ICSID is a self-contained system, meaning that any arbitral award arising out of an ICSID proceeding is self-executing upon being rendered through dispatch by the Secretariat to the parties.1 The parties are immediately bound under their treaty obligations to comply with the arbitral award, unless a stay of enforcement is granted.2 In other words, the Convention temporarily exempts a party from complying with the obligations imposed by an award, but only to the extent that the enforcement of those obligations has been stayed.3
A party who requests revision of an award on the ground of discovery of some fact of such a nature as decisively to affect the award (provided that fact was unknown to the Tribunal and the applicant at the time the award was rendered and the lack of knowledge of such fact is not due to the applicant’s negligence) may also request that the Tribunal which rendered the award (or a newly constituted tribunal, if the original Tribunal is unavailable) stay enforcement of such award, if it considers that the circumstances so require, pending the Tribunal’s decision on revision.8
The party requesting the stay must specify the circumstances requiring the stay.9 Upon request, enforcement shall be stayed provisionally until the Tribunal rules on such request after having given each party an opportunity to present its observations.10 Once constituted, the Tribunal shall, if either party requests, issue its ruling on the continuation of the provisional stay within 30 days. If the ad hoc Committee determines not to continue the stay, the stay shall automatically be terminated.11
A party who requests annulment of an award on one or more of the grounds listed in Article 52(1) of the Convention may request that the duly appointed ad hoc Annulment Committee stay enforcement of the award, if it considers that the circumstances so require, pending the Committee’s decision on annulment.12
The party requesting the stay must specify the circumstances requiring the stay.13 Upon request, enforcement shall be stayed provisionally until the Committee makes a final ruling on such request after having given each party an opportunity to present its observations.14 Once constituted, the ad hoc Committee shall, if either party requests, issue its ruling on the continuation of the provisional stay within 30 days. If the ad hoc Committee determines not to continue the stay, the stay shall automatically be terminated.15
National courts asked to enforce an ICSID award may also stay such enforcement proceedings pending the annulment decision before the ICSID ad hoc Annulment Committee.16 National courts, however, have refused to stay the enforcement proceedings where the annulment decision was already rendered and the party seeking the stay had not applied to the ICSID ad hoc Annulment Committee for such stay.17
A stay, if granted, can be modified or terminated at any moment at the discretion of the Tribunal (in the case of an application for interpretation or revision) or the ad hoc Committee (in the case of an application for annulment).20 If a stay is not terminated during the proceeding, it terminates automatically upon the issuance of the Tribunal’s or ad hoc Committee’s final decision on the original application.21
Prior decisions by ad hoc Committees, while they may be persuasive, are not binding authority. Each ad hoc Committee must consider the factual circumstances of the case before it in assessing whether to grant a stay.22 While ad hoc Committees may, and often do, consider the practice of prior ad hoc Committees, they are not bound by any rules of precedent in this respect.23
To date, there have been at least 94 decisions rendered on stays of enforcement by ad hoc Annulment Committees:24
Given the divergent approaches to assessing stay applications, a number of issues often arise, including (A) which party bears the burden of proof, (B) whether there exists a presumption in favor of a continued stay, and (C) what standard or considerations may justify (or not) the continuation of a provisional stay. These are described below.
Which party bears the burden of proof in respect of stay applications is the subject of much debate. That said, it appears generally accepted that the party seeking the stay or a continuation thereof must bear the burden of establishing the basis for that request.25
On the other hand, at least some ad hoc Committees have accepted that the party seeking to lift the provisional stay bears the burden to prove that there are circumstances that warrant the attachment of conditions in the case the stay is granted.26 It has also been suggested that the award creditor bears the burden of advancing evidence in support of any positive allegations it makes against continuation of a stay.27
Whether there exists a presumption in favor of granting requests for a continued stay is the subject of debate amongst ad hoc Committees. Some Committees have, either implicitly or explicitly, presumed that a stay of enforcement should be continued if requested,28 while others have resisted such presumption.29
Neither the ICSID Convention nor its corresponding arbitration rules provide any indication of what circumstances do (or do not) warrant a stay of enforcement.30 There is no hard and fast rule or standard in this regard. Rather, Articles 50(2), 51(4) and 52(5) of the Convention state only that a stay “may” be granted “if [the Tribunal or ad hoc Committee, as the case may be,] considers that the circumstances so require.” Tribunals and ad hoc Committees therefore have considerable discretion in how to approach the issue of stay,31 subject to the condition that the circumstances must “require” continuing the stay.32 Tribunals have refused to consider for instance that an applicant State’s conflicting international obligations require a stay of enforcement or its continuation.33
Committees often, but not always,34 undergo a two-step analysis consisting of, first, determining whether the provisional stay should be continued, and, if so, second, whether to subject the stay to any conditions (for example, posting of security). This two-step analysis is described in the following paragraphs.
