I. Introduction

The International Centre for Settlement of Investment Disputes (ICSID or the Centre) is a public international organization established by a multilateral treaty, the 1965 Convention on the Settlement of Investment Disputes between States and Nationals of Other States (the Convention or ICSID Convention).1 To date, 130 countries have signed and ratified the Convention to become Contracting States. 2 Article 1(2) of the Convention defines the purpose of ICSID as being "to provide facilities for conciliation and arbitration of investment disputes between Contracting States and nationals of other Contracting States in accordance with the provisions of this Convention." The jurisdiction of the Centre is elaborated upon in Article 25(1) of the Convention. According to Article 25(1), the jurisdiction of the Centre extends to "any legal dispute arising directly out of an investment, between a Contracting State (or any constituent subdivision or agency of a Contracting State designated to the Centre by that State) and a national of another Contracting State, which the parties to the dispute consent in writing to submit to the Centre."

The preamble of the Convention repeatedly refers to the dependence of the jurisdiction of the Centre on the consent of the parties. 3 This emphasis is taken up in the Report of the World Bank Executive Directors accompanying the Convention. It describes the consent of the parties as "the cornerstone of the jurisdiction of the Centre" 4 and as "the essential requirement" capable even of helping to meet other requirements relating to the jurisdiction of the Centre. 5

The Report of the World Bank Executive Directors accompanying the Convention also highlights the fact that, "[i]n keeping with the consensual character of proceedings under the Convention," the parties to such proceedings may agree on rules that will apply in the proceedings. 6 As section II of this paper tries to show, this freedom or autonomy of the parties is in principle extensive in respect of arbitration proceedings under the ICSID Convention. It is, however, limited by the mandatory provisions of the Convention discussed in section III of this paper. Pursuant to Article 6(1)(a)-(c) of the Convention, the Administrative Council of the Centre has adopted Administrative and Financial Regulations, Rules of Procedure for the Institution of Conciliation and Arbitration Proceedings (Institution Rules), Rules of Procedure for Conciliation Proceedings (Conciliation Rules) and Rules of Procedure for Arbitration Proceedings (Arbitration Rules). 7 Section IV of this paper examines further limits of party autonomy in the Institution Rules and the Administrative and Financial Regulations. The final section of the paper, section V, explains that in many of the cases that are now being [Page28:] brought before the Centre there is diminished practical scope for the exercise of party autonomy. Section V of the paper also calls attention to demands for more oversight of the arbitral process, which may lead to further inroads on party autonomy.

II. Party autonomy in arbitration proceedings under the ICSID Convention

Chapter IV of the ICSID Convention is entitled "Arbitration." It contains 20 articles, numbered 36 through 55, regarding arbitration proceedings under the Convention. The topics covered range from the institution of such proceedings to the recognition and enforcement of the resulting awards. Questions common to both conciliation and arbitration proceedings are dealt with in the next three chapters of the Convention. These are Chapter V, containing three articles on the "Replacement and Disqualification of Conciliators and Arbitrators," Chapter VI, consisting of three articles on the "Cost of Proceedings," and Chapter VII, made up of two articles on the "Place of Proceedings."

Several of the articles in these chapters of the Convention proclaim the freedom of the parties to agree on the matter at hand or on alternatives to the provision in question. 8 Thus Article 37(2)(a) of the Convention provides that an arbitral tribunal "shall consist of a sole arbitrator or any uneven number of arbitrators appointed as the parties shall agree." 9 Article 42(1) of the Convention gives the parties complete freedom to agree on the rules of law that the tribunal will apply to the substance of the dispute. 10 Article 42(3) of the Convention makes it clear that the parties may also authorize the tribunal to decide the dispute ex aequo et bono. 11

Articles 43, 46, 47 and 61(2) of the Convention provide that the tribunal may call on the parties to produce evidence and may visit the scene connected with the dispute; that the tribunal must accede to a request by a party to determine any incidental or additional claims or counter-claims that arise directly out of the subject-matter of the dispute and are within the jurisdiction of ICSID; that the tribunal may recommend provisional measures that should be taken to preserve the rights of either party; 12 and that the tribunal must in its award determine the ultimate apportionment of the costs of the proceeding. In each of these articles of the Convention, however, the power or duty of the tribunal is expressed as existing only "except as the parties otherwise agree." According to Article 60(2) of the Convention, the parties may "agree[...] in advance" with the tribunal that the arbitrators will receive fees and expenses other than those prescribed in the Schedule of Fees of the Centre. In addition, under Article 63 of the Convention, a proceeding may be held away from the seat of the Centre in Washington, D.C. "if the parties so agree." 13[Page29:]

The Arbitration Rules of the Centre consist of 55 rules. They address in detail all stages of an arbitration proceeding following its institution. Many of the rules elaborate on basic provisions of the Convention, including most of those mentioned above. Other rules cover matters not specifically dealt with in the Convention. These include rules on sessions and deliberations of the tribunal, procedural languages, written and oral procedures and the discontinuance of proceedings. Article 44 of the Convention seeks to protect the parties from amendments that they might not welcome by providing that the arbitration proceeding will be conducted in accordance with the Arbitration Rules in the form "in effect on the date on which the parties consented to arbitration." Article 44, however, provides that the parties may "otherwise agree." The parties may therefore agree that their proceeding will instead be conducted in accordance with the Arbitration Rules in effect on the date of the institution of any proceeding. 14 In principle, the parties may also agree on alternatives to the provisions of the Arbitration Rules. 15 Several of the Arbitration Rules remind the parties of this freedom. Arbitration Rule 29, for example, provides that, unless the parties "otherwise agree," the proceeding will comprise a written procedure followed by an oral one. Arbitration Rule 20(1) requires the presiding arbitrator, as early as possible after the constitution of the tribunal, to facilitate the establishment of a concrete procedural framework for the case by seeking the views of the parties on questions of procedure. 16 Rule 20(1) makes special mention of seven such questions that parties may agree upon. These are the number of arbitrators required to constitute a quorum for sittings of the tribunal; the language or languages to be used in the proceeding; the number and sequence of the pleadings and the time limits for filing them; the number of copies to be supplied to each party of instruments filed by the other; the manner in which the cost of the proceeding will be apportioned; and the manner in which the record of the hearings will be kept.17 Arbitration Rule 20(2) emphasizes that, in the conduct of the proceeding, the tribunal should "apply any agreement between the parties" on such questions. 18

