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WFW ICSID Rule Change Briefing May 2006
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 email@example.com firstname.lastname@example.org 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 email@example.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 firstname.lastname@example.org precisely as possible the basis for the objection”. +44 (0) 20 7814 8000 www.wfw.com WATSON, FARLEY & WILLIAMS LONDON ATHENS PARIS NEW YORK SINGAPORE BANGKOK ROME HAMBURG All references to ‘Watson, Farley & Williams’ and ‘the firm’ in this brochure mean Watson, Farley & Williams LLP and/or its affiliated undertakings. Any reference to a 'partner' means a member of Watson, Farley & , Williams LLP or a member or partner in an affiliated undertaking, or an employee or consultant with equivalent standing and qualification. This brochure is produced by Watson, Farley & Williams. It provides a summary of the legal issues, but is not intended to give specific legal advice. The situations described may not apply to your circumstances. If you require advice or have questions or comments on its subject, please speak to your usual contact at Watson, Farley & Williams.
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