DAMODARAM SANJIVAYYA NATIONAL LAW UNIVERSITY

VISAKHAPATNAM, A.P., INDIA

PROJECT TITLE

Detailed Analysis of Arbitration under the aegis of ICSID

SUBJECT
Investment Law

NAME OF THE FACULTY

Mrs. Varshitha.M

Name of the Candidate

Roll No. & Semester

ATUL LAL
2017117
VIIIth SEMESTER

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INTRODUCTION
The International Center for the Settlement of Investment Disputes (ICSID) is a non-
profit organisation dedicated to resolving . It is part of the World Bank Group, which
consists of five international organisations. The treaty-making intergovernmental body is
the International Centre for the Settlement of Investment Disputes (ICSID). Its aim is to
facilitate the resolution of disputes between governments and private foreign investors.
Its aim is to aid in economic growth. ICSID is an institutional process that promotes
conciliation and arbitration rather than an international court or tribunal. Arbitral
tribunals, which are established on an ad hoc basis to resolve each dispute, are mainly
responsible for the final resolution of disputes.

Under the Convention on the Settlement of Investment Disputes between States and
Citizens of Other States, which entered into force on October 14, 1966, the International
Center for the Settlement of Investment Disputes (ICSID) was created as an organisation
specifically designed to facilitate the settlement of investment disputes between
governments and foreign investors.

The International Centre for Settlement of Investment Disputes between States and
Nationals of Other Countries (ICSID) was created in 1965 by the ICSID Convention on
the Settlement of Investment Disputes between States and Nationals of Other Countries.
It was written between 1961 and 1965 under the auspices of the International Bank for
Reconstruction and Development (IBRD). The Executive Directors of the IBRD
approved the Conference's text on March 18, 1965. After ratification by twenty countries,
the ICSID Convention came into force on October 14, 1966, creating the ICSID as an
independent international body whose mission is to provide mediation and arbitration
services for investment disputes in accordance with the ICSID Convention's provisions.

Unless a Contracting State makes a contrary designation, the President of the Bank shall
be ex officio the Director of ICSID's legislative body, the Administrative Council, which
shall consist of members of the Bank's Board of Executives serving ex officio as
members of the Administrative Council.

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In fact, the relationship between the ICSID and the Bank is far closer than the ICSID
Convention would suggest. The ICSID Secretary-General is regularly chosen by the vice-
president and general counsellor, and the Bank funds the ICSID Secretariat's total
expenses.

The ICSID's mission is to foster economic development by facilitating private foreign

investment. The ICSID should be viewed in the light of the World Bank's broader, more
aggressive, and so far highly effective effort to create a foreign investor-friendly legal
environment. The creation of the Multilateral Investment Guarantee Agency, which
provides extremely useful insurance against investment risk in developed countries, the
International Finance Organization, which assists the private sector in funding investment
ventures in the same countries, and, more broadly, the adoption of policies are just a few
of the many positive outcomes of this long-running initiative.

ICSID RESPONSIBILITIES

Recognizing the importance of private foreign investment in growth, many countries are
working to create favourable conditions for foreign investors. The provision of effective
dispute resolution mechanisms is an important part of a favourable regulatory
environment for foreign investors. The International Centre for Settlement of Investment
Disputes (ICSID) facilitates the conciliation and resolution of disputes between Member
States and investors who are citizens of other Member States. The use of ICSID
conciliation and arbitration is entirely voluntary.

However, once the parties have agreed to arbitrate under the ICSID Convention, neither
can withdraw the permission arbitrarily. In fact, the Convention requires all ICSID
Contracting States, whether or not they are parties to the dispute, to accept and implement
ICSID arbitral awards.

Arbitration is an appealing alternative to the traditional methods of resolving securities

disputes. It avoids the annoyances of domestic court cases as well as diplomatic stability.
This allows the parties to choose arbitrators who respect their confidence and have the

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necessary expertise in the field. Investment arbitration does not have to take place within
the ICSID system.

