Following invitations to ICSID member States and the public to submit topics for potential review, ICSID has published a paper on the Rules Amendment Process. The paper lists sixteen topics which are to be canvassed in the next stage of the review. The topics include areas of arbitral practice which have been subject to much broader discussion – such as the disclosure of third party funding (a point picked up in the SIAC Investment Arbitration Rules which took effect earlier this year), and the possible introduction of a code of conduct for arbitrators. Also included for review are aspects of the procedure, such as consolidation, the annulment mechanism, the preliminary objections process and the possible publication of decisions and orders. Further, ICSID will consider security for costs and allocation of costs.
Each of the sixteen topics will be addressed by ICSID in background papers to be published in early 2018. The goal of the amendments is to (i) incorporate lessons learnt from case law; (ii) to make the process increasingly time and cost effective whilst maintaining due process and a balance between investors and States, and (iii) make the procedure less paper-intensive.
ICSID has recognised in its paper that the Rules Amendment Process provides an opportunity to ensure that the Rules keep pace with the rapid developments in investment law and arbitration in the last two decades. Also of note are ICSID's indication that it intends to "highlight improvements that could be effected through a practice change, rather than a rule amendment, and to adopt such changes" and its reflection that some of these choices may be left to states to adopt in their own treaties in accordance with their own policy preferences. Depending on the scope of the matters left to be dictated by states, this approach may assist ICSID in ensuring the ongoing prominence of ICSID procedure in the future of investor-state dispute resolution. ICSID also notes that the Rules Amendment Process may flush out issues which would require changes to the ICSID Convention – such changes are not part of this Process but could be contemplated if consensus were to emerge during the discussion.
As noted in ICSID's paper, ICSID has amended its rules on a number of occasions. However, this time it does so against the backdrop of increased public engagement with the subject of investor-state dispute resolution over the last few years. In particular, the system has received vociferous criticism in the context of the negotiation of high profile trade agreements. The topics under consideration by ICSID provide scope for significant changes to the ICSID arbitration process, potentially leading to a substantive impact on states and investors alike. The extent of this impact will be more discernible when the background papers are published and we look forward to commenting on these in due course.
For more information, please contact Laurence Shore, Partner, Christian Leathley, Partner, Andrew Cannon, Partner, Iain Maxwell, Of Counsel, Hannah Ambrose, Professional Support Consultant, Vanessa Naish, Professional Support Consultant or your usual Herbert Smith Freehills contact.