A Brief History of Amendment to the ICSID Rules and Regulations

ICSID’s rules have evolved since they first took effect in 1968. These changes reflect a continuous effort to modernize and improve the rules, and have included pioneering developments in areas such as transparency, third-party participation, and a procedure to decide at an early stage whether a claim manifestly lacks legal merit.

As ICSID is focused on the latest—and most comprehensive—review of the rules to date, this article looks back at previous amendments to the rules.

Amendments of the 1970’s

A few changes were made to the Administrative and Financial Regulations in the 1970’s. For example, the rules initially provided for the Chair of the ICSID Administrative Council (who is also the President of the World Bank Group) to preside over the Council’s annual meeting. In 1970, however, a rule was added to allow a “temporary presiding officer” to assume this role. This was a practical consideration, given that the Administrative Council meets at the same time as the annual meeting of the World Bank governors.

In 1975, adjustments were made to the regulation of the payment of fees to ICSID arbitrators and conciliators. Initially, a tiered system was in place, providing one rate for days in which arbitrators or conciliators were in meetings, and a second, lower fee for other types of work. The new Administrative and Financial Regulation 13(1) provided for a flat daily rate, irrespective of whether it was for meetings or other work connected to a proceeding.

Additional Facility Rules of 1978

In 1978, the ICSID Additional Facility was created to offer arbitration, conciliation, and fact-finding services for certain disputes that fall outside the scope of the ICSID Convention (further details on the Additional Facility are available here). The Additional Facility Rules have been amended three times, first in 1984, and again in 2003 and 2006. Amendments to these rules are also under consideration in the current amendment process

Amendments of 1984

The next round of amendments was approved by the Administrative Council in 1984 and marked the first time that the ICSID Arbitration Rules were changed. Thus far, ICSID had administered twenty cases, and so had gained some experience in how the arbitration rules performed in practice. This experience was reflected in the new Arbitration Rule 21 on pre-hearing conferences, which could be employed to clarify facts and facilitate a settlement. At this point, most cases submitted to ICSID had been discontinued or settled, and pre-hearing conferences were intended to provide further opportunities for parties to resolve their dispute amicable and quickly.

Arbitration Rule 39(5) was introduced to clarify whether and how provisional measures may be sought from national courts. Under the ICSID Convention, parties may not seek provisional measures other than those recommended by the tribunal, unless they otherwise agree. The updated Arbitration Rule 39 therefore made clear that—should the parties wish to seek provisional measures from a domestic court—this must be expressly provided for in their instrument of consent to ICSID arbitration.

A revision to Arbitration Rule 48(4) concerned the publication of information about Awards. While the ICSID Convention requires the parties’ consent to publish Awards, the Secretariat was also aware that providing publicly available information on Awards was important for the development of international investment law. The ICSID Administrative Council agreed, and the revised rules permitted the Secretariat to publish excerpts of the legal rules applied by tribunals.

The 1984 revisions also revisited the fees paid to arbitrators and conciliators. Under the new Financial Regulation 14, the Secretary-General was allowed—with approval by the Chair of the Administrative Council—to periodically determine the applicable rate of the fees. Financial Regulation 14 also provided for ICSID to request payments from the disputing parties to cover costs associated with the case in three to six-month periods. It also provided that in annulment proceedings such advance payments were the sole responsibility of the party requesting the annulment, subject to the annulment committee’s final decision on the apportionment of costs.

Finally, the amendments of 1984 included a variety of changes to simplify the rules—essentially to make them more user-friendly. This is an effort that has continued throughout the subsequent updates to the rules.

Amendments of 2003

The next round of amendments came into force in 2003. The ten-year period that had passed since the previous amendment was an important one in ICSID’s history, as it coincided with the first cases to be brought under investment laws and treaties. Prior to 1984, State consent to ICSID arbitration had only been provided for in contracts. However, as States entered into an increasingly broad network of investment treaties throughout the 1990s and subsequent decades, these became the dominant source of their consent to resolving disputes at ICSID. These treaties also had a significant impact on ICSID’s caseload.

The largest number of changes introduced in 2003 concerned the Additional Facility Rules. These rules had not been changed since they were created in 1978, and it had become evident that there were unnecessary differences in language amongst the Convention’s arbitration and conciliation rules, and those of the Additional Facility. A goal of the 2003 amendments, therefore, was to iron out any needless variances in terminology.

The process of clarifying and simplifying the rules also continued. For example, Arbitration Rule 1(3) was amended to explain more clearly that a party could only appoint a co-national to the Tribunal if the other party to the dispute agreed. Revisions to the Institution Rules were introduced to clarify that corporate claimants needed to provide evidence that all internal steps authorizing the submission of the request for arbitration were taken, and to make it clear that the registration of the case by the Secretary-General was without prejudice to the powers of the tribunals to determine all matters of jurisdiction and the merits of the dispute.

Amendments of 2006

On the heels of the 2003 amendments, ICSID initiated a period of consultation on future improvements to its rules. A Discussion Paper published in 2004 by the Secretariat suggested a number of possible areas where the rules could be changed, and invited States, business and civil society groups, and legal professionals to provide feedback on them. The questions raised included:

• Should there be an expedited process for the tribunal to decide whether to dismiss all or part of a claim?
• Should the ICSID Secretariat be required—not just authorized—to publish excerpts of all Awards?
• Should the rules give tribunals authority to accept submissions from third parties?
• Should the disclosure requirements of arbitrators be broadened and made an ongoing obligation throughout the entire proceeding?

The possibility of establishing international appellate procedures for investment treaty arbitrations was also raised. The Discussion Paper noted that a number of States had already signed investment treaties that included provisions on an appeals mechanism for investor-State disputes, and that a single appeals mechanism offered by ICSID may be more efficient and coherent than multiple mechanisms. However, following further consultation with Member States, ICSID ultimately concluded that it seemed premature to set up such an appellate system.

Much of what was proposed in the 2004 Discussion Paper was taken forward in the Secretariat’s 2005 Working Paper and ultimately in the revised rules of 2006. Arbitration Rule 41(5) introduced the possibility for a respondent to obtain an early dismissal of a case due to manifest lack of legal merit. Arbitration Rule 48(4) required the Secretariat to publish legal excerpts from Awards as soon as possible. Arbitration Rule 37(2) made clear that tribunals have the authority to accept submission from third parties. And Arbitration Rule 6(2) strengthened disclosure requirements for arbitrators. These amendments were also reflected in the amended Additional Facility Arbitration Rules.

Current Amendment Process

The latest rule amendment process began in late 2016. As a first step, ICSID invited Member States to suggest topics to be considered as part of the rule amendment, and issued a similar invitation to the public in January 2017. In November 2017, ICSID also published a survey on recovery of costs by States, to inform discussion on amendment of rules related to costs.

The Secretariat received numerous detailed comments, and has subsequently published two Working Papers (the first in August 2018, and the second in March 2019) that proposed specific changes to the rules. Among the topics being addressed in the proposals are addressing the time and cost of proceedings, enhancing transparency, and introducing disclosure requirements for the name of third-party funders.

The proposed changes to the rules in Working Paper # 1 and # 2, as well as State and public comments on the proposals, and supporting materials, are available in English, French and Spanish at:

https://icsid.worldbank.org/en/amendments
https://icsid.worldbank.org/fr/amendments
https://icsid.worldbank.org/sp/amendments