Ad hoc arbitration may be agreed upon by the parties to an investment dispute. However,
ICSID arbitration has some advantages, such as providing consistent provisions and
procedural guidelines, administrative support for the execution of litigation, ensuring trial
non-frustration, and encouraging award acceptance and enforcement.

In addition to offering conciliation and arbitration facilities under the ICSID Convention,
the Center has had a set of Additional Facility Regulations in place since 1978, which
enable the ICSID Secretariat to undertake other types of proceedings between States and
foreign nationals that are not covered by the Convention. As it refers to a contract that
has "properties that distinguish it from an ordinary commercial agreement," there is also
an alternative provision for conciliation and arbitration in cases where the conflict is not a
business dispute.

The ICSID Secretary-General agreeing to act as the ad hoc (i.e., non-institutional)

arbitration assigning jurisdiction of the arbitrators is the third activity of ICSID in the
field of dispute resolution. Most commonly, this is accomplished by arbitration
agreements governed by the Arbitration Laws of the United Nations Commission on
International Trade Law (UNCITRAL), which are specifically designed for ad hoc
hearings. Both investors and host countries benefit from ICSID arbitration. The investor
benefits from having direct access to an influential international forum in the event of a
conflict. The host state benefits twice: it improves its economic climate by offering
arbitration, which is supposed to attract more international investment.

Furthermore, by agreeing to ICSID arbitration (Art. 27), the host state defends itself from
diplomatic immunity and protects itself from certain forms of international or domestic
litigation (Art. 26). ICSID got off to a sluggish start. In its early years, it had very few
events. Over the years, ICSID has grown in popularity, and it now has a massive caseload
to deal with. A major contributing factor is the danger of basing authority on treaty
consent clauses. The Executive Directors of the Bank established a mechanism for the
ICSID Convention that respects both creditors' and host countries' needs. The

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arrangements for the ICSID Administrative Council represent a balance of interests. Each
Contracting State has one representative on the Council, and the ICSID Convention
ensures that all Contracting States are fairly represented because each delegate has one
vote. The ICSID Convention gives private investors exclusive access to an international
forum.

Furthermore, the provisions of the ICSID rule, which will be addressed in greater detail
below, ensure creditors that the State Party's refusal or abstraction to participate in the
proceedings after consenting to ICSID arbitration cannot be used to avoid the arbitral
procedure. In order to protect investor interests, the ICSID Convention states that a
Contracting State can require the exhaustion of local remedies before agreeing to ICSID
arbitration. This condition may be stated in the investment agreement, a bilateral
agreement between the host country and the investor's country, or a declaration made by
a Contracting State at the time the ICSID Convention was signed or ratified, though only
Israel made such a declaration.

Furthermore, except where the parties have specifically agreed otherwise, Article 42(1)
of the ICSID Convention expressly states that the arbitral tribunal shall resolve a dispute
according to the law of the host State, as well as any applicable international law.

The Administrative Council has introduced a set of Additional Facility Rules in addition
to the ICSID Regulations and Rules. The ICSID Secretariat is allowed under the
Additional Facility Rules to oversee those forms of proceedings between States and
foreign nationals that are not covered by the ICSID Convention. Both include fact-
finding, conciliation, and arbitration proceedings for the resolution of investment
conflicts in which neither the disputing party nor the foreign national's home state is an
ICSID Convention Contracting State. The Additional Facility Rules originally included:

(i) the “Additional Facility Rules proper (the other Additional Facility Rules being
strictly speaking schedules to this main set of rules), which set out the basic
conditions of access to the Additional Facility”; and
(ii) the Additional Facility Administrative and Financial Rules, which were a
condensed version of the ICSID Administrative and Financial Rules.