In principle, parties to arbitration proceedings under the ICSID Convention retain considerable control over what might be called the privacy of the proceeding. The proceeding being based upon the consent of the parties to it; their consent is also necessary if other parties are to intervene in or be joined to the proceeding or if the proceeding is to be consolidated with other proceedings. Arbitration Rule 32(2) makes it clear that hearings may be open to the public only "with the consent of the parties." This rule is based on Article 48(5) of the Convention, 19 which enjoins ICSID from publishing the arbitral award "without the consent of the parties." 20 Under Administrative and Financial Regulation 22(2), the Centre may similarly publish the minutes and other records of a proceeding only "if both parties … consent." Likewise, unless the parties "otherwise agree" pursuant to Article 44 of the Convention, the arbitrators must under Arbitration Rule 6(2) pledge that they will "keep confidential" all information coming to their knowledge as a result of their participation in the proceeding, as well as the contents of any award of the tribunal.

Article 53(1) of the ICSID Convention provides that an award rendered thereunder shall be binding on the parties and not subject to any appeal or to any other remedy except those provided for in the Convention. Four remedies are provided for in the Convention. The first is addition to or correction of the award. It may briefly be called rectification. The three other remedies are interpretation, revision and annulment. Rectification may be granted at the request of either party if the award omits to decide [Page30:] a question or contains a typographical, arithmetical or similar error. 21 Interpretation of the award may be requested by either party if a dispute has arisen between the parties over the meaning or scope of the award. 22 Revision of the award may be requested by either party on the ground of discovery of some fact, unknown to the tribunal and the requesting party when the award was rendered, that would decisively affect the award. 23 Annulment of the award may be requested by either party on one or more of the following grounds: that the tribunal was not properly constituted; that it manifestly exceeded its powers; that one of its members was corrupt; that there was a serious departure from a fundamental rule of procedure; or that the award failed to state the reasons on which it was based. 24 A request for rectification will be addressed to the tribunal that rendered the award. 25 A request for interpretation or revision will similarly be submitted to the tribunal that rendered the award unless that is no longer possible, in which case a new tribunal must be constituted to consider the request. 26 A request for annulment will be submitted to a three-member ad hoc committee appointed from the Panel of Arbitrators of ICSID by the Chairman of the Administrative Council of the Centre. 27 The committee will have the power to annul the award in whole or in part on any of the above-mentioned grounds. 28 If there is an annulment, either party may submit the dispute to a new tribunal. 29

Rectification has been requested in respect of two awards rendered pursuant to the ICSID Convention. 30 There has never been a request for interpretation. Nor has a request for revision been registered. Requests for annulment, however, have been registered in respect of six awards rendered pursuant to the Convention. 31 In several of these cases, the grievances of the applicants for annulment included alleged failures on the part of the arbitrators to apply the law applicable to the substance of the dispute. The resulting ad hoc committee decisions32 confirmed that such a failure, if established, could constitute an excess of powers for which the remedy of annulment was available. One of these decisions explained that

the parties' agreement on applicable law forms part of their arbitration agreement. Thus, a tribunal's disregard of the agreed rules of law would constitute a derogation from the terms of reference within which the tribunal has been authorized to function. Examples of such a derogation include the application of rules other than the ones agreed by the parties, or a decision not based on any law unless the parties had agreed on a decision ex aequo et bono. If the derogation is manifest, it entails a manifest excess of powers. 33[Page31:]

While the above explanation is directed at failures to apply agreed rules of law, it makes it clear that the remedy of annulment may be invoked to protect the exercise of party autonomy in other areas as well. A manifest "derogation from the terms of reference" agreed by the parties in regard to incidental or additional claims or counter-claims, for example, might also "entail a manifest excess of powers" for which the remedy of annulment is available. In addition to allowing ample scope for the exercise of party autonomy, the ICSID Convention therefore contains a mechanism for enforcing it. Though extensive and supported by a sanction, party autonomy in respect of arbitration proceedings under the ICSID Convention is, as already indicated, also limited by various provisions of the Convention, Institution Rules and Administrative and Financial Regulations.

III. Limits in the ICSID Convention

Several of the most important provisions of the Convention from which the parties cannot derogate are designed to assure the effectiveness of the arbitral process and in particular of the arbitral tribunal as a decision-making body. Thus, Articles 37(2) and 48(1) of the Convention require that the tribunal have an uneven number of members and that the tribunal decide questions by a majority of the votes of all of its members. Article 41(2) of the Convention provides that the arbitral tribunal shall be the judge of its own competence. 34 Article 42(2) of the Convention prohibits an arbitral tribunal from bringing in a finding of non liquet on the ground of silence or obscurity of the law applicable to the substance of the dispute. Article 45(2) of the Convention provides that if a party fails to appear or to present its case at any stage of the proceeding, the other party may request the tribunal to deal with the questions submitted to it and to render an award. 35 In accordance with Article 48(3) of the Convention, the arbitrators must in all cases deal in their award with every question submitted to the tribunal. None of these provisions of the Convention is subject to contrary agreement of the parties.

A second set of mandatory provisions of the Convention consists of provisions intended to promote the integrity and impartiality of the arbitral process. Article 36(1) of the Convention requires a party wishing to institute an arbitration proceeding to address a written request to that effect to the Secretary-General of the Centre. The Secretary-General must, in turn, send a copy of the request to the other party. Article 36(2) specifies that the request should contain information concerning the issues in dispute, the identity of the parties and their consent to arbitration. Article 36(3) provides that "[t]he Secretary-General shall register the request unless he finds, on the basis of the information contained in the request, that the dispute is manifestly outside the jurisdiction of the Centre. He shall forthwith notify the parties of registration or refusal to register." The screening by the Secretary-General of requests for arbitration under these provisions of the Convention provides a safeguard against cases of obvious misuse of the arbitral process. The parties cannot, of course, authorize departures from these provisions.

Other mandatory provisions of the Convention intended to promote integrity and impartiality concern the arbitrators and their role in the process. Thus, in order to discourage the appointment of so-called national arbitrators, Article 39 of the [Page32:] Convention provides that, unless each and every arbitrator is appointed by agreement of the parties, the majority of the members of the tribunal must be nationals of countries other than the State party to the dispute and the State whose national is a party to the dispute. Article 40(2) of the Convention makes it clear that all arbitrators, including party-appointed arbitrators, must be "persons of high moral character and recognized competence in the fields of law, commerce industry or finance, who may be relied upon to exercise independent judgment." 36 Under Articles 57 and 58 of the Convention, an arbitrator may be disqualified "on account of any fact indicating a manifest lack" of those qualities or on the ground that the nationality37 of the arbitrator rendered him or her ineligible for appointment to the tribunal. 38 After a tribunal has been constituted, its composition may otherwise be changed only as a result of the death, incapacity or resignation of an arbitrator. In addition to security of tenure, the Convention gives arbitrators immunity from legal process with respect to acts performed by them in the exercise of their functions. Article 21(a) of the Convention provides that this immunity may only be waived by the Centre. It was mentioned earlier that a tribunal may be asked to render an award notwithstanding the failure of a party to appear or to present its case before the tribunal. Article 45(1) of the Convention, however, provides that such a failure of a party to participate in the proceeding "shall not be deemed an admission of the other party's assertions." The tribunal must therefore independently satisfy itself whether those assertions are well founded. Before rendering an award, the tribunal must moreover notify, and grant a period of grace to, the defaulting party unless the tribunal is satisfied that the party does not intend to appear or to present its case. In all cases, Article 48(3) of the Convention insists, the arbitral award must "state the reasons upon which it is based." There is no scope under the Convention for the parties to agree otherwise.

Article 53(1) of the Convention, it will be recalled, provides in categorical terms that an award made pursuant to the Convention shall be binding on the parties and not subject to any appeal or to any other remedy except those provided for in the Convention. The parties, therefore, cannot validly agree that the award may be appealed or otherwise proceeded against outside the confines of the Convention. Nor, on the other hand, can the parties bind themselves not to seek the remedies provided for in the Convention. 39 The provisions of the Convention on those remedies do not offer that option. It was pointed out in section II of this paper that the ground for annulment of manifest excess of powers supports the exercise of party autonomy under the Convention. Apart from the fact that the parties cannot deprive themselves of the right to resort to the remedy, other grounds for annulment may be regarded as reinforcing other limits of party autonomy. Thus, Article 48(3) of the Convention, which prevents the parties from dispensing with reasons for the award, has an obvious counterpart in the ground for annulment of failure to state such reasons. The mandatory provisions of the Convention regarding the number and nationality of the arbitrators have an equally obvious sanction in the ground for annulment of improper constitution of the tribunal. The ground for annulment for breach of a fundamental rule of procedure reflects a more general limit applicable to the parties as well as the arbitrators. The example most commonly given of a fundamental rule of procedure is the one calling for the parties to be treated equally and for each of them to be given full opportunity of presenting its case. 40 The Convention of course endorses this rule. As mentioned above, Article 45(2) of the Convention requires that a defaulting party be notified, and ordinarily granted a period of grace, before the tribunal renders its award. In addition, Article 49(2) of the Convention provides that a tribunal may comply [Page33:] with a party's request for rectification of the award only after notice to the other party. It may be said that the rights of the parties clearly do not extend so far as to entitle them to disregard such elementary procedural fairness. An agreement of the parties that did so would itself have to be disregarded by the arbitrators.

IV. Limits in the Institution Rules and Administrative and Financial Regulations

It will be remembered that Article 36 of the Convention outlines a procedure for the institution of arbitration proceedings under the Convention. The Institution Rules of ICSID supply the details of this procedure. There are seven rules in the Institution Rules. They deal with the contents of the request for arbitration, the number of copies in which it should be filed, the acknowledgment of the request by the Secretary-General of the Centre and his transmission of a copy of the request to the other party, the registration or refusal of registration of the request by the Secretary-General and the contents of his notice of registration or refusal of registration. As indicated in section II of this paper, the parties may to a considerable extent depart from the provisions of the Arbitration Rules. The parties lack such freedom in respect of the provisions of the Institution Rules, which, after all, elaborate on provisions of the Convention that are themselves mandatory.

The Administrative and Financial Regulations of the Centre consist of 34 regulations. These include regulations on such topics as the procedures of the Administrative Council of the Centre, the conditions of employment of the staff of the Secretariat and the administrative budget of the Centre. The provisions of many of the other regulations, however, are of direct relevance to individual arbitration proceedings. These notably include the provisions of Administrative and Financial Regulation 14 and Administrative and Financial Regulations 22-28.

Administrative and Financial Regulation 14 establishes a system for the financing of the direct costs of proceedings. These comprise the fees and expenses of the arbitrators and the out-of-pocket expenditures incurred by the Centre for the proceeding in question. As previously pointed out, the parties may agree in advance with the tribunal that the arbitrators should receive fees and expenses different from those specified in the Schedule of Fees of the Centre. Administrative and Financial Regulation 14(3) insists, however, that all payments, including reimbursement of expenses, to the arbitrators "shall in all cases be made by the Centre and not by or through either party to the proceeding." Under Administrative and Financial Regulation 14(3), the parties will be requested by the Secretary-General, at intervals of three to six months, to advance to the Centre, generally in equal shares, the amounts estimated by the Secretary-General to be required by the Centre to meet the fees, expenses and out-of-pocket expenditures to be incurred in the next three to six months. A failure of the parties to make a requested advance may result in the suspension, and ultimately in the termination, of the proceeding. 41

Reference was made in section II of this paper to the privacy of arbitration proceedings under the ICSID Convention. Such privacy is subject to important qualifications in the Administrative and Financial Regulations. Administrative and Financial Regulation 23 [Page34:] requires the Secretary-General of the Centre to maintain a register for each request for arbitration. Under the regulation, the Secretary-General must enter into the register "all significant data concerning the institution, conduct and disposition" of the case. The regulation singles out certain data for special mention in this connection. These are data concerning the method of constitution and membership of the tribunal and, with respect to any award, data regarding any request for rectification, interpretation, revision or annulment, and any stay of enforcement of the award. 42 Regulation 23 declares that the registers "shall be open for inspection by any person." Irrespective of the wishes of the parties, therefore, the existence, current status and ultimate disposition of an arbitration proceeding under the ICSID Convention are matters of public record. Administrative and Financial Regulation 22(1) moreover provides that the Secretary-General shall appropriately publish information about the registration of requests for arbitration and the date and method of termination of each proceeding. Pursuant to this provision, register entries for pending proceedings are published in the ICSID Annual Report and in the Centre's semi-annual newsletter, News from ICSID. 43 They will soon also be available on the website of the Centre.

Administrative and Financial Regulation 24(1) provides that, during the pendency of a proceeding, the Secretary-General of ICSID will be the channel of written communications between the parties on the one hand and the arbitrators on the other hand. Administrative and Financial Regulation 24(2) specifies that instruments and documents should be introduced into the proceeding by transmitting them to the Secretary-General, who will retain the original for the files of the Centre and arrange for the appropriate distribution of copies. Administrative and Financial Regulation 25 requires the Secretary-General to appoint a secretary for each arbitral tribunal constituted under the Convention. The appointee, who is always drawn from the legal staff of the Secretariat of the Centre, will represent the Secretary-General in the proceeding and perform most of his functions with regard to the proceeding. Apart from the functions already mentioned, these include, in accordance with Administrative and Financial Regulations 26 and 27, making or supervising arrangements for the holding of proceedings at the seat of the Centre or elsewhere and providing "such other assistance as may be required in connection with all meetings" of the tribunal. 44 In addition, Administrative and Financial Regulation 28 provides that the Secretary-General will have custody of the original texts of all instruments or documents filed or prepared in connection with the proceeding and the responsibility of preparing any certified copies thereof requested by the parties. None of these provisions of the Administrative and Financial Regulations will yield to contrary agreement of the parties. The extensive administrative support given to proceedings under these provisions of Administrative and Financial Regulations 24-28, the publicity accorded to proceedings under Administrative and Financial Regulations 22(2) and 23, and the financial arrangements of Administrative and Financial Regulation 14 help further to assure the effectiveness and integrity of the ICSID arbitral process.

V. Prospects and conclusion

While the consent of the parties is "the cornerstone of the jurisdiction of the Centre," the only formal requirement that the ICSID Convention lays down with respect to such [Page35:] consent is that it be in writing. In particular, the consent of the parties need not be contained in a single instrument, such as an investment contract. The Report of the World Bank Executive Directors accompanying the Convention suggests, as one alternative to consents in a single instrument, that "a host State might in its investment promotion legislation offer to submit disputes arising out of certain classes of investments to the jurisdiction of the Centre, and the investor might give his consent by accepting the offer in writing." 45 Some 20 countries have followed this suggestion and included in their investment laws provisions setting forth such general "offers" or consents to submit disputes with foreign investors to arbitration under the ICSID Convention. Comparable provisions may be found in most of the approximately 1,000 bilateral investment treaties (BITs) that have been made over the past 15 years. 46 There are also similar provisions in four recent multilateral treaties dealing with investment. These are the North American Free Trade Agreement (the NAFTA), 47 the Colonia Investment Protocol of Mercosur, 48 the Cartagena Free Trade Agreement49 and the Energy Charter Treaty. 50 Under these bilateral and multilateral treaties, each State typically agrees to give investors from the other State or States fair and equitable treatment and full protection and security, to allow them to repatriate profits and to refrain from capricious or uncompensated expropriations of their investments. As just indicated, most BITs and the four multilateral treaties also contain provisions whereby each State consents to submit to arbitration under the ICSID Convention disputes with investors from the other treaty partner or partners. Each of the four multilateral treaties and many of the BITs also set forth the consent of each State party to submit disputes with investors from the other State or States involved to arbitration under the Additional Facility Rules of ICSID or under the Arbitration Rules of the United Nations Commission on International Trade Law (UNCITRAL). 51 The Energy Charter Treaty and some BITs add as a further option arbitration under the Rules of the Arbitration Institute of the Stockholm Chamber of Commerce. 52 A few BITs also, or instead, refer in this context to arbitration under the Rules of Arbitration of the International Chamber of Commerce (ICC). 53 A foreign investor covered by such a provision in a BIT or multilateral treaty may give its own consent to the relevant form of arbitration after a dispute has arisen, and on that basis resort to arbitration against the State concerned. The investor may therefore have recourse to arbitration despite the absence of an earlier arbitration agreement or indeed other contractual relationship between the parties. One commentator has suggested that this be called "arbitration without privity." 54

Until the mid-1980s, jurisdiction in all of the cases brought to ICSID was founded upon consents recorded in the traditional manner, by a clause in a single instrument such as an investment contract between the parties. Well over half of the cases that have since [Page36:] been submitted to the Centre have been brought by investors lacking such prior contractual relations with the State party and relying for the consent of the State on the provisions of one of its investment treaties or, in three instances, on the similar provisions of an investment law of the State. Altogether, 20 arbitration proceedings of this kind have so far been instituted under the ICSID Convention. 55 It is in respect of such proceedings that there are in practice fewer opportunities for the exercise of party autonomy. Most obviously, the parties do not in this kind of case have an arbitration agreement jointly formulated before the dispute arose, when they might best have been able to make many of the choices open to them. As is often said, the parties may be ill-disposed to agree on anything after the dispute has arisen and the proceeding has been instituted. Even if that were not so, however, in cases brought under the BITs and multilateral treaties, the parties may often lack options that they would otherwise have had. In many of the BITs and in each of the above-mentioned four multilateral treaties, there are provisions specifying what law should be applied to the substance of all investor-to-State disputes submitted to arbitration under the treaties. 56 Provisions regulating other important aspects of the arbitral process have increasingly been included in such treaties on investment. To a significant extent, this is a result of the example set by the NAFTA. Its provisions on the arbitral settlement of investor-to-State disputes address, in addition to the law applicable to the substance of the disputes, such matters as the number of arbitrators and the method of their appointment, the place of proceedings and the availability of arbitral provisional measures. 57 In addition, the NAFTA introduces major exceptions to the privacy of the arbitral process. Thus, the NAFTA provides that the disputing State in an arbitration proceeding with an investor must furnish the other States parties to the NAFTA with copies of all pleadings filed in the arbitration. 58 According to the NAFTA, those other States also are entitled, on written notice to the disputing parties, to make submissions to the arbitral tribunal on questions of interpretation of the NAFTA. 59 The NAFTA moreover provides that when two or more claims of investors submitted to arbitration under the treaty have a question of law or fact in common, the claims may, in the interests of their fair and efficient resolution, be consolidated and determined by a single tribunal, even if by then one of the disputing parties desires otherwise. 60 Various of these provisions of the NAFTA have been replicated in subsequent treaties. 61 Provisions of this kind may be regarded as setting forth conditions of each State's treaty offer to submit to arbitration disputes with investors from the other treaty State or States. A covered investor must accept the offer subject to those conditions or not at all. The State party to the dispute will, for its part, be bound by the treaty to adhere to such conditions, except to the extent that the treaty itself authorizes the State to agree with the disputing investor on alternatives. 62 As applied to an individual case, therefore, the treaty will in effect have curtailed the autonomy of the disputing parties. Another way of putting this is that the provisions concerned will have fostered uniformity in the settlement of possibly many disputes under the same treaty. This obviously is one of the primary purposes of the provisions.

In 1995, negotiations were launched within the Organization for Economic Cooperation and Development (OECD) for the conclusion of a Multilateral Agreement on Investment (MAI). 63 Although negotiated by the European Community and the 29 OECD member countries only, the MAI would also be open to accession by nonOECD members. The current draft of the MAI provides substantive protections as to general standards of treatment, currency transfers, expropriations and so on, similar to those found in BITs and in the four multilateral treaties referred to above. 64 It is [Page37:] envisaged that, like those treaties, the MAI will also provide for the arbitral settlement of disputes between parties to the MAI and investors from other parties to the MAI. The current draft of the MAI sets forth the consent of the parties to the submission of such disputes to arbitration under the ICSID Convention, the ICSID Additional Facility Rules, the UNCITRAL Arbitration Rules or the ICC Rules of Arbitration. 65 Under its current draft, the MAI would have most of the above-described features of the NAFTA investor-to-State dispute-settlement provisions and would, in addition, regulate the fees and expenses of arbitrators and make their awards "publicly available." 66

Since the MAI negotiations were launched, the initiative has come under criticism from a number of well-known non-governmental organizations (NGOs). As a publication of one such NGO points out, "much of the criticism of the MAI involves the investor-state dispute mechanism." 67 For these NGOs, the mechanism raises the specter of local laws regarding the environment, health and labor being challenged by investors, as allegedly expropriatory, for example, in investor-to-State proceedings under the MAI. 68 In a joint statement on the MAI by the NGOs, the mechanism is also criticized for not being "transparent." 69 According to the NGOs, the investor-to-State dispute-settlement provisions should allow "full public access to dispute proceedings." 70 Specific proposals in this respect appear to include making written pleadings and hearings public and affording interested members of the public the right to make submissions to the arbitral tribunal. 71 The concerns underlying these proposals have also been expressed in respect of the investor-to-State dispute settlement provisions of the NAFTA. 72 These proposals are made in a climate of growing demands not only by NGOs but also by governments for greater openness or transparency in international decision-making generally. 73 In this climate, the above-mentioned proposals of NGOs regarding the investor-to-State proceedings may to some extent be realized, if not in a MAI, then in other treaties on investment.

Reflecting the "consensual character" of arbitration proceedings under the ICSID Convention, parties have much freedom to agree on the rules that will apply in the proceedings. As explained in sections III and IV of this paper, the freedom of the parties is circumscribed by various provisions of the Convention, Institution Rules and Administrative and Financial Regulations. These provisions help to assure the effectiveness, integrity and impartiality of the process in all cases submitted to arbitration under the ICSID Convention. Most of these cases are now brought to the Centre on the basis of provisions in bilateral and multilateral investment treaties setting forth the consent of each State to the submission to arbitration of disputes with any of a possible multitude of investors from the other State of States concerned. Increasingly, such consents are made subject to conditions that, in the interests of uniformity and coherence in the settlement of potentially many disputes under the same treaty, effectively curtail the scope for the exercise of party autonomy in individual cases. Arbitration proceedings under the ICSID Convention (and Additional Facility Rules) receive publicity through the registers maintained by the Secretary-General of ICSID and the publications of the Centre. In investor-to-State proceedings instituted pursuant to the NAFTA and treaties influenced by it, the other States receive copies of pleadings and may make submissions to the arbitral tribunal. A number of NGOs have made demands for even greater openness of the process. To the extent that such demands are met, disputing parties will relinquish more of their ownership of the proceedings. This may eventually be seen as a predictable result of the enormous expansion of arbitral jurisdiction under modern investment treaties and the importance of the issues that they entrust to the arbitral process.

1
The Convention on the Settlement of Investment Disputes between States and Nationals of Other States, Mar. 18, 1965, 575 U.N.T.S. 159 (Convention), is reprinted together with the Report of the World Bank Executive Directors accompanying the Convention (Report) in Doc. ICSID/2. A detailed commentary on the Convention by Christoph Schreuer is being published in installments in the ICSID Review - Foreign Investment Law Journal. The most recent installment, covering Articles 45-49, appears in 13 ICSID Rev. - FILJ 150 (1998).

2
See Doc. ICSID/3, Contracting States and Other Signatories of the Convention.

3
See Convention, supra, note 1, preambular paragraphs 4, 6 and 7.

4
See Report, supra, note 1, para. 23.

5
See id., para. 27, explaining that the term "investment" in Article 25(1) of the Convention was left undefined in view of the requirement of the consent of the parties. As the principal drafter of the Convention said, "[t]he parties thus have a large measure of discretion in deciding what constitutes an 'investment' in a particular context." See "Arbitration Under the ICSID Convention," in Selected Essays of Aron Broches: World Bank, ICSID and Other Subjects of Public and Private International Law 433, 436 (1995). In addition, Article 25(2)(b) of the Convention makes it possible for a juridical person with the nationality of the State party to the dispute to be a party to proceedings under the Convention if, because of foreign control, the parties have agreed that the juridical person should be treated as a national of another Contracting State.

6
See Report, supra, note 1, para. 39.

7
The Regulations and Rules of the Centre are reprinted with the Convention in Doc. ICSID/15, ICSID Basic Documents (Jan. 1985).

8
Doc. ICSID/5/Rev. 2, ICSID Model Clauses (Feb. 1993) suggests texts for agreements of the parties pursuant to most of these articles of the Convention.

9
Article 37(2)(b) of the Convention provides that if the parties do not agree on the number of arbitrators and the method of their appointment, the tribunal will consist of three arbitrators, one appointed by each party, and the third, presiding, arbitrator appointed by agreement of the parties. In accordance with Articles 12-16 of the Convention, ICSID maintains a Panel of Conciliators and a Panel of Arbitrators. Each Panel consists of up to four persons designated by each Contracting State and up to ten persons designated by the Chairman of the Administrative Council of the Centre (the President of the World Bank). The designees, who all serve for renewable periods of six years, are listed in Doc. ICSID/10. The parties are free to appoint arbitrators from outside the Panel of Arbitrators. It is only in respect of appointments of arbitrators made by the Chairman of the ICSID Administrative Council, as the default appointing authority of arbitrators under Article 38 of the Convention, that the appointees must be drawn from the Panel of Arbitrators.

10
Article 42(1) of the Convention provides that in the absence of such agreement, the tribunal should apply the law of the State party to the dispute (including its rules on the conflict of laws) and such rules of international law as may be applicable. On this subject, see "Applicable Substantive Law in Disputes between States and Foreign Private Parties: The Case of Arbitration Under the ICSID Convention," in I. Shihata, 2 The World Bank in a Changing World 455 (1995).

11
In this connection, see Schreuer, "Decisions Ex Aequo et Bono Under the ICSID Convention," 11 ICSID Rev. - FILJ 37 (1996).

12
For published commentary on this aspect of arbitration under the ICSID Convention, see, e.g., Brower and Goodman, "Provisional Measures and the Protection of ICSID Jurisdictional Exclusivity Against Municipal Proceedings," 6 ICSID Rev. - FILJ 431 (1991) and Delaume, "ICSID Tribunals and Provisional Measures: A Review of the Cases," 1 ICSID Rev. - FILJ 392 (1986).

13
Under Article 63(a) of the Convention, the proceeding may if the parties agree be held at the seat of an institution with which ICSID has made arrangements for the purpose. The institutions with which such arrangements have been concluded are the Permanent Court of Arbitration at The Hague, the Regional Arbitration Centres of the Asian-African Legal Consultative Committee in Cairo and Kuala Lumpur, the Australian Centre for International Commercial Arbitration in Melbourne, the Australian Commercial Disputes Centre in Sydney and the Singapore International Arbitration Centre. For an example of the text of such arrangements, see ICSID Second Annual Report 1967/1968, at pp. 1920. Article 63(b) of the Convention provides that the proceeding may be held at any other place agreed by the parties subject, however, to the approval of the arbitral tribunal after consultation with the Secretary-General of ICSID.

14
This would, of course, be done on the assumption that any amendments of the Arbitration Rules are likely to be helpful. For an example of an actual arbitration clause in which this is done, see Attorney General v. Mobil Oil New Zealand Ltd. and others, decision of the High Court of New Zealand, 2 ICSID Rev. - FILJ 497, pp. 501-02 (1987), reproducing the clause underlying the arbitration proceeding in Mobil Oil Corporation and others v. New Zealand, ICSID Case No. ARB/87/2.

15
Article 44 of the Convention specifically acknowledges this by referring to the possibility of procedural questions being covered by "rules agreed by the parties." According to Article 44, procedural questions not covered by such rules, or by the Convention or Arbitration Rules, will be decided by the arbitral tribunal.

16
In most cases, this preliminary procedural consultation is held in conjunction with the first session of the tribunal.

17
The ICSID Secretariat has developed a standard form of agenda for first sessions of arbitral tribunals listing these and other matters that the parties may agree upon. The form is reprinted at 13 ICSID Rev. - FILJ 100 (1998). For most of the matters listed that the parties may agree upon, the form cites provisions of the Convention and Arbitration Rules that will apply in the absence of agreement of the parties. The form was originally used as a check-list to assist the presiding arbitrator in complying with Arbitration Rule 20(1) (see text accompanying supra note 16) and came commonly to be circulated as an agenda for first sessions after parties in several cases requested this.

18
Arbitration Rule 20(2), however, specifically confines this to agreements of the parties that do not contravene the mandatory provisions of the Convention and Administrative and Financial Regulations. See infra secs. III and IV.

19
See Regulations and Rules of the Centre, Doc. ICSID/4/Rev. 1, at p. 100, note C to Arbitration Rule 31 [now Rule 32] (May 1975) (stating that "[i]t seems to follow from Article 48(5) of the Convention that, as a matter of principle, arbitration proceedings should not be public").

20
When the Centre does obtain such consent, the award is published in the ICSID Review - Foreign Investment Law Journal. See, e.g., Cable Television, Ltd. and another v. Federation of St. Kitts and Nevis, ICSID Case No. ARB/95/2, Award of Jan. 13, 1997, 13 ICSID Review - FILJ 328 (1998).

21
See Convention, supra, note 1, Art. 49(2).

22
See id. Art. 50(1).

23
See id. Art. 51(1).

24
See id. Art. 52(1).

25
See id. Art. 49(2).

26
See id. Arts. 50(2) and 51(3).

27
See id. Art. 52(3). On the Panel of Arbitrators of ICSID, see supra, note 9.

28
See Convention, supra, note 1, Art. 52(3).

29
See id. Art. 52(6).

30
See Amco Asia Corporation and others v. Indonesia, ICSID Case No. ARB/81/1, Award of June 5, 1990 and Decision on Supplemental Decisions and Rectification of Oct. 17, 1990, 1 ICSID Rep. 569 (1993); Liberian Eastern Timber Corporation v. Liberia, ICSID Case No. ARB/83/2, Award of Mar. 31, 1986 and Rectification of June 10, 1986, 2 ICSID Rep. 346 (1994).

31
In respect of Amco Asia Corporation and others v. Indonesia, ICSID Case No. ARB/81/1, Award of Nov. 20 1984, 1 ICSID Rep. 413 (1993) and Award of June 5, 1990 (supra note 30); Klöckner Industrie-Anlagen GmbH and others v. Cameroon, ICSID Case No. ARB/81/2, Award of Oct. 21, 1983, 2 ICSID Rep. 9 (1994) and Award of Jan. 26, 1988 (unpublished); Southern Pacific Properties (Middle East) Limited v. Arab Republic of Egypt, ICSID Case No. ARB/84/3, Award of May 20, 1992, 8 ICSID Rev. - FILJ 328 (1993); and Maritime International Nominees Establishment v. Guinea, ICSID Case No. ARB/84/4, Award of Jan. 6, 1988, 4 ICSID Rep. 54 (1997).

32
Amco Asia Corporation and others v. Indonesia, ICSID Case No. ARB/81/1, Decision of May 16, 1986, 1 ICSID Rep. 509 (1993); Klöckner Industrie-Anlagen GmbH and others v. Cameroon, ICSID Case No. ARB/81/2, Decision of May 3, 1985, 1 ICSID Rev. - FILJ 89 (1986); and Maritime International Nominees Establishment v. Guinea, ICSID Case No. ARB/84/4, Decision of Dec. 22, 1989, 5 ICSID Rev. - FILJ 95 (1990). Two other, as yet unpublished, ad hoc committee decisions were rendered on December 17, 1992 and May 3, 1990 in regard to the second awards made in the Amco Asia and Klöckner cases respectively (see supra note 31). The sixth award sought to be annulled was the award in the Southern Pacific Properties case (see supra note 31). In that case, however, the parties settled the dispute before the rendition of any ad hoc committee decision. For discussions of these cases, see, e.g., Broches, "Observations on the Finality of ICSID Awards," 6 ICSID Rev. - FILJ 321 (1991); Caron, "Reputation and Reality in the ICSID Annulment Process: Understanding the Distinction between Annulment and Appeal," 7 ICSID Rev. - FILJ 2 (1992); Craig, "The Final Chapter in the Pyramids Case: Discounting an ICSID Award for Annulment Risk," 8 ICSID Rev. - FILJ 264 (1993); Delaume, "The Pyramids Stand - The Pharaohs Can Rest in Peace," 8 ICSID Rev. - FILJ 231 (1993); and Feldman, "The Annulment Proceedings and the Finality of ICSID Arbitral Awards," 2 ICSID Rev. - FILJ 66 (1987).

33
Maritime International Nominees Establishment v. Guinea, ICSID Case No. ARB/84/4, Decision of Dec. 22, 1989, supra, note 32, para. 5.02.

34
For discussions of how arbitral tribunals have exercised this power, see Lamm, "Jurisdiction of the International Centre for Settlement of Investment Disputes," 6 ICSID Rev. - FILJ 462 (1991) and Rand, Hornick and Friedland, "ICSID's Emerging Jurisprudence: The Scope of ICSID's Jurisdiction," 19 N.Y.U. J. Int'l L. & Pol. 33 (1986).

35
For a discussion of this provision, see "The Convention on the Settlement of Investment Disputes Between States and Nationals of Other States: Applicable Law and Default Procedure," in Broches, Selected Essays, supra, note 5, 179, pp. 18487.

36
The independence of ICSID arbitrators is discussed in Shihata, "The Experience of ICSID in the Selection of Arbitrators," 6 News from ICSID, No. 1, at p. 4 (1994).

37
Or lack of membership in the ICSID Panel of Arbitrators, in the case of an appointee of the Chairman of the Administrative Council of the Centre under Article 38 of the Convention. See supra, note 9.

38
The disqualification procedure of the ICSID Convention is discussed in Tupman, "Challenge and Disqualification of Arbitrators in International Commercial Arbitration," 38 Int'l & Comp. L.Q. 26, pp. 43-45 (1989).

39
Cf. Gaillard, "Some Notes on the Drafting of ICSID Arbitration Clauses," 3 ICSID Rev. - FILJ 136, pp. 14243 (1988). For a somewhat different view, with respect to the remedy of annulment, see Delaume, "The Finality of Arbitrations Involving States: Recent Developments," 5 Arb. Int'l 21, pp. 33-34 (1989) (tentatively suggesting that an "exclusion agreement" in respect of the annulment remedy might be possible "within narrow limits").

40
See Maritime International Nominees Establishment v. Guinea, ICSID Case No. ARB/84/4, Decision of Dec. 22, 1989, supra note 32, para. 5.06 (citing Article 18 of the 1985 UNCITRAL Model Law on International Commercial Arbitration).

41
If only one of the parties fails to pay its share of a requested advance, however, the other party will be given the opportunity to pay that share in order to avoid a suspension of the proceeding. See Administrative and Financial Regulations, supra, note 7, reg. 14(3)(d).

42
Under the Convention, supra note 1, arts. 51(4) and 52(5), enforcement of an award may be stayed pending decision of a request for its revision or annulment.

43
See, e.g., 1998 ICSID Annual Report 6 and 15 News from ICSID, No. 1, at 2 (1998).

44
Further tasks performed by the secretary of the tribunal typically include the preparation, in collaboration with the presiding arbitrator, of minutes of hearings and drafts of routine procedural orders.

45
See Report, supra, note 1, para. 24.

46
For a study of such treaties, see R. Dolzer and M. Stevens, Bilateral Investment Treaties (1995).

47
North American Free Trade Agreement (NAFTA), Dec. 17, 1992, 32 ILM 289 (1993). For a general discussion of the investment provisions of the NAFTA, see Price, "An Overview of the NAFTA Investment Chapter: Substantive Rules and Investor-State Dispute Settlement," 27 Int'l Law. 727 (1993).

48
Protocol on the Reciprocal Promotion and Protection of Investments in Mercosur (Colonia Protocol), Jan. 17, 1994, Mercosur/CMC/Doc. No. 11/93.

49
Free Trade Agreement among Colombia, Mexico and Venezuela (Cartagena Free Trade Agreement), June 13, 1994.

50
Energy Charter Treaty, Dec. 17, 1994, 10 ICSID Rev. - FILJ 258 (1995). See generally The Energy Charter Treaty: An East-West Gateway for Investment and Trade (T. Wälde ed., 1996).

51
See NAFTA, supra, note 47, Art. 1120; Colonia Protocol, supra, note 48, Art. 9(4); Cartagena Free Trade Agreement, supra, note 49, Art. 1718(2); and Energy Charter Treaty, supra, note 50, Art. 26(4). See also, e.g., Treaty Concerning the Encouragement and Reciprocal Protection of Investment, Sept. 26, 1994, Trinidad and Tobago - United States, Art. 9(8). The Additional Facility Rules to which these treaties refer (along with the ICSID Convention and the UNCITRAL Arbitration Rules) were adopted by the Administrative Council of ICSID in 1978. Under these rules, which are reprinted in Doc. ICSID/11, ICSID Additional Facility (June 1979), the Secretariat of the Centre is authorized to administer certain types of proceedings between States and foreign nationals that fall outside the scope of the ICSID Convention. These notably include conciliation and arbitration proceedings for the settlement of investment disputes where either the State party or the home State of the other party is not an ICSID Convention Contracting State. See Additional Facility Rules, Art. 2(a).

52
See Energy Charter Treaty, supra, note 50, Art. 26(4)(c). See also, e.g., Agreement on the Promotion and Reciprocal Protection of Investments, Dec. 23, 1994, Algeria-Spain, Art. 11(2).

53
See Algeria-Spain BIT, supra, note 52, Art. 11(2). See also, e.g., Treaty Concerning the Encouragement and Reciprocal Protection of Investment, Dec. 12, 1983, Haiti-United States, Art. 7(3).

54
Paulsson, "Arbitration Without Privity," 10 ICSID Rev. - FILJ 232 (1995).

55
The resulting sharp increase in the overall size of the Centre's caseload is evident from the list of pending cases in the 1998 ICSID Annual Report (at pp. 6-10).

56
See, e.g., Agreement on Reciprocal Promotion and Protection of Investments, May 6, 1993, Estonia-Poland, Art. 7(2) (requiring the application of the law of the State party to the dispute and of "the rules and universally accepted principles of international law"); Energy Charter Treaty, supra, note 50, Art. 26(6) (requiring the application of the provisions of the treaty and of general international law).

57
See NAFTA, supra, note 47, Arts. 1123, 1130, 1131(1) and 1134.

58
See id. Art. 1127.

59
See id. Art. 1128.

60
See id. Art. 1126.

61
See, e.g., Cartagena Free Trade Agreement, supra, note 49, Art. 17, sec. B; Agreement on the Promotion and Reciprocal Protection of Investments, Jul. 10, 1995, MexicoSwitzerland, at Schedule on Settlement of Disputes between a Party and a Investor of the Other Party.

62
The NAFTA, for example, permits the disputing parties to agree on alternatives to the number of arbitrators and the method of their appointment prescribed in the treaty. See NAFTA, supra, note 47, Art. 1123.

63
This initiative is described in Witherell, "Towards an International Set of Rules for Investment: The OECD Initiative," 12 News from ICSID, No. 1, at p. 3 (1995).

64
See OECD Directorate for Financial, Fiscal and Enterprise Affairs, Multilateral Agreement on Investment: The MAI Negotiating Text (as of Apr. 24, 1998) ch. IV, www.oecd.org.

65
See id. ch. V(D)(2).

66
See id. ch. IV(1), (2) and (4) and ch. V(D)(19) and (D)(16)(d).

67
See MAI Provisions and Proposals: An Analysis of the April 1998 Text, Public Citizen 22, www.citizen.org.

68
See, e.g., The OECD Multilateral Agreement on Investment, World Wildlife Fund International Briefing, Mar. 1997, at p. 5.

69
See Friends of the Earth, Public Citizen and Sierra Club, International Coalition Launches Campaign Against the MAI, Feb. 12, 1998 and attached Joint NGO Statement, "substantive concern" no. 3, www.citizen.org.

70
See World Wildlife Fund Briefing, supra, note 68 and Joint NGO Statement, supra, note 69, para. 14.

71
See Joint NGO Statement, supra, note 69, para. 14.

72
See, e.g., "NAFTA Process 'Unacceptable,'" Toronto Globe and Mail, Aug. 25, 1998.

73
See, e.g., statements of U.S. President Clinton at the GATT 50th Anniversary, May 18, 1998, World Trade Organization Doc. WT/FIFTY/H/ST, and at the International Monetary Fund and World Bank Group Boards of Governors Annual Meetings, Oct. 6, 1998, www.pub.whitehouse.gov.