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Ms Karla Lucero Andrade

PhD Candidate - University Paris 2 Panthéon-Assas

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Decision in Investment Arbitration

I. Definition

1.

Decision in investment arbitration is a general term which refers to the position statement of an arbitral tribunal in relation to a question. Decisions may concern any type of question relating to the conduct of the arbitration or the resolution of the dispute. Some decisions, like awards, require a more formal adoption procedure than others. See also Elements of an Award, on Discontinuance of Proceedings, and Stay of Enforcement.

II. Awards

2.

Arbitration rules in investment arbitration allow arbitral tribunals to decide on a subject through either an award, a decision, or an order.1 There is no clear definition of the notion of award

3.

However, in ICSID arbitration, it is generally accepted that a distinction exists between decisions and awards.2 In a nutshell: “The issuance of a decision signals the continuation of a proceeding, whereas an award marks the end of a proceeding”.3 To that extent, a decision rejecting jurisdiction is considered as an award.4 The main difference in ICSID Arbitration between awards and decisions is that only awards may be subject to a post-award remedy.

4.

In other arbitration rules there is little guidance as to what constitutes an award. Nevertheless, an award – as a decision – can be identified by several requirements it meets, as well as the presence of obligatory statements of the reasons on which the award is based.

A. Mandatory requirements

B. Reasons on which an award is based

6.

All the main arbitration rules in investment law stipulate that an award must state the reasons on which it the award is based. One exception to this condition is the case of awards by consent i.e. awards which record a settlement agreement.5

III. Other types of decisions

A. Decisions on preliminary matters

1. Decisions on jurisdiction

7.

The parties can request a Tribunal (or a Tribunal can take the initiative) to decide on a jurisdiction objection before issuing a decision on the merits of the claim.6 To that end, the Tribunal can decide to rule by way of separate preliminary decisions, or to rule on the objection as well as the award on merits altogether.

8.

Jurisdictions objections are frequently related either to:

9.

In ICSID arbitration, the decision upholding jurisdiction is not an award, but can be later incorporated in an award. For example, Schreuer notes that “[t]he terminology of Tribunals in denominating their interim decisions on jurisdiction has not been uniform […] Tribunals have at times called preliminary decisions on jurisdiction ‘Award on Jurisdiction’, ‘Decisions on Objections to jurisdiction’, [and] ‘interim award'”.8 It should also be noted that ICSID decisions are taken by a majority vote.9

10.

Moreover, it is necessary to recall that some of the Decisions in jurisdiction also decide on liability matters.10

11.

Under other arbitration rules “tribunals are generally free to decide the form of decisions on preliminary issues [and] in the vast majority of cases, positive decisions on jurisdiction will take the form of awards”.11

2. Decisions on disqualification and challenge of arbitrators

12.

The ICSID Convention contains provisions for the disqualification of an arbitrator in Article 14(1) and Article 57. See also Disqualification of Arbitrator. The decision on disqualification is made by the unchallenged members of the Tribunal. ICSID tribunals have held different positions regarding the disqualification threshold.12 The ICSID Secretariat has listed an important number of decisions on this subject.13

13.

The rules regarding decisions on disqualification in other arbitration rules such as the UNICITRAL Arbitration rules, ICC Arbitration Rules and SCC Arbitration Rules are provided respectively by Article 12, Article 14 and Article 19.

3. Procedural orders on the conduct of the proceeding

14.

In ICSID arbitration, procedural orders are addressed by Arbitration Rule 19: “The Tribunal shall make the orders required for the conduct of the proceeding”. Procedural orders issued by a tribunal may relate to the following matters:14

  • The number of arbitrators necessary for a quorum
  • The language of the proceedings
  • The time limits for pleadings
  • The appointment costs
15.

Rules governing procedural orders can also be found in Article 22 of ICC Arbitration Rules.

4. Decisions on provisional measures

16.

See also Provisional Measures. In ICSID arbitration, parties to a dispute can request the Tribunal take a decision on Provisional Measures provided that certain conditions are met. These conditions are stated by Rule 39 (1) of ICSID Arbitration Rules and Article 47 of The ICSID Convention. It should be noted that before it can recommend Provisional Measures, the Tribunal must be satisfied that it has “prima facie jurisdiction over the parties and the dispute submitted to it”.15

17.

