WFW ICSID Rule Change Briefing May 2006

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WFW ICSID Rule Change Briefing May 2006 Powered By Docstoc
					Changes to the
ICSID Rules
Briefing

May 2006




The International Centre       Introduction
for Settlement of              ICSID is an institution based in Washington DC which was created
Investment Disputes            by the World Bank specifically to assist in the settlement of
                               disputes between investors and signatories to the 1965
(“ICSID”) recently             International Convention on the Settlement of Investment Disputes
announced changes to its       between States and Nationals of Other States (the "Washington
                               Convention").
Rules of Procedure for
Arbitration Proceedings.       Since its creation, ICSID has become the predominant forum for
                               investment treaty arbitrations including disputes brought by foreign
                               investors against host States under bilateral investment treaties
The purpose of this            ("BITs")1 and free trade agreements ("FTAs").

briefing is to outline these   The changes to ICSID's Rules of Procedure for Arbitration
changes which became           Proceedings (the "ICSID Rules") became effective on 10 April 2006.
                               Pursuant to Article 44 of the Washington Convention, unless
effective on 10 April 2006.    otherwise agreed by the parties, any ICSID arbitration to which the
                               parties consented after this date will be conducted in accordance
                               with the new ICSID Rules.


                               Summary of changes to ICSID Rules
                               Arbitrators Independence (ICSID Rule 6)
                               Under the new ICSID Rules, arbitrators have a continuing obligation
                               to disclose their relationship (if any) with the parties or any
                               circumstances that might cause the arbitrator’s reliability for
                               independent judgment to be questioned by a party. The ICSID
                               Rules previously only provided that arbitrators were under a duty to
                               disclose any past or existing relationships with the parties.

                               Attendance of third parties at hearings (ICSID Rule 32)
                               The new ICSID Rule 32 provides that ICSID Tribunals (“Tribunals”)
                               can, after consultation with the Secretary-General of ICSID and
                               provided no party objects, permit third parties to attend or observe
                               oral hearings. In addition, the new Rule requires Tribunals
                               presiding over such open hearings to “establish procedures for the
                               protection of proprietary or privileged information”.

                               Amicus Curiae Briefs (ICSID Rule 37)
                               The new ICSID Rule 37 allows and provides procedures for
                               Tribunals to accept amicus curiae briefs (written submissions) from
                               interested third parties who are not party to the dispute.

                               1 Some BITs do however provide for ad hoc arbitration or specify other well known arbitration
                               institutions such as UNCITRAL or the ICC. Please contact us to confirm whether a particular BIT
                               provides for ICSID arbitration.

                               THE BOLIVIA OIL & GAS BRIEFING WATSON, FARLEY & WILLIAMS LITIGATION GROUP
A Tribunal can decide to accept amicus curiae briefs even if the                                               On receipt of the preliminary objection, the other party will
parties object. The Tribunal is however required to consult both                                               have the right to respond and the Tribunal will be required to
parties when deciding whether to accept the submission of an                                                   give its ruling on an expedited basis. Rule 41 also allows
amicus curiae brief.                                                                                           parties to agree an alternative expedited procedure.

In deciding whether to accept the submission of an amicus                                                      Publication of Awards (ICSID Rule 48)
curiae brief, Tribunals must consider such factors as whether:                                                 The ICSID Rules prohibit ICSID from publishing awards without
                                                                                                               the parties’ consent. Under the old ICSID Rules, ICSID had a
    the amicus curiae brief would assist the Tribunal resolve a
                                                                                                               discretion to publish excerpts of awards that revealed the
    “legal or factual issue related to the proceedings” by
                                                                                                               Tribunal’s reasoning. Under Rule 48, ICSID is now under a
    providing a “perspective, particular knowledge or insight that                                             positive duty to “promptly” publish “excerpts of the legal
    is different from that of the disputing parties”                                                           reasoning” of every award.
    the amicus curiae brief would address a matter within the
    scope of the dispute
    the interested third party has a significant interest in the
                                                                                                               Change to ICSID’s Administrative
    proceedings.                                                                                               and Financial Regulations
Tribunals are under a duty to ensure that, if accepted, an                                                     Arbitrator Fees (Administrative & Financial Regulation 14)
amicus curiae brief does not disrupt the proceeding or unduly                                                  Any request to deviate from ICSID’s standard schedule of
burden or unfairly prejudice either party to the dispute and that                                              arbitrator fees must be directed to the Secretary-General of
both parties are given an opportunity to present their                                                         ICSID, who sets the above standard, and not the parties.
observations on the amicus curiae brief.
                                                                                                                         Click here for the ICSID Convention, Regulations
Provisional Measures (ICSID Rule 39)                                                                                   and Rules (as amended and effective 10 April 2006)
To improve a Tribunal's ability to grant provisional measures on
an expedited basis, the new Rule 39:

    allows parties to submit requests for provisional measures as                                              If you wish to discuss any of the above changes to the ICSID
    soon as a dispute is registered with ICSID - before the                                                    Rules or any issues concerning ICSID arbitration please do not
    Tribunal has been constituted                                                                              hesitate to speak to your usual contact at Watson, Farley &
    imposes an obligation on the ICSID Secretary General to fix                                                Williams LLP or one of the people listed below.
    time limits for the parties to exchange observations on the
    request so that the Tribunal may decide the issue promptly
    upon its constitution.                                                                                     Contacts
Preliminary Objections (ICSID Rule 41)                                                                         David Kavanagh                                          James Spencer
Rule 41 provides parties with an additional basis for raising a                                                dkavanagh@wfw.com                                       jspencer@wfw.com
preliminary objection to a claim - that the claim is “manifestly                                               +44 (0) 20 7814 8000                                    +44 (0) 20 7814 8000
without legal merit”.
                                                                                                               David Foster                                            Watson, Farley & Williams
The new preliminary objection procedure provides parties with                                                  dfoster@wfw.com                                         15 Appold Street
an expedited mechanism for striking out frivolous claims. A                                                    +44 (0) 20 7814 8000                                    London EC2A 2HB
party will have up to 30 days after the Tribunal is constituted,                                                                                                       Tel: +44 (0) 20 7814 8000
but in any event before the first session of the Tribunal, to                                                  Patrick Angenieux                                       Fax: +44 (0) 20 7814 8141/2
submit such an preliminary objection and must “specify as                                                      pangenieux@wfw.com
precisely as possible the basis for the objection”.                                                            +44 (0) 20 7814 8000                                    www.wfw.com




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