For the first step, ad hoc Committees have, broadly speaking, tended to balance both (a) the prejudice to the applicant, and (b) prejudice to the award creditor.35 Committees have tended not to consider (c) the prima facie merits of the annulment application. Each of these elements is explained as follows.
Ad hoc Committees have considered, as a factor in assessing whether to lift a stay, potential prejudice to the applicant. Such prejudice may include, for example, the risk of non-recovery (or difficulty of recovery) of sums due under the award if the award were to be annulled,36 and whether there will be adverse economic consequences to the applicant (including possible irreparable injury) in case of immediate compliance with the challenged award.37 Tribunals have refused however to take into consideration the applicant’s need for payment.38
With respect to non-recovery of sums due if the award is annulled, the “few ad hoc Committees that have found a real risk of non-recoupment did so when the award creditor was an individual, or a shell company with a sole controlling individual, and where the risk of bankruptcy was shown to be a legitimate concern.”39 With respect to irreparable injury, some ad hoc Committees have considered “whether termination of the stay (or the granting of security) would have catastrophic, immediate and irreversible consequences for the award debtor’s ability to conduct its affairs.”40 Other ad hoc Committees have used a less stringent standard.41
Ad hoc Committees have likewise considered, as a factor in assessing whether to lift a stay, potential prejudice to the award creditor. Such prejudice may include, for example, the risk of non-compliance with the award if the award is not annulled.42 Ad hoc Committees may also consider the limited prospects of enforcement if the award is upheld.43 Finally, whether there is likely to be other adverse economic consequences or hardship to the award creditor is a consideration.44
Ad hoc Committees have generally considered that the merits of an annulment application are not relevant for purposes of their decision on whether to continue a stay.45 Some tribunals have considered however that they may analyze the bad faith, frivolous or dilatory character of annulment applications.46
For the second step, parties will often request, in the event an ad hoc Committee is inclined to grant a stay, that the Committee condition such stay on the posting of a bond, bank guarantee, letter of credit, or similar provision of security in the total amount of the award (perhaps also including costs and interest to date).
Ad hoc Committees faced with determining annulment applications have taken different approaches to conditioning stays. Some have taken the view that conditioning the stay upon posting of adequate security would be improper, or otherwise not part of its role, because doing so would “provid[e] the beneficiary of an award with better protection than beneficiaries of awards that are not tested in the annulment process."47
Most ad hoc Committees, however, appear to have found that conditioning the stay on appropriate security is within their discretion.48 Conditions, however, are typically imposed only after having carefully49 weighed a number of factors holistically,50 including among others:
On November 12, 2021, the ICSID Secretariat published its sixth working paper (Working Paper #6) containing proposals for Arbitration Rules (AR) amendments. It builds on the proposals published in August 2018 (Working Paper #1), March 2019 (Working Paper #2), August 2019 (Working Paper #3), February 2020 (Working Paper #4), and June 2021 (Working Paper #5). Proposed AR 73, which is a modification of current AR 54, continues in its attempt to simplify the text, codify practice, clarify procedure and address efficiency of processes relating to stays of enforcement of awards. For example, AR 73(4) reflects the practice arising out of the interpretation of the Convention and the Rules by Committees that a stay of enforcement may be conditional.58 Proposed AR 72(1) and proposed AR 1(2) also provide that the parties may agree to modify the procedure for seeking a stay of enforcement.59
Annacker, C., Achtouk-Spivak, L. and Bouraoui, Z., ICSID Awards, in Rowley, J.W. QC, Gaillard, E. and Kaiser, G.E. (eds.), The Guide to Challenging and Enforcing Arbitration Awards, Law Business Research Ltd, 2019, pp. 136-152.
Bishop, R.D. and Marchili, S.M., Part III Annulment Procedure, 12 Stay of Enforcement and Guarantees, in Mistelis, L. (ed.), Annulment Under the ICSID Convention, Oxford International Arbitration Series, 2012, p. 237.
Burgstaller, M., Chapter 15: Recognition and Enforcement of ICSID Awards: The ICSID Convention and the European Union, in Baltag, C. (ed.), ICSID Convention after 50 Years: Unsettled Issues, Kluwer Law International, 2016, pp. 407-426
Escobar, A.A., Introductory Note: International Centre for Settlement of Investment Disputes (ICSID): Azurix Corp. v. The Argentine Republic Decision on the Argentine Republic’s Request for a Continued Stay of Enforcement of the Award, International Legal Materials, Vol. 47, No. 3, 2008, p. 445.
