September 23, 2011 World Bank Annual Meetings International Law Institute CSO Forum ICSID Arbitration Paul-Jean Le Cannu Counsel - ICSID

ICSIDIBRDIDAIFCMIGA International Centre for Settlement of Investment Disputes MISSION:  Provides facilities for conciliation and arbitration of international investment disputes International Bank for Reconstruction and Development MISSION:  Lends funds to governments of middle and low- income countries International Development Association MISSION:  Provides interest- free loans and grants to governments of poorest countries International Financial Corporation MISSION:  Provides loans, equity and technical assistance to stimulate private sector investment in developing countries Multilateral Investment Guarantee Agency MISSION:  Guarantees for investors in developing countries against non- commercial risk The World Bank Group 2 © 2011 by International Centre for Settlement of Investment Disputes. Content may be reproduced for educational use with acknowledgement.

Purpose of ICSID 3  Intent is to depoliticize disputes by offering a neutral international facility to resolve legal disputes between foreign investors and host States  In turn, this is designed to enhance investor confidence and contribute to increased international investment © 2011 by International Centre for Settlement of Investment Disputes. Content may be reproduced for educational use with acknowledgement.

ICSID Membership – 147 Members 4 © 2011 by International Centre for Settlement of Investment Disputes. Content may be reproduced for educational use with acknowledgement.

ICSID Structure  One representative of each Contracting State  One vote per State  Chair: President of the World Bank (no vote) FUNCTIONS  Adopt ICSID rules on financing, arbitration, and conciliation  Adopt annual budget  Determine conditions of service of Secretary- General and Deputy Secretary-General  Secretary-General  Staff of about 40 FUNCTIONS  Support Hearing Process  Training and Publications 5 ADMINISTRATIVE COUNCILSECRETARIAT © 2011 by International Centre for Settlement of Investment Disputes. Content may be reproduced for educational use with acknowledgement.

ICSID’s Role 6  Neutral Institution  ICSID does not decide disputes; The Tribunal does  ICSID provides administrative assistance throughout the arbitral proceedings © 2011 by International Centre for Settlement of Investment Disputes. Content may be reproduced for educational use with acknowledgement.

Steps in Process 7 © 2011 by International Centre for Settlement of Investment Disputes. Content may be reproduced for educational use with acknowledgement.

Number of Cases Registered by Calendar Year under the ICSID Convention and Additional Facility Rules © 2011 by International Centre for Settlement of Investment Disputes. Content may be reproduced for educational use with acknowledgement. 8

Geographic Distribution of All ICSID Cases by State Party Involved 9 The classification of the geographic regions above is based on the World Bank’s regional system, available at and also includes World Bank donor countries © 2011 by International Centre for Settlement of Investment Disputes. Content may be reproduced for educational use with acknowledgement.

State Parties in ICSID Cases registered in FY © 2011 by International Centre for Settlement of Investment Disputes. Content may be reproduced for educational use with acknowledgement.

Investors from developing States 11  Cases involving investors from developing countries represented around 25% of newly registered cases in FY 2011  Similar percentage in FY 2010 (around 25%)  Significantly higher than FY 2008 and 2009  Capital-importing countries have become exporters of capital  Increased number of South-South BITs © 2011 by International Centre for Settlement of Investment Disputes. Content may be reproduced for educational use with acknowledgement.

Basis of Consent Invoked to Establish ICSID Jurisdiction in Registered ICSID Cases 12 © 2011 by International Centre for Settlement of Investment Disputes. Content may be reproduced for educational use with acknowledgement.

Arbitrators, Conciliators and ad hoc Committee Members Appointed in ICSID Cases – Distribution of Appointments by Geographic Region 13 The classification of the geographic regions above is based on the World Bank’s regional system, available at and also includes World Bank donor countries © 2011 by International Centre for Settlement of Investment Disputes. Content may be reproduced for educational use with acknowledgement.

14 Appointments by nationality in ICSID Cases in FY 2011 © 2011 by International Centre for Settlement of Investment Disputes. Content may be reproduced for educational use with acknowledgement.

Distribution of Party and ICSID Appointments by geographic region 15 The geographical classification is based on the World Bank’s regions as set forth at and also includes World Bank donor countries. © 2011 by International Centre for Settlement of Investment Disputes. Content may be reproduced for educational use with acknowledgement.

OUTCOMES – Original Proceedings Arbitration Proceedings under the ICSID Convention and Additional Facility Rules 16 © 2011 by International Centre for Settlement of Investment Disputes. Content may be reproduced for educational use with acknowledgement.

OUTCOMES – Original Proceedings Disputes Decided by Arbitral Tribunals under the ICSID Convention and Additional Facility Rules 17 *Pursuant to ICSID Arbitration Rule 41(5) and Article 45(6) of the Arbitration (Additional Facility) Rules, as adopted by the ICSID Administrative Council in 2006, a party may at an early stage of the proceeding file an objection that a claim is manifestly without merit. If the Tribunal decides that the claims are manifestly without legal merit, it shall render an award to that effect. © 2011 by International Centre for Settlement of Investment Disputes. Content may be reproduced for educational use with acknowledgement.

OUTCOMES - Annulment I 18  Annulment procedure is not an appeal procedure  Limited list of five grounds:  Tribunal was not properly constituted;  Tribunal manifestly exceeded its powers;  Corruption on the part of a member of the Tribunal;  A serious departure from a fundamental rule of procedure; or  Award has failed to state the reasons on which it is based.  Request the invalidation (not the modification) of the Award

OUTCOMES – Annulment II Awards Rendered and Outcomes in Annulment Proceedings under the ICSID Convention, by Decade: 19 © 2011 by International Centre for Settlement of Investment Disputes. Content may be reproduced for educational use with acknowledgement.

OUTCOMES - Annulment III Convention arbitration cases registered 139 Convention awards rendered 47 annulment proceedings registered 18 decisions rejecting the application 9 proceedings discontinued 6 awards annulled in full 5 awards annulled in part © 2011 by International Centre for Settlement of Investment Disputes. Content may be reproduced for educational use with acknowledgement.

Transparency 21  2006 Amendments to the ICSID Arbitration Rules Open hearings Non-disputing parties’ submissions (Amicus) Publication of excerpts of legal reasoning  ICSID Website  Objective: furthering awareness and development of international investment law  Benefits for States in terms of program and BIT design © 2011 by International Centre for Settlement of Investment Disputes. Content may be reproduced for educational use with acknowledgement.

ICSID 22 International Centre for Settlement of Investment Disputes 1818 H Street Washington, D.C U.S.A