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JURISDICTION OF ICSID

Tw0 additi0nal c0nditi0ns must be fulfilled under Article 25 f 0r an ICSID tribunal t0

have jurisdicti0n. Rati0ne pers0nae jurisdicti0n and rati0ne materiae jurisdicti0n are tw0
terms that are used interchangeably. In the case 0f the f0rmer, this indicates that the
parties have been pr0perly identified. The fundamental c0nditi0n 0f Article 25(1) is that
the dispute is between a C0ntracting State's territ0rial and that 0f an0ther C0ntracting
State's territ0rial. The necessity, 0n the 0ther hand, raises a slew 0f interpretive issues.

In terms 0f the definiti0n 0f a C0ntracting State, the C0nventi0n declares a State t0 be a

C0ntracting State 0nly when it ann0unces its signature 0f the C0nventi0n at least thirty
days bef0re the date 0f signature; h0wever, such clarificati0n can n0t take effect until the
dispute is l0dged with the W0rld Bank by dep0siting either the agreement, the appr0val,
0r the instrument 0f accessi0n.

Sec0nd, sch0lars and ICSID casel0ad argue that, while a state d0es n0t have t0 be a
C0ntracting State when it c0nsents t0 ICSID jurisdicti0n, it must have that status by the
time the f0rmal request is eventually submitted t0 the Centre's Secretary-General,
0therwise the ICSID tribunal d0es n0t have abs0lute pers0nal jurisdicti0n 0ver that state,
even th0ugh it c0nsented.

Finally, Article 25(1) states that a C0ntracting State may, but d0es n0t have t0, include a
c0nstituent subdivisi0n 0r State b0dy that c0uld be a party t0 the ICSID tribunal's case if
it is inv0lved. Federal g0vernments, c0unties, and 0ther f0rms 0f l0cal g0vernment are
examples 0f c0nstituent entities, while state-0wned 0r c0ntr0lled c0rp0rati0ns are
examples 0f 0rganisati0ns. N0netheless, the C0ntracting State retains the right t0 define
the term precisely, just as it retains the right t0 n0minate its subdivisi0ns and/0r b0dies
with legal standing bef0re an ICSID tribunal t0 the Centre.

Then, in 0rder t0 ensure that the C0ntracting State retains c0ntr0l 0ver the use 0f ICSID
arbitrati0n by its subdivisi0ns / agencies, Article 25(3) requires that the C 0ntracting State
t0 which they bel0ng rec0gnise their c0nsent t0 such arbitrati0n; instead, the C0ntracting
State may n0tify the Center that its c0nsent is rev0ked under the same pr0visi0n. When it

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c0mes t0 the identity 0f the f0reign invest0r, 0r a nati0nal 0f an0ther C0ntracting State,
it's w0rth n0ting that the C0nventi0n c0ntains several pr0visi0ns that represent
significant advances in internati0nal law in terms 0f legal individual nati0nality.

H0wever, it sh0uld be n0ted that the term "nati0nal" as described in Article 25(2)(a)
enc0mpasses b0th natural and legal pers0ns. While the definiti0n 0f natural pers0ns is
straightf0rward, it is necessary t0 n0te that the C0nventi0n has imp0sed a rule 0f
c0ntinuity 0f nati0nality 0n them, in the sense that a natural pers0n must have the
nati0nality 0f a C0ntracting State b0th when the parties c0nsent t0 the jurisdicti0n 0f
ICSID and when the applicati 0n is registered. Furtherm0re, at any given time, this race
cann0t be that 0f the C0ntracting State's Party t0 the Dispute.

H0wever, the C0nventi0n has made s0me pr0gress in the area 0f legal pers0ns. [A
nati0nal 0f an0ther C0ntracting State is] any juridical pers 0n wh0 had the nati0nality 0f
a C0ntracting State 0ther than the State party t0 the dispute 0n the date 0n which the
parties c0nsented t0 submit such dispute t0 c0nciliati0n 0r arbitrati0n, and any juridical
pers0n wh0 had the nati0nality 0f the C0ntracting State party t0 the dispute 0n the date
0n which the parties c0nsented t0 submit such dispute t0 c0nciliati0n 0r arbitrati0n.

