Default - ICSID Convention Arbitration (2022 Rules)

A party is in default if it fails to appear or present its case or indicates that it will not appear or present its case (Arbitration Rule 49). 

If a party is in default at any stage of the proceeding, the other party may request that the Tribunal address the questions submitted to it and render an Award (Article 45(2) of the ICSID Convention; Arbitration Rule 49(2)). 

When such a request is filed, the Tribunal must notify the defaulting party and grant a grace period to cure the default, unless it is satisfied that the defaulting party does not intend to appear or present its case. The grace period must not exceed 60 days without the consent of the other party (Arbitration Rule 49(3)). The defaulting party cannot invoke the default procedure to seek a period of grace; the procedure can only be triggered on request by the other party.

The grace period can apply in different ways depending on whether the default relates to a hearing or another procedural step. In the case of hearing, the Tribunal may reschedule the hearing within 60 days or cancel the hearing. It may also proceed with the hearing without the defaulting party. If it cancels or proceeds with the hearing, it must allow the defaulting party the opportunity to file a written submission within 60 days (Arbitration Rule 49(4)). For all other procedural steps, the Tribunal fixes a new time limit for the defaulting party to complete that step within 60 days (Arbitration Rule 49(5)).

A default is not deemed an admission of the other party’s assertions on jurisdiction or the merits (Article 45(1) of the ICSID Convention), and the Tribunal must decide on jurisdiction and competence before ruling on the merits of the claim in the Award (Arbitration Rule 49(6)).

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