On 28 February 2020, the International Centre for Settlement of Investment Disputes (ICSID) released its fourth working paper outlining proposed amendments to the ICSID Arbitration Rules. This working paper contains fewer amendments than earlier versions, given the “growing consensus on the new rules”. The latest amendments ─ which are aimed at improving the transparency and efficiency of proceedings ─ cover third-party funding, the tribunal’s first session, tribunal deliberations, decisions on costs, the publication of submissions, and non-party attendance at hearings.
First, the amendments broaden party disclosure obligations with respect to third-party funding. In particular, a party must notify the Centre if it has received, “directly or indirectly”, third-party finding. The party must also provide the third-party funder’s address (not just its name, as under the previous draft). Further, if deemed necessary at any stage of the proceedings, the tribunal may order a party to provide further information regarding its third-party funding.
Second, the proposals recommend that the request for arbitration include the names of persons and entities that “own or control” a claimant when it is a juridical person. This development partially upholds proposals of States that favoured making a claimant’s corporate structure a mandatory insertion in the request for arbitration.
Third, if the president or tribunal determines that it is not possible to convene the parties and other tribunal members within 60 days following the tribunal’s constitution, the first session may be held solely between the president and the parties, or among the members of the tribunal (based on written submissions of the parties). The proposals clarify that only the secretary may assist the tribunal in its deliberations, unless the tribunal decides otherwise and the parties are notified accordingly.
Fourth, when allocating costs, a tribunal is required to consider the extent to which the parties complied with the ICSID Rules and the tribunal’s orders and decisions. The amendments also include a costs-follow-the-event approach in respect of preliminary objections for “manifest lack of legal merit” (unless the circumstances justify a different allocation).
Fifth, and finally, as regards transparency, the Centre may only publish case submissions and supporting documents with both parties’ consent (not at the request of either party, as under the previous draft). Unless either party objects, the tribunal may allow persons other than the parties, their representatives, witnesses, experts and tribunal assistants to observe the hearing. Additionally, the Centre will publish recordings or transcripts of hearings at a party’s request, providing the other does not object.
The Secretariat has asked ICSID Member States to decide whether further Rule amendment consultations are necessary or whether the resolutions in the latest draft can be put to vote. If Member States opt for the latter, the Secretariat aims to have a vote occur during the second half of 2020 so that, if adopted, the amended Rules would come into force by early 2021.
ICSID’s fourth working paper is available here.