Canada: What's In A Rule? – The International Centre For Settlement Of Investment Disputes (ICSID) Proposal For Amendment Of The ICSID Rules [Part 2 Of 2]

Last Updated: May 14 2019
Article by The International Arbitration Blog and Jocelyn Turnbull Wallace

Most Read Contributor in Canada, April 2019

On March 14, 2019, the ICSID released Working Paper #2 (an update to the original proposal for amendments to the ICSID Rules), which contained both the Proposed Rules, and discussion about the suggested changes from Member States and the ICSID's position on whether or not same should be adopted.

Part 1 of this two part series, which you can read here, addressed changes relating to improving the efficiency of the proceedings and Expedited Arbitration proceedings under the Proposed Rules. This installment will focus on the Proposed Rules in relation to disqualification of Arbitrators, transparency of awards, and the development of new mediation rules.

Highlighting Disqualification of Arbitrators in the Proposed Rules

The ICSID raised concern that disqualification challenges were being used strategically to stall claims and delay decisions of arbitrators due to the automatic suspension of the proceedings. In response, Working Paper #1 set out that proceedings must continue during any pending disqualification proposal and created tight timelines to deal with same.1

Numerous comments were received both for and against the ICSID's proposal in Working Paper #1. Ultimately, the Proposed Rules were changed to create an automatic suspension of the proceeding in the face of a disqualification proposal, unless the parties agree to continue with the proceeding.2 Further, the timelines initially proposed by the ICSID were felt to be too tight, and were altered to allow the responding party the same length of time as the applicant (21 days) to file materials.3

Highlighting Transparency of Awards in the Proposed Rules

A number of Member States have argued for the publication of Awards in full, with or without the consent of the Parties. The ICSID correctly pointed out in Working Paper #2 that Article 48(5) of the Convention would need to be amended to allow for Awards to be published in full without consent. Although an amendment to the Convention is possible, the ICSID is not pursuing one at this time.

In fact, ICSID originally proposed amending the rules to allow publication of Awards after 60 days where a silent party's consent would be deemed.4 After consideration of the Convention, this deeming provision was removed from the Proposed Rules.5

In an effort to provide further transparency to the Awards granted by Tribunals, the Proposed Rules outline that parties may consent to the publication of the Award, or consent to publish a redacted version of the Award.6 Absent consent, the Centre shall publish excerpts of the legal reasoning after providing same to the parties for comment. The Centre shall consider any and all comments received from the parties, but ultimately, are free to publish the legal reasoning excerpts without further review or decision from the Tribunal.7 Although some Member States argued that there should be a process for redaction of the excerpts and rulings on the appropriate redactions, the ICSID felt hat was made unmanageable by the Tribunal being functus after the Award was issued and the additional costs.8

In regards to Orders and Decisions, the Proposed Rules set out that the Centre will publish, within 60 days of issuance, all Orders and Decisions with any redactions agreed to by the parties.9 Where the parties are unable to agree on redactions, the matter will be referred to the Tribunal for decision.10

Highlighting Mediation Rules in the Proposed Rules

In contrast to Working Paper #1, the Proposed Rules outline a stand-alone set of rules with their own Administrative and Financial Regulations in relation to mediation (the "Mediation Rules").11

The Proposed Rules apply to mediation proceedings dealing with investment disputes between a State (Member or non-member), or a Regional Economic Integration Organization ("REIO") on one hand, and a national of any other State (Member or non-member). The Mediation Rules do not apply to proceedings between a State and its own national.12

The Mediation Rules outline that any party can request mediation under the Proposed Rules regardless of whether or not there is a prior existing party agreement to send disputes to mediation under the Mediation Rules. The parties can appoint one mediator, or co-mediators within 60 days of the date of registration13 and failing which, either party may request assistance from the Secretary-General to appoint the mediator on the parties' behalf.14

The overall timelines and procedures reflect the ICSID's attempt to streamline the dispute resolution process and to increase efficiency. The Mediation Rules outline that parties must supply initial written statements and briefs within 15 days of the notice of acceptance15, and that the mediator must hold their first session within 30 days of the same.16 The first session shall determine the Protocol that the mediator and the parties must follow, and the Mediation Rules outline a number of procedural areas that must be addressed when designing the Protocol.17

Final Comments

In addition to the areas highlighted in this two part series, the ICSID Proposed Rules also detail new, or substantially new rules in regards to:

  • Security for Costs applications;18
  • Provisional measures;19
  • Third Party Funding disclosure obligations;20 and
  • Tendering of Expert Evidence21 (both party experts and Tribunal experts).

The overarching goal of the ICSID Proposed Rules appears to be greater efficiency within the proceedings through more streamlined processes and cost-efficient stages with greater opportunities for mediation or expedited arbitrations. In dealing with the provisional measures, conflict concerns, and interim issues more effectively and efficiently, the Proposed Rules appear to be a clear and well drafted way to expedite the proces

Footnotes

1 Working Paper #1.

2 III. Rules of Procedure for Arbitration Proceedings (Arbitration Rules), rule 21.

3 Working Paper #2.

4 Working Paper #1.

5 Working Paper #2.

6 III. Rules of Procedure for Arbitration Proceedings (Arbitration Rules), rule 61.

7 III. Rules of Procedure for Arbitration Proceedings (Arbitration Rules), rule 61.

8 Working Paper #2.

9 III. Rules of Procedure for Arbitration Proceedings (Arbitration Rules), rule 62.

10 III. Rules of Procedure for Arbitration Proceedings (Arbitration Rules), rule 62.

11 XI. Rules of Procedure for Mediation Proceedings.

12 XI. Rules of Procedure for Mediation Proceedings, rule 2.

13 XI. Rules of Procedure for Mediation Proceedings, rule 11.

14 XI. Rules of Procedure for Mediation Proceedings, rule 11.

15 XI. Rules of Procedure for Mediation Proceedings, rule17.

16 XI. Rules of Procedure for Mediation Proceedings, rule 18.

17 XI. Rules of Procedure for Mediation Proceedings, rule 18.

18 III. Rules of Procedure for Arbitration Proceedings (Arbitration Rules), rule 51.

19 III. Rules of Procedure for Arbitration Proceedings (Arbitration Rules), rule 44.

20 III. Rules of Procedure for Arbitration Proceedings (Arbitration Rules), rule 13.

21 III. Rules of Procedure for Arbitration Proceedings (Arbitration Rules), rules 37 and 38.

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