[1.] Order the Claimant and/or Mr. Marshall personally to post security in the amount of £1,500,000, to be deposited into an escrow account or provided as an unconditional and irrevocable bank guarantee within 14 days of the Tribunal's order;
[2.] Order that the posting and maintenance of such security be a condition to continuation of the arbitration, to ensure the payment of any ultimate costs award made against the Claimant;
[3.] Order the Claimant to pay all costs in respect of the Respondent's Request; and
[4.] Grant any further relief to Rwanda as it may deem appropriate.22
In each of those cases, the tribunals held that it had jurisdiction to make the Order sought,59 pursuant to Article 47 of the ICSID Convention and Rule 39 of the ICSID Arbitration Rules. The Claimants implicitly accept that in this case the Tribunal has jurisdiction to make the Order sought.60 They are right to do so. This Tribunal endorses the detailed reasoning on the point in RSM.
Further in both Herzig and RSM, the tribunals held that an applicant must demonstrate "exceptional circumstances" if an order for security for costs is to be justified.61 This Tribunal endorses that principle. It has been accepted by the Respondent.62 In his Assenting Reasons in RSM, Dr. Gavan Griffith commented that
the risk to a State of a self-identifying investor claimant under a BIT having no funds to meet costs orders is inherent in BIT regimes. As a general proposition it may be said that a State party to a BIT has prospectively agreed to take claimant foreign investors as it finds them.63
The Tribunal considers that there is force in that observation. The fact that no application for security for costs in an ICSID arbitration had succeeded prior to RSM underlines the fact that the regime is one where such orders must be justified by exceptional circumstances.
Applications for security for costs should be made promptly, that is, as soon as the risk or facts giving rise to the application are known or ought to have been known. Arbitrators should consider whether an application has been made at an appropriate time. If the application is made after significant expense has been incurred, they may consider that this unfairly disadvantages the other party and refuse the application unless there is a good reason for delay.65
This makes sound sense. The Tribunal accepts the Claimants' proposition on this point.
Taking great care not to prejudge or predetermine the merits of the case itself, arbitrators should consider whether, on a preliminary view of the relative merits of the case, there may be a need for security for costs.68
The Commentary adds:
When considering this issue arbitrators should be extremely careful not to prejudge or predetermine the merits of the case itself and should make it clear to the parties that they have not done so. The danger is that, if the arbitrators consider the merits of the case before the substantive hearing, they may compromise their impartiality and may disqualify themselves from proceeding further. Arbitrators should not consider the merits in detail, as it is unlikely that there will be adequate materials to do so and it would be a time-consuming and expensive exercise. Instead they should limit their preliminary examination to determine whether there is a prima facie claim made in good faith and a prima facie defence made in good faith.
[…] If […] they conclude that both parties have reasonably good arguable cases, they may consider that this factor is not helpful in determining whether an order for security is appropriate.69
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