This segment deals with tw0 different but related scenari0s. The first is self-explanat0ry
since it applies t0 a legitimate individual wh0 is a C0ntracting State nati0nal wh0 is n0t a
party t0 the c0nflict. It sh0uld be n0ted, h0wever, that the law 0f natural pers0n
c0ntinuity 0f nati0nality d0es n0t apply here; h0wever, the first paragraph applies t0 that
nati0nality as necessary and sufficient 0nly 0n the date 0n which the parties agree t0 the
jurisdicti0n 0f ICSID; theref0re, maintaining that nati0nality until the actual c0nflict is
br0ught bef0re ICSID is n0t required. This is the situati0n described ab0ve t0 sh0w h0w
difficult and unsatisfact0ry it is t0 assess the nati0nality 0f c0mpanies f0r dipl0matic
security purp0ses under 0rdinary internati0nal law. Indeed, the situati0n under
c0nsiderati0n is 0ne in which a f0reign investment takes the legal f0rm 0f a c0mpany
structured under the laws 0f the h0st c0untry.

Since the l0cal firm will be c0nsidered a citizen 0f the h0st state, the firm d0es n0t
receive dipl0matic immunity fr0m the h0st state 0r require f0reign invest0rs t0 appeal t0

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ICSID arbitrati0n, acc0rding t0 the rules 0f cust0mary humanitarian law laid d0wn by
the Internati0nal C0urt 0f Justice in the Barcel0na case, regardless 0f the nati0nality 0f a
business depending 0n the place 0f inc0rp0rati0n. As previ0usly stated, this result is
pr0f0undly unsatisfact0ry because it c0mpletely ign0res the fact that f0reign c0mpanies,
especially multinati0nals, are 0ften required t0 establish a wh0lly 0wned 0r 0perated
subsidiary 0r j0int venture in the h0st state, either as a c0nditi0n 0f entry imp0sed by the
h0st state 0r f0r ec0n0mic reas0ns.

In b0th 0f these cases, ad0pting the ICJ's p0siti0n in the Barcel0na case will f0rce the
f0reign invest0r t0 depend s0lely 0n the h0st state's laws and s0luti0ns t0 enf0rce his 0r
her rights; this scenari0 has hist0rically pr0ven risky and unwelc0me f0r the f0reign
invest0r, wh0 is 0ften given inadequate legal security by the h0st state. It was als0 seen
that the ICJ differed fr0m the Barcel0na decisi0n in the ELSI case, but 0nly in a hazy
way that d0es n0t enable ELSI t0 claim that it 0verruled the Barcel0na rules 0f
cust0mary internati0nal law.

The advantage 0f Article 25(2)(b) 0f the C0nventi0n is that it pr0vides a very clear
resp0nse t0 this pending questi0n. F0r the purp0ses 0f enf0rcing the C0nventi0n, the
Parties wh0 decide t0 rec0gnise the l0cally inc0rp0rated entity as a nati0nal 0f an0ther
C0ntracting State. It's w0rth n0ting that this agreement f0cuses 0nly 0n the issue 0f
f0reign c0ntr0l; this means that an instrument 0f internati0nal law examines the
substance behind the framew0rk and rec0gnises that the real ec0n0mic interests and
freed0ms t0 be pr0tected are th0se 0f wh0ever 0wns the l0cally inc0rp0rated business.
N0netheless, the C0nventi0n's s0luti0n 0ften reveals its flaws, rendering the s0luti0n
0nly partially satisfact0ry. Indeed, since an agreement between the h 0st state and the
f0reign invest0r is necessary f0r the l0cally inc0rp0rated entity t0 gain immunity under
the C0nventi0n's framew0rk, the h0st state has a significant am0unt 0f c0ntr0l 0ver the
f0reign invest0r's decisi0n t0 use ICSID arbitrati0n. Furtherm0re, since this c0mpr0mise
is designed t0 be an excepti0n t0 the usual internati0nal rules 0n c0rp0rate nati0nality,
this Agreement sh0uld be explicit.