Fernando, A.F.T., The Requirement to Provide a Bank Guarantee in Return for a Continuation of the Provisional Stay of Enforcement of the Award under Article 52(5) of the ICSID Convention – Can This Be Justified?, Transnational Dispute Management, No. 1, 2005.
Friedland, P.D., Stay of Enforcement of the Arbitral Award Pending ICSID Annulment Proceedings, in Gaillard, E. and Banifatemi, Y. (eds.), Annulment of ICSID Awards, IAI series on international arbitration n°1, Juris / International Arbitration Institute, 2004, p. 177.
Frutos-Peterson, C., Case Summary: Azurix Corp. v. Argentine Republic (ICSID Case No. ARB/01/12), Annulment Proceeding – Decision on the Argentine Republic’s Request for a Continued Stay of Enforcement of the Award, ICSID Review—Foreign Investment Law Journal, Vol. 23, No. 1, 2008, p. 155.
Kalderimis, D.R., Rubins, N., et al., ICSID Convention, Chapter IV, Section 5, Article 52 [Annulment], in Mistelis, L.A. (ed.), Concise International Arbitration, 2nd ed., Kluwer Law International, 2015, pp. 138-148
Kalderimis, D.R., Rubins, N., et al., ICSID Convention, Chapter IV, Section 6, Article 53 [Binding force of the award], in Mistelis, L.A. (ed.), Concise International Arbitration, 2nd ed., Kluwer Law International, 2015, pp. 148-150
Kimmelman, L.B. and MacGrath, D.C., Recommended Procedures for Recognition and Enforcement of International Arbitration Awards Rendered Under the ICSID Convention, in Report by the Committee on International Commercial Disputes of the New York City Bar Association, ICSID Review, Vol. 27, No. 1, 2012, pp. 207-230
Kotick, B. and Cullborg, J.D., A (Counter) Balancing Act: The Express Power to Order a Security on a Stay of Enforcement Pending Annulment, ICSID Review, Vol. 3, Issue 1, 2018, p. 260.
Newcombe, A., Introductory Note: ICSID ad hoc Committee: Decision to Terminate Stay of Enforcement of Arbitral Award in Sempra Energy Int’l v. Argentine Republic, International Legal Materials, Vol. 48, No. 6, 2009, p. 1448.
Peterson, L.E. and Bohmer, L., Further Developments in Relations to ICSID Stays of Enforcement, Investment Arbitration Reporter, 20 September 2018.
Polasek, M., Introductory Note to Three Decisions on the Stay of Enforcement of an ICSID Award, ICSID Review—Foreign Investment Law Journal, Vol. 20, No. 2, 2005, p. 581.
Prager, D.W., Should States be required to post a security as a condition for the stay of enforcement of an ICSID Award during Annulment Proceedings?, Kluwer Arbitration Blog, 7 October 2009.
Reed, L.F. and Paulsson, J., et al., Chapter 6: Recognition, Enforcement and Execution of ICSID Awards, in Guide to ICSID Arbitration, Kluwer Law International, 2010, pp. 179-190.
Savage, J., ICSID Ad Hoc Committee Conditions Stay of Enforcement on Posting of Security Wena Hotels Limited v Arab Republic of Egypt (ICSID Case No ARB / 98/4) Annulment Proceeding — Procedural Order No. 1, 18–10 Mealey’s International Arbitration Reports 16, 2003.
Schreuer, C.H. et al., The ICSID Convention: A Commentary, Cambridge University Press, 2009, p. 1118
Sicard-Mirabal, J. and Derains, Y., Introduction to Investor-State Arbitration, Chapter 10: The Award and Enforcement Issues, Kluwer Law International, 2018, pp. 237-264
Sinclair, A.C., Award-Creditor Security and a Continuing Stay of Enforcement in CDC Group plc v. Republic of the Seychelles, Mealey’s International Arbitration Report, Vol. 19, No. 9, 2004, p. 35.
Stevens, M., The Power of ICSID Ad Hoc Committees to Order Security When Granting a Stay of Enforcement, in Bishop, R.D. (ed.), Enforcement of Arbitral Awards Against Sovereigns, New York: Juris Publishing, 2009, pp. 113.
Torterola, I. and Di Pietro, D., Notes on the Requirement of Guarantees as a Condition for a Stay of Enforcement of ICSID Arbitral Awards, Transnational Dispute Management, Vol. 7, No. 1, 2010.
Uchkunova, I., Much Ado about Nothing – Conditional Stay of Enforcement in Annulment Proceedings under the ICSID Convention, Arbitration International, Vol. 30, No. 2, 2014, p. 283.
van den Berg, A.J., Some Recent Problems in the Practice of Enforcement under the New York and ICSID Conventions, ICSID Review, Vol. 2, Issue 2, 1987, p. 439.
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