Out-Law News 1 min. read
23 Mar 2022, 3:18 pm
The Administrative Counsel of the International Centre for the Settlement of Investment Disputes (ICSID) has approved a comprehensive set of amendments to its rules for resolving investor-state disputes after a six-year consultation period.
The amended rules will take effect from 1 July 2022.
David Malpass, president of the World Bank Group and chair of the ICSID Administrative Council, said: “The amended rules streamline procedures to enable greater access and speed, increase transparency, and enhance disclosures, with the ultimate goal of facilitating foreign investment for economic growth.”
In relation to arbitration, the new rules require the electronic filing of documents, and stipulate that awards will also made public, subject to parties succeeding in raising objections – the grounds for which are limited under the new rules.
The rules also provide for parties in dispute to submit their case to fast-tracking proceedings, as well as providing for the first ever set of institutional rules for investor-state mediation.
Head of Construction & Energy, Augusta Ventures
[ICSID] recognises the widespread use of third party funding in international dispute resolution today, not only as a means of levelling the playing field but, increasingly, as a commercial risk management tool for multinational corporations
Clea Bigelow-Nuttall, an expert in international arbitration at Pinsent Masons who specialises in investor-state dispute settlement, said: “The long-awaited update to the ICSID Rules addresses important issues such as the public’s appetite for increased transparency in the handling of ISDS cases, which has occupied discussion for several years. ICSID’s users will also welcome the inclusion in the new rules of provisions aimed at improving the efficiency of the arbitral process, including the fixing of deadlines for the handing down of awards by arbitral tribunals”
Amongst other novel changes, the new ICSID Rules seek to codify the use of third party funding, which has long been crucial to investors seeking to bring claims against states. Foreign companies in disputes with states they invest in will have to disclose the identity of organisations that help them fund the cost of resolving those disputes once the new rules come into force.
“The obligation under the new ICSID Rules to disclose the name and address of any non-party from which funds are obtained to pursue or defend a claim will be seen as a way of addressing potential conflicts of interest of arbitrators, though others may view the tribunal’s new powers to order disclosure of ‘further information regarding the funding agreement’ as a step that may risk fettering access to justice,” Bigelow-Nuttall said.
Andrew Roberts, an investment manager at third party funder Augusta Ventures, said: “ICSID joins a number of leading arbitral institutions recently updating their rules to deal with funding. The move recognises the widespread use of third party funding in international dispute resolution today, not only as a means of levelling the playing field but, increasingly, as a commercial risk management tool for multinational corporations”.
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