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Finally, and perhaps m0st imp0rtantly, the C0nventi0n's appr0ach rec0gnises the
principle 0f cust0mary internati0nal law that the nati0nality 0f a legal entity is
determined by its place 0f inc0rp0rati0n, and that the res0luti0n 0f the parties pursuant t0
Article 25(2)(b) 0nly pr0vides f0r an excepti0n t0 this c0ncept. In 0ther w0rds, the
exempti0n verifies the statute.

Alth0ugh it is imp0rtant that the C0nventi0n av0id the pr0blems that arise fr0m the strict
applicati0n 0f the p0siti0n 0f inc0rp0rati0n principle, the c0nclusi0n drawn earlier in this
paper is that this the0ry cann0t be ad0pted.

T0 this p0int, it is argued that the C0nventi0n's treatment 0f the issue 0f legal pers0n
nati0nality is unsatisfact0ry. T0 be sure, it sh0uld be n0ted that the C0nventi0n dates
fr0m 1965 and theref0re cann0t reflect recent devel0pments in the gl0bal ec0n0my, and
that it pr0vides a much m0re appr0priate and practical s0luti0n than that pr0vided by
cust0mary internati0nal law, which, as the Barcel0na and ELSI cases dem0nstrate,
c0ntains far t00 many l00ph0les.

ISSUE OF SANCTIONS BY ICSID

There are several innovative elements in the structure of ICSID institutional dispute
settlement mechanism. “Beginning from the main consent issue, an organized review of
certain elements requires. The point of starting in that respect is Article 25(1). The
Centre’s jurisdiction shall extend to any legal dispute arising directly from a transaction
between a Contracting State (or any constituent unit or entity of a Contracting State
appointed by that State for the Center) and a national of another Contracting State, which
the parties to the dispute agree to apply to the Center in writing. No party may
unilaterally withdraw its consent after the Parties have given their consent. Consent must
be in written form, a reasonable requirement that seeks to avoid any potential risk of
uncertainty because of the parties' stop-and-go and unilateral behaviour. The nature of
this condition can be clarified by the consequences of agreement; however, the parties
cannot revoke it automatically after giving their agreement, and they owe the
proceedings the green light to go forward.

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Written approval may take the conventional form of an express arbitration provision for
ICSID found in the investment agreement between the host state and foreign investors.
Another form of written consent may be if the host state consents to ICSID arbitration in
its foreign investment law or in a bilateral investment treaty; in this case it is for the
foreign investor to accept what is deemed to be the host state's unilateral offer of ICSID
arbitration, and such acceptance must be in writing.

This alternative is popular but also poses some interpretative problems, because it may
not be obvious whether and when mutual consent has been granted, particularly where
the law of the host state is unclear or vague as to the protocol to be followed by the
foreign investor for accepting an ICSID arbitration bid from that jurisdiction. Thus, it is
necessary for the foreign investor to decide what this process is, and more specifically,
whether the supposed agreement inherent in the laws or treaties of the host state amounts
to a one-sided offer of ICSID arbitration or is merely the confirmation of ICSID as one
of many possible alternatives for dispute resolution. In any case, it is of fundamental
importance to emphasize here as well as in any other jurisdictional question that ICSID
tribunals have accorded competence de la competence. In short, it is always up to the
ICSID tribunal to determine whether or not it has jurisdiction, as a matter of the claim's
admissibility.

Obviously, that determination includes the consent issue. ICSID case law shows a
tendency to interpret the notion of consent quite liberally, and this certainly helps the
foreign investor in all those cases where the host state seeks to use the ambiguity of its
consent to refrain from any recourse to ICSID arbitration. On the one hand, the
underlying principle is that permission must always be given freely and voluntarily. To
be sure, the approval of the host state does not necessarily emerge from its ratification of
the Convention, which instead reflects a pure readiness to return to ICSID as a possible
mechanism for dispute resolution.

