties to a dispute is a national or comes from an ICSID contracting member State.
Specific rules regarding bifurcation have been provided. Under the proposed ICSID Arbitration Rules amendments, if the request for bifurcation relates to a preliminary objection, a party shall file the request within 30 days after the filing of the memorial on the merits or, if the objection relates to an ancillary claim, within 30 days after the filing of the written submission containing the ancillary claim, unless the facts on which the objection is based are unknown to the party at the relevant time.
Challenge of Arbitrators
The draft ICSID Arbitration Rules amendments provide an expedited procedure for the challenge of arbitrators. The proposed procedure would set a time frame of 20 days for filing a request for challenge starting from the moment when the critical details have been learnt. The challenge must be decided upon within 30 days from the final submissions by the parties, at the latest. The proceedings would continue with the challenged arbitrator, although the parties might agree differently. Finally, if the decision on the challenge of the arbitrator is positive, and the arbitrator is disqualified, both parties can demand that any decision of the tribunal in which the disqualified arbitrator participated can be considered anew by the newly composed arbitral tribunal.
Checklist of Important Details
The authors of the draft ICSID Arbitration Rules amendments provided a special checklist with necessary details when filing a Request for Arbitration or Conciliation. This way, the administrative authorities will in theory be more efficient in registering the case and the parties will have a chance to double-check that they have provided sufficient information.
Consent to Publishing of Awards
The proposed draft ICSID Arbitration Rules amendments provide for the possibility of the automatic publication of awards, decisions and orders. An exception exists if a written objection is provided by the parties to the proceedings within 60 days. However, the objection of a party does not eliminate the entire possibility of publishing documents by ICSID. ICSID still can issue legal excerpts of awards. Regarding parties to proceedings under the ICSID Additional Facility rules, sensitive data would be redacted.
In order to be environmentally conscious and save time, the amendments propose that filings be electronic. However, in cases of exceptional circumstances there is a possibility for the parties to submit their documents in paper format.
Faster Decisionmaking and Deliberation of ICSID Administrative Bodies
Greater efficiency of the ICSID administrative bodies is anticipated through a more flexible manner of organizing physical meetings and decisionmaking.
New Timelines for Rendering Awards
The draft ICSID Arbitration Rules amendments provide for fixed periods of time during which the tribunals must deliver the award. Periods of 60, 180 or 240 days depend on concrete circumstances. These deadlines are applicable if there was a request to dismiss a case due to a manifest lack of legal merit, a preliminary objection or an exchange of final submissions by the parties, respectively. However, the obligation of the arbitral tribunals is not absolute. The arbitrators shall apply their “best effort” to render an award within the applicable timeframe but they reserve the right to issue the award on a different date provided that they have informed the parties.
Parties to the Arbitration
The drafters of the ICSID Arbitration Rules amendments also propose changes to the Additional Facility rules. Proposed amendments would enable international organizations to participate in the arbitration, such as the European Union, ASEAN, the OECD and other similar entities.
Revised Arbitration Rules for Expedited Proceedings
The authors of the draft ICSID Arbitration Rules amendments also propose revisions to the rules for expedited arbitral proceedings. The parties have to decide on important procedural matters in a shorter timeframe than in the case of regular arbitration proceedings.
Revised Conciliation and Mediation Rules
ICSID also proposes amendments to the existing rules of mediation and conciliation.
Security for Costs
The proposed ICSID Arbitration Rules amendments provide for a special provision regarding security for costs. When deciding on security for costs, the tribunal must take into account the party’s capacity for complying with an adverse decision on the relevant matter and all other specificities which might affect the status of the parties.
Third-party Funding Details Disclosure
Parties in the arbitration proceedings will have to disclose the sources of their funding. Such an obligation is binding upon the parties as of the moment of the registration of the case. This obligation does not end until the end of the proceedings. When disclosing funding sources, the parties would also disclose the details of their funders. Disclosure of these details to the arbitrators would occur before their appointment. The parties and the arbitrators would thus avoid conflicts of interest which might arise between funders and prospective arbitrators. Arbitrators would disclose if they hold any ties to funders of any of the parties, at the outset.