Suspension, Settlement, and Discontinuance - ICSID Convention Arbitration (2022 Rules)

The proceeding may be suspended or discontinued by agreement of the parties or upon the request of a party (Arbitration Rules 54-56). Proceedings may also be discontinued if the parties fail to act (Arbitration Rule 57) or to pay the requested advances on costs (ICSID Administrative and Financial Regulation 16) .

 Suspension (Arbitration Rule 54)

The parties may agree to suspend the proceeding at any time (Arbitration Rule 54(1) and (7)) and may agree to extend the suspension as needed (Arbitration Rule 54(5)). They should notify the Tribunal or the Secretary-General (if the Tribunal has not yet been constituted or if there is a vacancy on the Tribunal) of the period of suspension and any agreed terms, including any necessary changes to the procedural calendar once the proceeding resumes. The Tribunal will incorporate these terms into an order (Arbitration Rule 54(4)).

The Tribunal may also suspend the proceeding or extend an existing suspension upon the request of a party or on its own initiative (Arbitration Rule 54(2) and (6)), after giving both parties an opportunity to make observations.

Settlement and Discontinuance (Arbitration Rule 55)

At any time before the Award is rendered, parties may jointly request that the Tribunal discontinue the proceeding if they settle the dispute or for any other reason. The Tribunal (or the Secretary-General if the Tribunal is not yet constituted) can issue an order taking note of the discontinuance of the proceeding (Arbitration Rule 55(1) and (3)). Alternatively, the parties can ask the Tribunal to render an Award embodying the settlement agreement (Arbitration Rule 55(2)(b)). If so, the parties must file the full and signed text of their settlement agreement.

Discontinuance at Request of a Party (Arbitration Rule 56)

If one party requests the discontinuance of the proceeding, the other party will be invited to state whether it agrees with the discontinuance (Arbitration Rule 56). If that party objects, the proceeding will continue. However, if that party agrees or does not object within the fixed time limit, the party will be presumed to have consented to the discontinuance.  Accordingly, the Tribunal or the Secretary-General will issue an order taking note of the discontinuance of the proceeding.

Discontinuance for Failure of Parties to Act (Arbitration Rule 57)

Failure to act in a proceeding may lead to the discontinuance of the proceeding. If the parties fail to take any procedural step for more than 150 consecutive days, they will be notified of the time elapsed and given 30 days to take action to avoid discontinuance  (Arbitration Rule 57(1) and (3)). If neither party takes any action to continue the proceeding within the 30 days, the Tribunal or the Secretary-General will issue an order of discontinuance (Arbitration Rule 57(2) and (4)).

This rule does not apply if a suspension of the proceeding has been agreed upon under Arbitration Rule 54.

Discontinuance for Lack of Payment of Required Advances (ICSID Administrative and Financial Regulation 16)

Except in annulment proceedings, both parties are responsible for paying the advances to meet the costs of the proceeding unless the parties agree otherwise (Administrative and Financial Regulation 15(1)). Failure to do so may lead to the discontinuance of the proceeding.

If the amounts requested are not paid in full within 30 days of a request, the Secretary-General informs both parties of the default and gives either of them an opportunity to make the outstanding payment (Administrative and Financial Regulation 16(2)(a)).

If any part of the required payment remains outstanding 15 days after notice of default is given, the Secretary-General may suspend the proceeding until payment is made, after giving notice to the parties and the Tribunal (Administrative and Financial Regulation 16(2)(b)).

If any proceeding is stayed for non-payment for more than 90 consecutive days, the Secretary-General may discontinue the proceeding, after giving notice to the parties and the Tribunal (Administrative and Financial Regulation 16(2)(b)).

Effect of the Discontinuance

An order taking note of the discontinuance of a proceeding does not dispose of the claims raised by the parties on their merits.  The claims can therefore be raised again in subsequent proceedings.

An Award embodying the parties’ settlement agreement pursuant to Arbitration Rule 55(2)(b) is an Award under Article 53(1) of the ICSID Convention for the purposes of recognition and enforcement.