In one of the first annulment cases, the MINE v. Guinea ad hoc Committee held that “the requirement that an award has to be motivated implies that it must enable the reader to follow the reasoning of the Tribunal on points of fact and law”.1 The Committee further stated that “the requirement to state reasons is satisfied as long as the award enables one to follow how the tribunal proceeded from Point A. to Point B. and eventually to its conclusion, even if it made an error of fact or of law”.2 This formula has been repeatedly applied by subsequent ad hoc committees.3
II. Connection to Article 48(3) of the ICSID convention
III. Effects of waiver
IV. Standard of review
The threshold to annul an award under Article 52(1)(e) is high.8 Ad hoc committees have held that annulment under Article 52(1)(e) should only take place when the point lacking reasoning is “crucial or decisive”,9 “necessary for the Tribunal’s decision”10 or “essential for the outcome of the case”.11 Tribunals are therefore not required to “explain each and every statement and conclusion it has reached”.12
B. No review of the reasoning itself
In accordance with the general prohibition for ad hoc committees to act as appeal organs or review the substance of the tribunals’ decision, Article 52(1)(e) does not allow ad hoc committees to intrude into the legal and factual decision-making or rule on the correctness or persuasiveness of the tribunal’s reasoning or decision.13
V. Application of the "failure to state reasons" ground of annulment in ICSID annulment case law
The following circumstances have been raised by parties seeking to annul an award as potentially constituting a “failure to state reasons”. Whether the award was annulled in accordance with Article 51(2)(e) depended on the specific circumstance(s) raised and the facts of the case:
Bishop, R.D. and Marchili, S., Failure to State Reasons on which an Award is Based, in Annulment Under the ICSID Convention, 2012, Oxford University Press, pp. 151-197.
Cheng, T. and Trisotto, R., Reasons and Reasoning in Investment Treaty Arbitration, Suffolk Transnational Law Review, Vol. 32, Issue 2, 2009, pp. 409-434.
Crivellaro, A., The Failure to State Reasons in ICSID Awards, Les Cahiers de l’Arbitrage, Vol. 4, 2012, p. 865.
Giannakopolous, C., Reconceptualizing “Failure to State Reasons” as a Ground for Annulment under Article 52(1)(e) of the ICSID Convention, Journal of International Dispute Settlement, Vol. 8, Issue 1, 2017, pp. 125-154.
Guillaume, G., Failure to State Reasons in ICSID Awards, in Gaillard, E. (ed.), The Review of International Arbitral Awards, IAI Series on International Arbitration, Vol. 6, 2010, pp. 271–282.
Mullen, S. and Whitsitt, E., Quantum, Annulment and the Requirement to give Reasons: Analysis and Reform, Arbitration International, Vol. 32, Issue 1, 2016, pp. 59–80.
Schreuer, C., Malintoppi, L., Reinisch, A. and Sinclair, A., Annulment, in The ICSID Convention - A Commentary, 2nd ed., 2010, pp. 996-1023.
Sturzenegger, M., ICSID Arbitration and Annulment for Failure to State Reasons – The Decision of the Ad Hoc Comitteee in Maritime International Nominees Establishment v. Republic of Guinea, Journal of International Arbitration, Vol. 9, Issue 4, 1992, pp. 173-198.
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