Marking a major milestone in the five-year long process of modernizing ICSID’s flagship rules for resolving international investment disputes, the Centre submitted resolutions on the amended rules to the Administrative Council—ICSID’s governing body—for a vote of approval on January 20, 2022.
Amendments to the ICSID Convention Arbitration and Conciliation Rules, as well as the Administrative and Financial Regulations and Institution Rules, require the approval of two-thirds of the Administrative Council. A majority of the votes cast is needed to adopt the amended Additional Facility Rules for Arbitration and Conciliation Proceedings, and the standalone rules for Fact-Finding and Mediation.
ICSID Member States are expected to cast a vote on the amended rules by March 21, 2022. If approved, the updated rules would go into effect on July 1, 2022.
The proposed amendments are the most wide-ranging in ICSID’s 55-year history. They reflect extensive dialogue with ICSID’s membership and the public, with proposals advanced in a series of six working papers released over five years.
ICSID set out to streamline its procedural rules, making for a more user-friendly and efficient dispute resolution process. The updated rules also incorporate topics that Member States and the public raised during the consultative period—including greater transparency in the conduct and outcome of proceedings, new disclosure requirements for third-party funding, and expedited arbitration rules for parties wishing to further shorten the procedural calendar.
An entirely new set of Mediation Rules and Fact-Finding Rules expand the choice of dispute resolution procedures available to States and investors. Access to ICSID’s procedural rules and administrative services has also been broadened. ICSID Mediation and Fact-Finding will be available for all matters related to an investment involving a State, based on consent.
Similarly, the jurisdictional requirements under the Additional Facility Rules for Arbitration and Conciliation have been relaxed—with the goal of making ICSID rules and services more widely available based on the parties’ consent. Under the amended rules, neither the State nor investor is required to be an ICSID Member State or a national of one. Regional Economic Integration Organizations—such as the European Union—may also access ICSID arbitration and conciliation under the amended Additional Facility Rules.
ICSID is an international facility available to States and foreign investors for the resolution of investment disputes. Established in 1966 by the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (the ICSID Convention), it is the only global institution dedicated to international investment dispute settlement.
Through its specialized rules of procedure, world-class facilities, and expert legal and administrative support, ICSID provides unparalleled dispute resolution services to States and investors. Since the first case was registered with ICSID in 1972, the majority of all known international investment disputes have been administered by ICSID.
About the Amended Rules
The ICSID Convention Rules and Regulations were adopted in 1967, and the Additional Facility Rules were adopted in 1978. The ICSID rules establish procedures for arbitration, conciliation, fact-finding, and mediation. These are the only rules of procedure that have been specifically designed for disputes between foreign investors and their host States.
To date, the ICSID rules and regulations have been amended three times—the most recent in 2006. ICSID launched the current—and fourth—amendment process in October 2016. It has been the most transparent and collaborative process in ICSID’s history. The ICSID rules comprise:
- Administrative and Financial Regulations. These deal with the procedures of ICSID’s governing body, the Administrative Council; the functions of the ICSID Secretariat; and the finances of ICSID and the ICSID Convention cases it administers.
- Institution Rules. These address the initiation of arbitration and conciliation under the ICSID Convention. They apply to the period between filing a request for arbitration or conciliation to the dispatch of the notice of registration.
- Arbitration and Conciliation Rules under the ICSID Convention. The procedural rules for arbitration and conciliation under the ICSID Convention may be used to settle disputes between an ICSID Contracting State—States that have signed and ratified the ICSID Convention—and nationals of another Contracting State. The rules benefit from a robust enforcement mechanism, as Contracting States agree that an ICSID Convention award will be treated as a final judgement of their courts. This is a unique feature of arbitration under the ICSID Convention.
- Arbitration and Conciliation under the ICSID Additional Facility. The Additional Facility (AF) Rules for Arbitration and Conciliation were introduced in 1978. They are largely the same as the rules under the ICSID Convention but have different jurisdictional requirements.
- Fact-Finding Rules. The proposals include a stand-alone set of rules for fact-finding, which offer the opportunity to constitute a Committee to make objective findings of fact that could resolve a legal dispute between the parties.
- ICSID Mediation Rules. ICSID has also developed new, stand-alone, mediation rules, allowing parties to pursue a mediated resolution of all—or part—of a dispute with the assistance of a mediator.
Further information on the ICSID rule amendment process—including Working Papers and the input received on them—is available on the ICSID website at https://icsid.worldbank.org/resources/rules-amendments