Annulment under ICSID :Resuscitate right to appoint arbitrators

The International Centre for Settlement of Disputes (ICSID) recently completed fifty one years on 14th October, 2017. Its glorious existence is marked by its success of being self-contained that is evidenced by its final and binding decisions. For this reason among others, it is often touted to be an efficient and popular institution for resolving arbitral disputes. However, it carries a malignancy that invades the soul of arbitration and is overlooked.  The freedom and flexibility ensured by arbitration to allow parties to choose their arbitrators as a matter of right is the spirit of arbitration that makes it a popular mode of resolving disputes between parties. However, this basic and fundamental right of the parties is partly and summarily withdrawn under the ICSID at the final stage ie the annulment. The issue concerning appointment of arbitrators at the annulment stage was briefly addressed by Hamid Gharavi, a partner at the international arbitration practice group at Derains & Gharavi in 2014 in his article “ICSID annulment committees: the elephant in the room”

In the same vein of argument, it is surprising that the situation has not changed or caught the attention it deserves. Under the ICSID Convention the first stage of proceedings allow parties to choose their arbitrators and on failure to make an appointment within 90 days, the Secretariat General makes the appointment upon consultation with the parties. This feature of offering the parties two opportunities to choose their arbitrators indicates the importance of this right that is recognized by the ICSID. The sudden, unwarranted and disappointing disappearance of this right at the final stage is akin to the unexpected death of a beloved character in a play. It is difficult to fathom the reasons and the need for its premature exit, given that it is the final stage of adjudication of high-stake disputes.  The Secretariat General who then makes the appointment has the wide choice from a selected pool to make appointments that cannot be challenged or vetoed by the parties.

It would perhaps be advisable to resuscitate this right at the final stage. Alternatively, to offer the right to be consulted, with regards to the appointment made with the possibility to veto the decision made on their behalf. Presently, it is an awkward situation that the flexibility guaranteed and expected under an arbitral process to appoint its adjudicators is partly withdrawn.

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