Columbia FDI Perspectives Perspectives on topical foreign direct investment
issues Editor-in-Chief: Karl P. Sauvant ([log in to unmask])

Managing Editor: Riccardo Loschi ([log in to unmask])

*The Columbia FDI Perspectives are a forum for public debate. The views
expressed by the authors do not reflect the opinions of CCSI or our
partners and supporters.*

No. 326   March 7, 2022

*The launch of a new generation of the ICSID Rules*


Meg Kinnear* <#m_4709264553708817167__edn1>

The regulations and rules of the International Centre for Settlement of
Investment Disputes (ICSID) are an important part of international
investment law. They are the most used rules of procedure in investor-state
dispute settlement (ISDS), having been applied in over 800 cases to date.
In late 2016, ICSID embarked on the most comprehensive amendment of the
rules in its history—setting in motion a process that is now nearing

Marking a major milestone, the Chair of the ICSID Administrative
Council—ICSID’s governing body—asked member states to vote on proposed
amendments on January 20, 2022. Votes must be cast by March 21, 2022. If
approved, the new rules will come into effect on July 1, 2022.

The request for a vote comes on the heels of ICSID’s sixth—and
final—working paper
issued on November 12, 2021. Developed over a period of five years, the
ICSID working papers proposed concrete changes to the ICSID rules and
anchored the most in-depth and sustained dialogue with member states and
the broader public in ICSID’s history.[1] <#m_4709264553708817167__edn2>

They have also served as the vehicle for developing and reflecting
consensus. The first working paper numbered over 900 pages; the sixth came
in at 80 pages. This reflects the progressive agreement forged by the six
working papers, three in-person consultations with member states, six
series of written comments, and hundreds of briefings and events.

The amended ICSID rules are a significant step forward in the discipline of
ISDS thanks to the contributions of many individuals. Although the
consultation period for these amendments was (necessarily) lengthy, their
implementation will be almost immediate. If adopted, disputing parties
could be filing cases under the new rules as of July 1, 2022.

Some things have not changed. The amendments remain procedural in nature
and do not affect investment treaties, nor do they make structural changes
to the institutions of dispute settlement. Similarly, these rules
scrupulously retain the balance of the interests of states and investors, a
primary objective of the original drafters. As a result, the updated rules
will feel familiar to users of the ICSID system.

At the same time, many of the amendments address proposals for procedural
reform that have been raised in numerous *fora* in the past decade. These
represent a significant change. For example:

   - *Further enhanced transparency*. The updated arbitration rules will
   ensure the increased publication of awards, orders and decisions, while
   offering parties the opportunity to redact confidential or protected
   information. Under the ICSID Convention, party consent is needed to publish
   awards and decisions—and the updated arbitration rules adhere to that
   requirement. But consent to publish is deemed given unless a party objects
   in writing within 60 days after an award is issued. Should a party object,
   the rules allow the Secretariat to prepare legal excerpts of the award.
   Awards, orders and decisions in proceedings under the Additional Facility
   will be published with redactions agreed by the parties.

   - *Tools to expedite proceedings*. States and investors encouraged ICSID
   to consider ways to reduce the time of proceedings which—in most cases—will
   mean a more cost-effective process for countries and investors. These
   include an option for expedited arbitration, mandatory case management
   conferences, the potential to consolidate or coordinate related cases,
   reduced time frames for various steps in the process, and mandatory
   timeframes for issuing awards and decisions.

   - *New disclosure requirements for third-party funding*. Parties are
   obliged to disclose the name and address of any non-party from which they
   received funding, directly or indirectly, under the amended arbitration
   rules. As third-party funding has increased in recent years, this new
   disclosure requirement serves to avoid inadvertent conflicts of
   interest—such as between a third-party funder and a member of a tribunal.

