Approved by the ICSID Administrative Council on March 21, 2022, the amended ICSID Rules will come into effect on July 1, 2022, with “streamline procedures to enable greater access and speed, increase transparency, and enhance disclosures, with the ultimate goal of facilitating foreign investment for economic growth,” as stated by the President of the World Bank Group and Chair of the ICSID Administrative Council, David Malpass.
While the amendments do not modify the procedural nature of the ICSID Rules and are not expected to disrupt the way and structure in which users have handled ICSID cases to date, there are significant changes in two areas where the need for reforms had been consistently highlighted by scholars and practitioners alike.
The main area significantly reformed is transparency, where the amendments aim to increase the publications of awards, orders, and decisions. In all proceedings filed under the current rules, Article 48 of the ICSID Convention prohibits the publication of awards without the consent of the parties. Under the amended rules, however, Rule 63 establishes that ICSID shall publish orders and decisions, with any redactions agreed to by the parties and jointly notified to the Secretary-General within 60 days after the order or decision is issued. In other words, the consent to publish an award is deemed given unless a party objects in writing within 60 days after the award is issued; and, even in the event of an objection, ICSID’s Secretariat is still allowed to prepare legal excerpts of the award.
Similarly, the amendments also intend to bolster transparency by imposing new disclosure requirements for third-party funding, a hotly-debated area in recent years. Pursuant to amended Rule 14, parties will be obliged to disclose the name and address of any non-party from which they received funding, directly or indirectly on an ongoing basis; and, if the non-party providing funds is a juridical person, the notice of third-party funding shall include the names of the persons and entities that own and control that juridical person.
Also akin to transparency, the amendments will also provide broader access to ICSID rules and services. Among other key features, for example, amendments to the ICSID Additional Facility Rules for Arbitration and Conciliation provide easier access to ICSID in cases where neither the state nor the investor is an ICSID national member, and access to ICSID arbitration and conciliation for Regional Economic Integration Organizations (e.g., the European Union).
The other main area where significant changes are expected consists of the efficiency and timeliness of the proceedings. Amended provisions include options for:
- expedited arbitration,
- mandatory case management conferences,
- the potential to consolidate or coordinate related cases,
- reduced timeframes for various stages of the process, and
- mandatory timeframes for issuing awards and decisions.
- These tools are provided in response to the cry for ways to reduce the time of proceedings from States and investors.
Finally, complementing the tools to provide more cost-effective proceedings, the amendments include rules to conduct mediation and fact-finding tailored to the specific needs and characteristics of investor-state dispute resolution proceedings. These alternative dispute resolution procedures are intended to provide the parties with a broader pool of options to resolve their disputes.
The full set of approved amendments can be found here.
Authored by Orlando Cabrera Colorado and Ivan Bracho Gonzalez.
