The International Centre for Settlement of Investment Disputes (ICSID), – the Washington-based arbitration institution operating under the auspices of the World Bank for the resolution of disputes that may arise between States and foreign investors regarding the treatment of transnational investments – has issued on 3 August 2018 proposals for comprehensive changes to modernize its arbitration rules. It is the fourth time ICSID rules are being amended, and the current process started in October 2016 when the ICSID Secretariat invited member States to suggest topics that deserved consideration. Meg Kinnear, ICSID Secretary-General, stressed on 3 August 2018 that the proposed amendments ‘are an important milestone in ensuring that the ICSID rules continue to provide States and investors with a range of modern dispute settlement options’.
The proposed amendments, which have been detailed in a 996-page Working Paper issued by ICSID on 2 August, would:
• Reduce the time and cost of arbitration by making all filing electronic, introducing new timelines for various procedural steps, and offering an optional expedited arbitration process;
• Make case law more transparent with proposals for the publication of awards, decisions and orders;
• Enhance disclosure of potential conflicts of interest by arbitrators;
• Oblige disputing parties to declare third party funding as soon as a case is registered. Arbitrators would also need to disclose whether they have any relationship to the funder. The rationale for this measure, according to the Working Paper, is the need to mirror recent rules adopted by the main arbitration institutions worldwide to address potential issues related to conflict of interest ‘when an undisclosed entity provides TPF to a party in arbitration. This conflict could arise in various circumstances, for example, if an arbitrator provides due diligence opinions at the request of a funder or an arbitrator serves on the board of a funder. Absent disclosure, parties and arbitrators may be unaware of such conflicts, which could affect the integrity of ISDS and could give rise to challenges that delay the proceedings’.
It is to be noted that the proposals also include a new set of mediation rules.
ICSID Member States are meeting on September 26-27, 2018, in Washington, D.C., to discuss the proposed amendments. States and the public are also invited to submit written comments on the proposals until December 28, 2018.
Amendments to the ICSID rules require the approval of two-thirds of ICSID Member States.
Sources: ICSID website.