A newly published report by the ICSID Secretariat provides an in-depth look at compliance with and enforcement of awards rendered under the ICSID Convention.  

The report includes a study of awards with pecuniary obligations—i.e., damages and/or costs awarded to a party—rendered as of December 31, 2021. ICSID was able to collect information for 231 awards (91% of all damages and costs awards during the relevant period). It is the most comprehensive study exclusively focused on ICSID Convention awards.

The study finds that the vast majority of awards are satisfied, either through compliance, settlement, or enforcement.

Under the ICSID Convention, awards are final and binding on the parties. They are not subject to appeal or any other remedy except those provided for in the Convention (See ICSID’s Background Paper on Annulment for information on annulment and other post-award remedies under the ICSID Convention). 

If a party fails to comply with an award, the other party can seek enforcement in the courts of any ICSID Member State as though it were a final judgment of that State’s courts. The Convention does not provide for any grounds to refuse enforcement such as those contained in the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention). This enforcement regime is unique to arbitrations under the ICSID Convention.  

The ICSID study features a review of 124 publicly available domestic court decisions and orders that relate to enforcement, which are categorized by jurisdiction in an annex. This caselaw shows that an overwhelming majority of courts recognize and enforce ICSID awards.

ICSID’s Background Paper on Compliance with and Enforcement of ICSID Awards also provides insights into the drafting history of the Convention’s provisions on recognition and enforcement of awards, and a detailed explanation of how the enforcement mechanism works in practice. 

“The key takeaway is that the ICSID Convention’s compliance and enforcement regime is highly effective,” said Martina Polasek, ICSID Secretary-General Elect. “It is important for the continued effectiveness of the system that States and investors voluntarily comply with awards and that domestic courts enforce them.”