Whatever form it takes, its consent for the particular dispute submitted to ICSID
arbitration must be given, this determination being regarded as an expression of the
sovereignty of the state. In the other hand, the need to uphold the rights of host states

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cannot go as far as enforcing a stringent definition of their consent; in one instance, the
ICSID tribunal correctly dismissed that view in Amco Asia et al v. The Republic of
Indonesia and held that, The agreement to arbitrate is not to be construed too
restrictively, nor as a matter of fact, broadly or liberally. It is to be construed in a way
which leads to find out and to respect the common will of the parties: such a method of
interpretation is but the application of the fundamental principle of pacta sunt servanda, a
principle common, indeed, to all systems of internal law and to international law.”

ARBITRATION RULES OF ICSID

“The ICSID was established under the Convention on the Settlement of Investment
Disputes between States and Nationals of Other States. The executive directors of the
International Bank for Reconstruction and Development (World Bank) formulated the
ICSID Convention with the belief that an institution specially designed to facilitate the
settlement of investment disputes between governments and foreign investors could help
promote increased flows of international investment in development projects. The ICSID
Convention entered into force on October 14, 1966.21 As of May 9, 2007, 144 countries
have ratified the Convention.

The ICSID Convention and Centre provide an institutional framework for conciliation
and for arbitration of disputes between private investors and host governments. Indeed,
ICSID's jurisdiction extends only to any legal dispute arising directly out of an
investment, between a Contracting State... or... any subdivision and a national of another
Contracting State. Thus, ICSID is an attempt to institutionalize dispute resolution
between states and non-state investors. It therefore always presents arbitration. Recourse
to ICSID conciliation and arbitration is entirely voluntary. But, once the parties have
consented to arbitration under the ICSID Convention, neither can unilaterally withdraw
its consent. 24 Disputes regarding jurisdiction (predicated upon disputes arising "directly
out of" an investment, between a contracting state and the national of another, and
written consent to submission), moreover, may be decided by the arbitration tribunal and
appealed to an ad hoc committee created from the panel of arbitrators by the
administrative council of the ICSID. Finally, all ICSID contracting states, whether or not
parties to the dispute, are required by the Convention to recognize and enforce ICSID

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arbitral awards. Pursuant to article 6(1)(a)(c) of the ICSID Convention, the ICSID
administrative council adopted regulations and rules supplementing the Convention's
provisions, generally referred to as the ICSID Regulations and Rules.”

Under the ICSID Arbitration rules, these rules will basically apply as a basic set of rules
for ICSID arbitration, together with the ICSID Convention. In brief these rules are:

Appointment of Arbitrators

The appointment of an arbitrator is governed by Rule 3. It states that ICSID invites the
parties to agree on the number of arbitrators and the procedure of their selection in the
absence of a prior agreement between the parties or established rules in the investment
treaty (Rule 2).

The number of arbitrators will range from one to any odd number. Otherwise, the parties
are free to use any practical form of appointment that meets their needs, including time
limits and special procedures. The parties may choose from the ICSID Panel of
Arbitrators to nominate arbitrators.

The Rules include a procedure for naming arbitrators as well as a timetable for doing so.
The Rules presume that the president of a three-arbitrator tribunal is chosen by
consensus of the parties (Article 37 and Rule 3). If the tribunal is not formed within 90
days of the case's registration, either party may request that the chair of the ICSID's
Administrative Counsel nominate the arbitrator who has yet to be appointed and
designate the tribunal's president (Rule 5). Certainly, the ICSID Convention and Rules
encourage parties to agree on a form of appointment and will adopt that method, which
may include the parties exchanging a list of candidates. The ICSID default procedure
would be used if the parties are unable to name any of the arbitrators, including the chair
of the tribunal.

Session of the Tribunal

Unless the parties accept differently (Rule 13(1)), the first session should take place
within 60 days of the tribunal's formation. After consulting with the tribunal's

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representatives and the ICSID Secretary-General, the president of the tribunal will set the
dates for that session. The tribunal's secretary will assist the tribunal in determining the
date by contacting the parties to determine their availability for the session.