Moreover, even if Article 47 indicated that the tribunal can only recommend provisional measures recent decisions of ICSID tribunals seems to show an intention to recognize the binding nature of the measures.16

18.

With respect to decisions on provisional measures in other arbitration rules, relevant provisions include:

5. Decisions on unmeritorious claims in ICSID arbitrations

19.

See Claim Manifestly without Legal Merits. Introduced from 10 April 2006, Rule 41(5) of the ICSID Arbitration Rules allows a party to raise an objection if the claim manifestly lacks legal merit. This objection must be filed within 30 days after the constitution of the Tribunal. This procedure “is intended to create the possibility to dismiss at an early stage cases which are clearly unmeritorious”.17 Practitioners should note that a live list of decisions on clear lack of legal merit is provided by the ICSID Secretariat.18

B. Decisions on discontinuance of proceedings

20.

See also Discontinuance of the Proceedings. Several reasons may explain the Discontinuance of the Proceedings. In ICSID arbitration, three scenarios of discontinuance exist following Rule 43, Rule 44, and Rule 45 of the ICSID Arbitration Rules. Additionally, it should be noted that discontinuance may also occur if the parties fail to pay the advances to meet the costs of the proceedings.19 In ICSID arbitration, a request of discontinuance is recorded in an order taking note of the discontinuance,20 or in an order of the Secretary-General taking note of the discontinuance if no tribunal has been constituted.21

21.

With regard to other arbitration rules and discontinuance decisions, relevant provisions include:

IV. ICSID arbitration and post-award decisions

22.

In relation to ICSID arbitration, several post-award remedies are available to the parties. Indeed, the parties may request a:

  • supplementary decision or rectification;22
  • an interpretation of the award;23
  • a revision of the award;24 and
  • an annulment of the award under the terms of Article 52 of the ICSID Convention.

23.

In the first three circumstances listed directly above, the decision of the tribunal becomes part of the award for the purposes of recognition and enforcement.

24.

It is worth noting that UNICITRAL Arbitration Rules, SCC Arbitration Rules and ICC Arbitration Rules also provide for a procedure of award interpretation. Decisions of interpretation then form part of the award.

A. Decision on stay of enforcement

25.

See Stay of enforcement of ICSID awards, and Stay of enforcement of non-ICSID awards. In ICSID arbitration, Rule 54 of the Arbitration Rules allows a party to request a stay of enforcement of the award25 if the party applies for the interpretation, revision, or annulment of the award.26 A stay of enforcement decision postpones or halt the execution of an award. All decisions according a stay of enforcement terminate automatically on the date on which a final decision is rendered.27

B. Decisions on annulment

26.

See Annulment Tribunal. ICSID awards may be partially or totally annulled in accordance with Article 52 of the ICSID Convention and Rules 50 and 52 of ICSID Arbitration Rules.28 The annulment decision29 is not an award. The Committee’s decision on annulment may uphold an application in respect of a part of the award or the entire award or reject the application.

27.

At time of writing, 78 decisions on annulment have been rendered.30

Bibliography

Binder, C., Kriebaum, U., Reinisch, A. and Wittich, S., International Investment Law for the 21st Century: Essays in Honour of Christoph Schreuer, 2009, p. 970.

Cleis, M.N., Disqualification Decisions under the ICSID Convention and Arbitration Rules, in The Independence and Impartiality of ICSID Arbitrators: Current Case Law, Alternative Approaches, and Improvement suggestions, 2017.

Dautaj, Y., The Binding Nature of Provisional “Recommendations” in ICSID Arbitration, Kluwer Arbitration Blog, 2018.

Giorgetti, C. (ed.), Litigating International Investment Disputes: A Practitioner’s Guide, 2014, p. 566.

Schreuer, C., Malintoppi L., Reinisch A. and Sinclair A., The ICSID Convention: A Commentary, 2009, p. 1600.

ICSID, Practices Notes for Respondents in ICSID Arbitration, 2015.

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