   - *Broader access to ICSID rules and services*. Amendments to the ICSID
   Additional Facility Rules for Arbitration and Conciliation enlarge access
   to ICSID, including where neither the state nor the investor is an ICSID
   member state or a national of one. This will make the ICSID rules available
   to disputing parties who otherwise might have been limited to commercial
   arbitration rules. The amendments to the Additional Facility will also
   allow Regional Economic Integration Organizations—such as the European
   Union—to access ICSID arbitration and conciliation under the amended
   Additional Facility Rules.

   - *New rules for mediation and fact-finding*. The proposals include
   ISDS-specific rules to administer mediation and fact-finding. By increasing
   the number of dispute-settlement procedures offered by ICSID, parties are
   given a unique means of resolving disputes and a greater choice in deciding
   what works best for resolving their disputes.

Once adopted, ICSID will organize a series of presentations for states and
practitioners to highlight new aspects of the rules and ensure that
disputing parties take advantage of new tools in the rules. ICSID will also
publish updated web content—including templates, charts and other
demonstrative tools. Member states are encouraged to approve these
proposals as early as possible, and to reach out to ICSID if there are any
questions on the amended rules or the voting process.


* <#m_4709264553708817167__ednref1> Meg Kinnear ([log in to unmask]) is
Secretary General of the International Centre for Settlement of Investment
Disputes (ICSID). The author wishes to thank Nathalie Bernasconi, Bart
Legum and Antonio R. Parra for their helpful peer reviews.

[1] <#m_4709264553708817167__ednref2> See the proposed amendments to the
ICSID rules and Working Papers
<>, as well as
feedback received on the proposals.

*The material in this Perspective may be reprinted if accompanied by the
following acknowledgment: “Meg Kinnear, ‘The launch of a new generation of
the ICSID Rules,’ Columbia FDI Perspectives No. 326, March 7, 2022.
Reprinted with permission from the Columbia Center on Sustainable **Investment
(*** <>*).” A copy should
kindly be sent to the Columbia Center on Sustainable Investment at *
*[log in to unmask]* <[log in to unmask]>*.*

For further information, including information regarding submission to the
*Perspectives*, please contact: Columbia Center on Sustainable Investment,
Riccardo Loschi, [log in to unmask]; Luca Jobbagy,
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The Columbia Center on Sustainable Investment (CCSI), a joint center of
Columbia Law School and the Earth Institute at Columbia University, is a
leading applied research center and forum dedicated to the study, practice
and discussion of sustainable international investment. Our mission is to
develop and disseminate practical approaches and solutions, as well as to
analyze topical policy-oriented issues, in order to maximize the impact of
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*Most recent Columbia FDI Perspectives*

·       No. 325, James Otto, “How FDI in the mining sector can assist
communities to achieve sustainable development,” Columbia FDI Perspectives,
February 21, 2022

·       No. 324, Charlie Garnjana-Goonchorn, “An Advisory Centre on
International Investment Law: Is perfect the enemy of good?,” Columbia FDI
Perspectives, February 7, 2022

·       No. 323, Julien Chaisse, “FDI and sustainable development in the
EU-China investment treaty: Neither high nor low, just realistic
expectations,” Columbia FDI Perspectives, January 24, 2022

·       No. 322, Mohammad Saeed, “Implementing an Investment Facilitation
Framework for Development: Lessons from the Trade Facilitation Agreement,”
Columbia FDI Perspectives, January 10, 2022

·       No 321, Peter Muchlinski, “Promoting responsible business through
the revised ILO Tripartite Declaration,” Columbia FDI Perspectives,
December 27, 2021

*All previous FDI Perspectives are available at *

*Karl P. Sauvant, PhD*

*Resident Senior Fellow*
*Columbia Center on Sustainable Investment*
Columbia Law School - The Earth Institute, Columbia University
435 West 116th St., Rm. JGH 825, New York, NY 10027
| p: (212) 854 0689 | cell: (646) 724 5600 e: [log in to unmask]
| w: | t: @CCSI_Columbia

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