The parties can choose any location for the first session as long as the tribunal approves
it and there are adequate facilities. The tribunal also suggests a place for the parties to
consider. If no consensus is reached, an in-person meeting will be held at ICSID's
headquarters in Washington, DC (Article 63 of the ICSID Convention and Rule 13(3)).
The World Bank's Washington, DC, or Paris, France, facilities are the most common
locations for the first session. Other World Bank locations can also be provided by
ICSID. ICSID has also established partnerships with a number of well-known arbitration
organisations. The initial meeting can take place in person, over the phone, or by
videoconference. To save time and money, a the number of first sessions are being held
over the phone or by videoconference.

The object of the tribunal's first session is to determine if the parties have reached an
agreement or have differing viewpoints on procedural issues such as the relevant
arbitration rules, the languages to be used, the venue of the trial, and the procedural
calendar. The tribunal will use the session to create a timetable and clear rules for each
case in a procedural order.

Unlike conventional commercial arbitration, the tribunal's secretary, who is appointed by

the Secretary-General (Administrative and Financial Regulation 25), will play a role in
the proceedings. The tribunal's secretary distributes a draught agenda agreed by the
tribunal to the parties for comment long before the first session. ICSID has created a
draught agenda that includes traditional procedural elements such as the procedural
calendar (Rule 20). A draught procedural order is often included with the agenda to
assist the parties in reaching agreements on particular issues.

If a party submits a request for bifurcation of the proceeding, temporary steps, or a

request to dispose of the matter because the argument is manifestly without legal merit,
the tribunal can allow oral submissions from either party at the first session.

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Based on the agreements reached and the procedural decisions made by the tribunal, the
president will issue a procedural order. Following the first session, the tribunal's
secretary would distribute the procedural order to the parties.

Oral Procedure
The oral process is based on the written submissions of the parties (Rule 29). 'Hearings'
and 'procedural sessions' make up the oral process. The majority of hearings take place
in person, but procedural meetings (such as the tribunal's first session) are often
conducted over the phone or by videoconference.

Opening statements, witness interview, expert examination, and closing arguments are
usually conducted in the following order: (1) opening statements, (2) witness
examination, (3) expert examination, and (4) closing arguments. A tribunal has the
authority to challenge lawyers, witnesses, and experts (Rule 32). The parties may agree
that no opening or closing statements are necessary, or that the closing statement is
replaced by post-hearing briefs.

The ICSID Convention and Rules do not have specific rules about how witnesses and
experts are investigated. While the Rules apply to general principles on Marshalling of
Evidence (Rule 33), Evidence: General Principle (Rule 34), Examination of Witnesses
and Experts (Rule 35), and 'Witnesses and Experts: Special Rules' (Rule 36), the ICSID
Convention and Rules do not have detailed rules on how witnesses and experts are
examined A group that wants to cross-examine a witness or expert calls the witness in
practice. Until testifying, fact witnesses and experts must sign a statement (Rules 35(2)
and (3)). Frequently, fact witnesses are not permitted to attend the hearing until after
they have given their testimony.

The tribunal will determine if the record of the proceedings will be held after soliciting
the parties' opinions (Rule 20(g)). ICSID usually holds audio records and written
transcripts of hearings in practice. In several cases, the parties request that the court
reporter prepare an electronic copy of the entire trial.

Grounds for Granting Requests for Provisional Measures

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In granting requests for provisional relief, ICSID tribunals have used a variety of
grounds, including preventing irreparable harm or injury, preventing aggravation of the
conflict, maintaining the tribunal's right to issue a final award, and enjoining concurrent
proceedings under Article 26 of the ICSID Convention. Provisional steps must also be
immediate and appropriate to maintain the status quo. Parties must show the
circumstances that necessitate such provisional steps, according to Rule 39(1). To claim
irreparable harm, for example, a party must show that the harm they caused cannot be
offset by damages. In order to display urgency, a party must show that the threatened
injury is likely to occur before a final award can be given.

