TagTime with Meg Kinnear – Tracking the Evolution of the ICSID Rules*

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AuthorWendy Shidi Wu**

Investment Disputes
International Institutions and Rules

Meg Kinnear is a Vice President of the World Bank Group and the Secretary-General of the International Centre for Settlement of Investment Disputes (ICSID). During her “tag time” with Dr. Kabir Duggal and Amanda Lee, she discussed ICSID’s recent effort to reform rules and regulations commonly used in investor-State dispute settlement.[1] In particular, Ms. Kinnear shared her experience drafting the working papers of the latest ICSID amendment as well as the newly published Code of Conduct for Adjudicators developed with UNCITRAL.

Ms. Kinnear first briefly explained the structure of the amendment process. The amendment currently under consideration is part of the fourth amendment of ICSID rules and the topics involved in the process grew, in many ways, organically with everyday arbitration practices. A working group was involved with reviewing literature, conducting research, and drafting proposed rules in English, Spanish, and French. The Secretariat then requested comments from States and stakeholders, which were later published on the ICSID website. Finally, state representatives held 3 in-person consultations on the working papers. When asked how COVID-19 impacted the amendment process, Ms. Kinnear mentioned that a scheduled in person consultation with States on working paper number four got delayed in early 2020. In response, the Secretariat extended the deadline for one more set of written consultations with States and stakeholders. Meanwhile, the remote work environment has pushed forward electronic filing, virtual hearings,[2] and remote proceedings in common ICSID practices.

Ms. Kinnear then highlighted some changes and new areas of investor-State arbitration in the amendment process. First, the working group drafted a brand-new provision on third-party funding (AR 14) which identifies elements of “third-party” and defines coverage of third-party funding. Second, the increasing applications for security for costs led to the drafting of AR 53 which clearly states that the existence of third-party funding in itself is insufficient to order security for costs. Third, the Additional Facility rules have been expanded substantially so that regional economic integration organizations, such as the European Union, can also use these rules. Fourth, in a parallel ICSID Convention arbitration, parties can embody settlement obtained through the mediation process in the award and therefore benefit from the simplified enforcement in the ICSID Convention.

Besides the amendment process, Ms. Kinnear touched upon some basic rules and practices of ICSID. For example, in terms of the scale of consultations, she explained the importance of consensus in the voting process and outlined the number of votes required for different resolutions. In practice, each ICSID member state has one vote. Usually, voting takes place in person at the annual meeting in October but is acceptable by correspondence as well. Additionally, Ms. Kinnear addressed the issue of time and cost in investor-State arbitration. The most time-consuming parts of the arbitration process include establishing a tribunal, bifurcating a case, and issuing an award. After looking through previous cases, the working group established a reasonable amount of time for each component of the arbitration process. However, in order to ensure flexibility in the system for complicated cases, the tribunal can inform parties about the delay of issuing decisions under special circumstances; parties can then track delays on the ICSID website. Amendment proposals in the ICSID rules have also established a clear set number of days to address challenges to arbitrators. Parties are required to file within twenty-one days from when they knew relevant facts and are granted five days for arbitrator observations. Subsequently, parties have seven days to provide final simultaneous submissions and the decisionmaker has thirty days to get the decision out. When an arbitrator is challenged, parties may agree not to suspend certain aspects of the arbitration process and continue with the case until the disqualification is decided; otherwise, the suspension is automatically in place.

Finally, Ms. Kinnear discussed the new Code of Conduct developed with UNCITRAL. As the two organizations share many member states, ICSID and UNCITRAL have worked together to draft a more universal code that can be adopted from the UNCITRAL final work product. More specifically, Ms. Kinnear elaborated on the difficult issue of double hatting as codified in Art. 6. She noted that some commentators have raised concern that limits on multiple roles could create barriers to new entrants to the field and counter the effort made for diverse appointments from a policy perspective. However, huge progress has been made toward diversity and inclusion, as newer candidates obtain opportunity and exposure to enter the field.  “Every time you do that, it is one step forward.” Ms. Kinnear concluded the discussion on this positive note.

[1] Meg Kinnear, Tracking the Evolution of the ICSID Rules, TagTime (May 13, 2020), available at https://member-delosdr.org/video-tagtime-meg-kinnear-on-tracking-the-evolution-of-the-icsid-rules/.

[2] ICSID Webinar: The Art and Science of a Virtual Hearing (May 4, 2020), available at https://icsid.worldbank.org/resources/multimedia/webinar-art-and-science-virtual-hearing.

*This post is part of a series summarising episodes of Delos Disputes Resolution TagTime webinars. A list of past TagTime webinars is available at https://delosdr.org/index.php/past-webinars/.
**J.D. Candidate 2022, Columbia Law School.