Key Differences and Similarities between Arbitration and Conciliation at ICSID

There are certain structural similarities between ICSID arbitration and conciliation, and also notable differences.


There are two key differences between ICSID conciliation and arbitration: (a) the powers and functions of the conciliation commission differ from those of an arbitral tribunal, and (b) the content of the final instrument issued by each body and its legal effect are different.

Powers and functions

A conciliation commission’s function is to clarify the issues in dispute between the parties and to assist the parties in reaching a mutually acceptable resolution of all or part of the dispute (Article 34 of the ICSID Convention, Conciliation Rule 24, Additional Facility Conciliation Rule 32).

To exercise that function, the conciliation commission may communicate with the parties jointly or separately, request explanations and visit any place connected with the dispute (Conciliation Rule 24(4), Additional Facility Conciliation Rule 32(4). The commission may make oral or written recommendations to the parties at any stage of the proceeding, including specific terms of settlement or that the parties refrain from taking specific action that might aggravate the dispute while the conciliation is ongoing (Article 34(1) of the ICSID Convention, Conciliation Rule 24(2), Additional Facility Conciliation Rule 32(2)).

By contrast, the role of an arbitral tribunal is to decide a dispute on the basis of the applicable law (Article 42(1) of the Convention). In making this decision, the tribunal determines the admissibility and probative value of evidence adduced by the parties (Arbitration Rule 36(1), Additional Facility Arbitration Rule 46(1)), and decides any other disputed issues in the course of the proceeding; for example, an objection by a party that the claim is manifestly without legal merit (Arbitration Rule 41((1), Additional Facility Arbitration Rule 51(1)); disputes about document production (Arbitration Rule 37, Additional Facility Arbitration Rule 47); or decisions relating to the allocation of costs of the proceeding (Arbitration Rule 52, Additional Facility Arbitration Rule 62).

Content and effect of final instrument

With regard to the second key difference between arbitration and conciliation, the final instrument in an ICSID conciliation is called a “Report,” whereas an arbitral tribunal will issue an “Award.”

Unlike an arbitral Award in which a tribunal must decide all questions submitted to it, a conciliation Report notes the issues in dispute and records that the parties have reached an agreement or that the parties have not reached an agreement and that there is no likelihood of resolution or that a party has failed to appear or participate in the conciliation (Article 34(2) of the Convention, Conciliation Rule 35 to 37, Additional Facility Conciliation Rule 43 to 45). The contents of a conciliation Report include:

  1. a precise designation of each party
  2. the names of the parties’ representatives
  3. a description of the conciliation commission’s composition and the method of its constitution
  4. a brief summary of the proceeding
  5. a statement of the costs of the proceeding
  6. a statement relating to the use of information obtained during the conciliation
  7. if requested by the parties, the complete and signed text of the parties’ settlement agreement.

Other differences: default method, conduct, costs, confidentiality, use of information

In addition to these principal differences, there are other notable procedural differences between conciliation and arbitration.

For example, if the parties do not agree on the number of conciliators and the method of their appointment, the default mechanism in conciliation must be invoked by way of a request of a party the parties (Conciliation Rule 13, Additional Facility Conciliation Rule 22). On the other hand, in ICSID arbitration, the default mechanism automatically applies without any need to invoke the default mechanism (Arbitration Rule 15(2), Additional Facility Arbitration Rule 24(2)).

In conciliation, the Commission has no authority to decide on costs (Article 61(1) of the Convention, Conciliation Rule 8, Additional Facility Conciliation Rule 16).

The without prejudice provision in Article 35 of the Convention (also reflected in Conciliation Rule 10 and Additional Facility Conciliation Rule 18) specifies that, unless agreed otherwise by the parties, no party may rely on or invoke any views, statements, admissions, or settlement offers made by the other party during a conciliation. There is no corresponding provision related to arbitration in the Convention or the arbitration rules.

Finally, in terms of confidentiality, the ICSID conciliation framework provides in Conciliation Rule 9 and Additional Facility Conciliation Rule 17 that all information relating to the conciliation and all documents generated in or obtained during the conciliation are confidential, unless:

  • the parties agree otherwise
  • the information or document is independently available
  • disclosure is required by law, or
  • the information is to be published by ICSID under the administrative and financial regulations.

By contrast, Chapter X of the Arbitration Rules provides a detailed framework regarding the publication of instruments issued in the course of an arbitration.


Notwithstanding these differences, conciliation and arbitration have structural similarities, to name a few: