The ICSID Convention, Regulations and Rules: A Practical Commentary *

By Julien Fouret, Rémy Gerbay and Gloria M. Alvarez (eds)

Edward Elgar Publishing (2019)

1368 pages

ISBN 978-1-78643-523-1

General remarks

As soon as the reader opens the book, he/she is impressed by the list of contributors (renowned practitioners, academics and arbitrators), the detailed lists of cases, legislation, and international instruments cited therein. As such, after leafing through the first few pages, the reader has very high expectations.

The book certainly meets these expectations. The structure of the volume is easy and accessible, the content of the chapters is thorough and detailed, the analysis of the documents of the ICSID system is unique. As Meg Kinnear, ICSID Secretary-General, has written in her foreword to the book:

This new commentary, envisioned and realized by Julien Fouret, Rémy Gerbay and Gloria Alvarez, is a tremendous analysis of the foundational documents of the ICSID system.

I could not agree more. Among the many positive elements of the work, I would like to highlight three.

First, the contributors’ research is excellent. The book comprehensively addresses each element of the articles of the ICSID Convention¹ and its procedural rules, drawing the reader’s attention to the travaux préparatoires and to an impressive number of official documents, commentaries and arbitral tribunals’ awards.

This collection of arbitral tribunals’ decisions allows the reader to gain a comprehensive view of how provisions of the Convention have been interpreted. Although the existence and necessity of case-law in ISDS disputes are debated, thanks to the completeness of the references to arbitral awards, the Commentary shows that a certain degree of consistency has developed among the arbitral tribunals’ decisions on the interpretation of the Convention’s provisions.

Second, much effort is put into making the work navigable, readable and relevant to legal practice and academic research. In addition to reflecting the authors’ views, this ‘Practical Commentary’ will assist researchers and practitioners searching for decisions and interpretations by tribunals on each provision and principles set out the Convention.

Third, the Commentary elucidates the crucial role of the ICSID Convention within the Investor-state dispute settlement (ISDS) system. In recent years, frequent criticisms have been raised against the ISDS system and the decisions of the arbitral tribunals, including in ICSID cases. Member States, NGOs and other civil society groups have pointed to four main weaknesses of the ISDS system: lack of attention to non-commercial interests such as health, environment and human rights; lack of transparency of the procedures; lack of consistency among the arbitral tribunals’ decisions; and lack of effective participation of civil society. In a limited number of jurisdictions, those criticisms were so strong that the governments have decided to denounce the Convention and to withdraw their membership from it.² Although the purpose of the Commentary is not to analyse the political discussions around the Convention, it seems it implicitly responds to these political criticisms by describing – in an objective and analytical way – the origins and the raison d’être of the ICSID system, its evolution and the amendments to the Convention. Authors also address the procedural rules that helped tackle these criticisms, such as the implementation of new provisions and procedures increasing the transparency of the ICSID system and, as a consequence, its legitimacy.

The Commentary comprises 27 chapters divided in four parts. The chapters are preceded by an introductory section that analyses the preamble of the Convention which deals in particular with the notion of consent to arbitrate, the notion of investment and the notion of foreign investor.

Structure and content

The first chapter describes the origins and the structure of the Centre and covers the first 24 Articles of the Convention.

In the second chapter the authors cover Articles 25 to 27 of the Convention. The research and analysis carried out for Article 25 (on the jurisdiction of the Centre) are tremendous: all requirements for ICSID to exercise its jurisdiction over a dispute are thoroughly studied, thus giving the reader a comprehensive interpretation of one of the most important provisions of the Convention.

The third chapter deals with conciliation and covers Articles 28 to 35 of the Convention. Conciliation has not been used often to solve ICSID disputes so far. It is legitimate to believe that its moderate costs and expeditious proceedings compared to arbitration might convince the investors to resort to conciliation more frequently in the future.

The fourth chapter deals with Articles 36 to 55 of the Convention that are dedicated to Arbitration. The chapter includes, inter alia, a detailed analysis on the competence of the arbitral tribunal (Article 41) and on the law applicable to the merits of the dispute (Article 42). The contributors’ analysis on the latter provision highlights the complex interaction between the laws of the host State and the applicable rules of international law and provides for a description of the different approaches adopted by the arbitral tribunals on this issue. Other important provisions are meticulously studied, such as Article 47 (provisional measures), Article 52 (grounds that can be invoked for the annulment of the award), and Article 53 (recognition and enforcement of the award).

Chapters 5 to 10 cover Articles 56 to 75 of the Convention and the Signature Clause. In this chapter, the commentators analyse important issues of the ICSID conciliation and arbitration proceedings, such as the replacement and disqualification of conciliators and arbitrators, the costs of the proceedings, and the disputes between Contracting States on the interpretation of the Convention. This chapter also covers Articles 65 and 66 (procedure to be followed to amend the Convention) that have become fundamental, especially in recent years. These provisions have played an important role in the past, when the Convention was amended in 1984, 2003 and 2006. As well explained by the author, they will play a pivotal role in the future, when the potential alternatives to reform the ISDS system will be defined and implemented and the Convention will have to adapt to the new context.

Chapters 11 to 19 give an overview of the Administrative and Financial Regulations. This part includes, inter alia, a description of the general functions of the Secretariat and the immunities and privileges granted by the Convention to members of the commissions, arbitral tribunals or committees.

Chapters 20 to 27 analyse the ICSID Arbitration Rules, from the establishment of the arbitral tribunal to the rendering of the award. In this section, it is worth to mention the analysis on Article 37(2) of the Arbitration Rules on the submission of amicus curiae from non-disputing parties. Such provision, introduced with the 2006 amendment to the ICSID Arbitration Rules, is important as a procedural tool for interested third parties to have the opportunity to be heard by an arbitral tribunal, but also illustrates the flexibility of the ICSID system, which allows principles and practices to transform into binding rules aiming at improving the ISDS system, its transparency and legitimacy. This evolution is well outlined by the author who also describes the interaction between the ICSID Convention and other multilateral instruments, such as the 2014 UNCITRAL Rules on Transparency,³ and the Mauritius Convention.⁴

Concluding remarks

The ‘Practical Commentary’ is an impressive piece of scholarship with a pragmatic analytical approach on the most important set of rules for the settlement of ISDS disputes. It is a comprehensive and accessible treatment of the ICSID Convention, its Regulations and Rules. The diligent and terrific analysis of those provisions carried out by the 101 authors with extensive expertise in ISDS, shows how history, tradition and evolution coexist peacefully in the ICSID system, thanks to the flexible and elastic nature of the provisions of the Convention, its Regulations and Rules.

* The eBook version is priced from £22/$31 from https://play.google.com/store, https://www.ebooks.com/ and other eBook vendors, while in print the book can be ordered from the https://www.e-elgar.com/.

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