Investor-State Mediation

As the world’s leading institution devoted to international investment dispute settlement, ICSID supports investor-State mediation though the provision of services to parties, the development of rules of procedure for mediation, and the organization of events and training courses.

Mediation Services

ICSID supports efforts by parties to resolve investment disputes through mediation at all stages of a dispute. It provides its facilities and administrative services, including a dedicated staff team which assists the parties and the mediator(s) throughout the process. ICSID administrative assistance may include identifying qualified mediators, facilitating communication between the parties and the mediator, handling all aspects related to the organization of joint or separate mediation sessions, and managing the finances of the process. ICSID is in the unique position to offer state-of-the-art conference facilities at the World Bank Group’s offices around the world. Parties to mediation proceedings are free to select the services desired. For further information, contact us at [email protected].

ICSID’s Proposed Mediation Rules

In 2018, ICSID began work on a new set of mediation rules. As part of a broader effort to update and further modernize the Centre’s procedural rules for resolving investment disputes, these will be the first institutional mediation rules designed specifically for investment disputes. The mediation rules complement ICSID’s existing rules for arbitration, conciliation and fact-finding, and may be used either independently of, or in conjunction with, arbitration or conciliation proceedings. Once approved by ICSID Member States, their availability will assist Member States to implement their international investment agreement provisions offering investment mediation. The latest draft of the Mediation Rules can be found in Working Paper #5: Proposals for Amendment of the ICSID Rules.

Capacity Building

As part of its efforts to increase knowledge about investor-State mediation, ICSID has co-organized a series of events on investment mediation, including webinars and conferences.

Each year ICSID also organizes a three-day course for experienced mediators and government officials. The course gives investor-State dispute resolution practitioners and experienced mediators knowledge of the context, framework and practice of investor-State disputes, and provides participants with the skills to effectively mediate investment disputes. To date, the course has been held in Paris, Washington and Hong Kong.

Members of the ICSID Secretariat also recently conducted a series of recorded interviews with experts to seek their perspectives on investor-State mediation. These offer practical advice and experience on the subject.

Frequently asked Questions

What is investor-State mediation?

Mediation offers a party-driven approach to dispute settlement. The mediator's role is to facilitate the parties' negotiations, for example, by helping each party to identify its interests, overcome barriers to settlement, and develop possible settlement options with the parties. Mediation is entirely voluntary and typically based on a written mediation agreement between the disputing parties.

The concept of finding amicable solutions through negotiations is not new: it is found in many multilateral investment treaties, often referred to as the "amicable settlement period" or "cooling-off period". For example, Article 10.15 of the Central American Free Trade Agreement states that "the claimant and the respondent should initially seek to resolve the [investment] dispute through consultation and negotiation, which may include the use of non-binding, third-party procedures such as conciliation and mediation." Article 26 of the Investment Agreement for the COMESA Common Investment Area requires a six-month cooling off period, during which the parties "shall seek the assistance of a mediator of non-disputing parties.” Mediation typically commences with a joint opening session, followed by written statements and meetings amongst the parties and the mediator(s) and/or separate meetings between the mediator and each party. The IBA Investor-State Mediation Rules provide a legal framework specifically designed for mediation in the investor-State context, offering a helpful starting point for parties interested in pursuing investment mediation.

When should parties use mediation?

Parties may choose mediation as a standalone process, or in connection with an arbitration, either prior to, during or following the arbitration proceeding. As noted, a mediation procedure is required by some multilateral treaties prior to the institution of an arbitration proceeding. However, mediation may also be conducted in parallel with an ICSID arbitration proceeding, provided that the parties agree in writing. In practice, the arbitration is likely to be stayed pursuant to a party agreement while the mediation is ongoing. Hence, it is largely in the hands of the parties to decide at what point a mediation could assist in settling some or all aspects of their dispute.

What is the outcome of a mediation?

Unlike an arbitrator, a mediator does not resolve the parties' dispute through a binding decision. Instead, the mediator assists the parties in finding customized settlement options, which may involve the payment of compensation or other actions to be taken by the parties pursuant to their settlement agreement. Ultimately, the parties decide whether to enter into a settlement agreement, and define the scope of such settlement and its terms. Should the parties reach an amicable settlement through mediation, this may be incorporated into a tribunal award pursuant to ICSID Arbitration Rule 43(2). The settlement would then benefit from the simplified enforcement mechanism that is unique to the ICSID Convention.