Rendering the Award

The timely publishing of ICSID awards has become increasingly relevant as the number
of ICSID cases has increased, and many cases involving similar issues are still pending.
The ICSID amended rule 48 to make early publication of awards obligatory in order to
encourage timely publication of awards. The first sentence of revised rule 48(4) and
article 48(5) of the ICSID Convention state that ICSID may not publish an award
without the parties' consent. If ICSID does not have both parties' permission for the full
text of the award to be written, and it is not published by another source, ICSID must
publish extracts of the tribunal's legal findings as soon as possible. The relevant clauses
in article 53(3) of the Additional Facility Rules were also modified. In comparison, the
old rule 48 allowed, but did not mandate, ICSID to publish excerpts from the awards.
Furthermore, there was no provision for the timely publication of extracts from the key
holdings while ICSID awaited the approval of all parties before publishing an award,
which could take several months at times.

CONCLUSION

The issues unique to particular proceedings of the ICSID Administrative and Financial
Regulations concern mostly the roles of the Secretariat in administering the proceedings.
Something similarly institutional is the Organization Rules for ICSID, which regulate the
screening of the Convention's requests for conciliation and arbitration. As a
consequence, even though they were amended after the parties' consent to conciliation or

15
arbitration, the parties cannot agree to ignore the Administrative and Financial
Regulations or the Institutional Rules that apply to all cases brought under the
Agreement. On the other hand, the ICSID Rules of Arbitration and Conciliation are
mainly devoted to the establishment, and the presentation of their argument by the
parties of a conciliation commission or arbitral tribunal of both parties. The parties have
a significant freedom to agree on modifications of the Conciliation and Arbitration
Rules, in recognition of their ownership of the process, in Articles 33 and 44 of the
Convention. In accordance with Articles 33 and 34 of the Convention the Rules of
Conciliation or Arbitration applicable shall be those in force as of the date of the
agreement of the parties, unless the parties agree otherwise.

The vast majority of ICSID's workload, as mentioned earlier, has been made up of cases
brought before the Center under investment treaties with agreement from the States
concerned to arbitrate under the aegis of the Centre. This trend seems likely to continue
given the large and growing number of treaties with such consent. These consents to
arbits under the ICSID Convention are rarely included in the ICSID Arbitration Rules.
Unless they accept otherwise, in accordance with Article 44 of the ICSID Convention,
"the Rules of Arbitration applicable as of the date on which the party has consented to
arbitration." Nevertheless, in cases brought under the Treaty, consents of the parties
would have been usually given at different times—at the date of the Treaty and the
investor on or shortly before the Centre's sending. According to the ICSID Institution
Rule 2, the date of agreement shall be the date from which the second party acts.

The date of consent shall be the date the second party acts, as the parties gave their
consent on different days. After the ICSID Rules have been amended, arbitration
proceedings under investment treaties shall in general be subject to the rules, as
amended, even if amendments predate the Treaty, with the appropriate version of the
Rules specified by the date on the investor's consent. The Rules are not amended by the
Rules. In the sense of the investments treaties, however, States can be suspected of
having consented to various agreements, depending on the structure offered in certain
regulations and laws. In the case of the investments treaties, however, the parties cannot

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demand exemptions from changes to the ICSID Administering and financial regulations
or the ICSAD Institutional Rules based on their dates of agreement.

Arbitration institutions must balance the need for consistency with the need to update
and modernise when taking into account changes of rules, and particularly those as
successful as ICSID. The above points strongly warn against the shift, especially with
regard to ICSID. In addition, ICSID has an overarching duty to maintain the Convention
conformity that is, as already noted, hard to amend. However, after its inception 40 years
ago, since that paper tried to demonstrate it, ICSID continued to adapt its rules and rules
in order to meet the changing demands on the organisation.

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