New Developments at the International Center for the Settlement of Investment Disputes

On May 30, 2024, the ABA International Law Section’s International Arbitration Committee had the honor of hosting at its monthly meeting a presentation by Ms. Meg Kinnear, former Secretary General of the International Centre for Settlement of Investment Disputes (ICSID).

Ms. Kinnear served as the Secretary General of the ICSID for over 15 years until stepping down in June 2024, and previously worked as the director general and as senior general counsel at the Trade Law Bureau of Canada. Ms. Kinnear is the author of numerous articles in the field of international investment law and arbitration, as well as the coauthor of a commentary on investment disputes under NAFTA.

Recent General Trends of Cases before ICSID

Ms. Kinnear addressed the latest trends in the cases administered by ICSID, which showed a significant increase in the year 2023, with 57 newly registered arbitrations, a higher increase than in previous years. Notably, a prominent portion of new cases (20) registered by the Centre in 2023 are governed by the UNCITRAL Arbitration Rules, rather than the ICSID Arbitration or Additional Facility Rules. There was also a gradual growth in the use of multilateral treaty cases, especially the Energy Charter Treaty (ECT) and the NAFTA/USMCA. Finally, resulting from the recent reforms of the ICSID Additional Facility Rules, last year ICSID saw its first case naming as respondent the European Union, considered a Regional Economic Integration Organization (REIO) for purposes of the Rules.

The Centre put forward efforts to enhance regional and gender diversity in terms of arbitrator appointments in ICSID cases, especially when the Centre itself was charged with appointing arbitrators or when asked to compile a list of suggested arbitrators for the parties to agree on.

Reception of the Reformed 2022 ICSID Arbitration and Additional Facility Rules

Ms. Kinnear highlighted that, since the new ICSID Arbitration Rules and ICSID Additional Facility Rules entered into force in July 2022, the Centre had seen 67 cases registered under these new rules, which apply to any prospective case unless the instrument of consent specifies otherwise (in which case the date of giving consent is determinative).

Even though the new rules incorporate the possibility of expedited proceedings in case both parties to the arbitration agree, these have been requested only in two instances, with the respondent States declining an expedited arbitration in both cases.

The issue of transparency has become increasingly significant, with States adopting various approaches, including opting out of the heightened level of transparency offered by the new rules or adopting special transparency regimes to be applied instead of the rules’ transparency provisions. Nevertheless, Ms. Kinnear clarified that the Centre continues to bolster the publication of awards, rules and orders with the consent of the parties to ensure accessibility to the body of international investment law.

Code of Conduct

During the session, Ms. Kinnear discussed the adoption and basic rules of the Code of Conduct for Arbitrators in International Investment Disputes (Code of Conduct) developed in collaboration with the United Nations Commission on International Trade Law (UNCITRAL). The Code of Conduct is meant to complement any provisions of the instrument of consent on the conduct of an arbitrator especially in relation to conflicts of interest, disclosure and independence and impartiality. Ms. Kinnear underscored that the Code of Conduct extends the arbitrators’ duty of impartiality and independence not just to present and past, but also to prospective financial, business, professional or personal relationships. The Code of Conduct addresses topics such as double hatting, the arbitrators’ duty of diligence, limits on the use of tribunal secretaries, ex parte communications and confidentiality.