ICSID Annulment Procedure and the WTO Appellate System: The Case for an Appellate System for Investment Arbitration
29 Pages Posted: 11 Aug 2015
Date Written: January 10, 2015
In comparison to the WTO appellate system, an investment dispute settlement annulment committee has a very limited mandate. Consequently, in recent years, deficiency in the quality of some investment arbitration awards has reinvigorated the debate as to the need for an ICSID appellate facility. While some remain unconvinced of the relevance of such a facility, there is an emerging consensus that the deficiencies in the awards currently being made hinders the predictability of the jurisprudence of investment arbitration and casts doubt on the legitimacy of the system. The ICSID annual report of 2011 recognised the need for an appellate review mechanism for investment arbitration, but subsequent annual reports have been conspicuously silent on this topic and no steps have been taken to follow it up. However, with the WTO disputes settlement system being the only international third party adjudicative body with a functioning appeal system in the area of trade law, it is arguably necessary to think of it as an institution that will inspire the establishment of an investment appeal mechanism. Critics of this potential development argue that the WTO contains a significantly interconnected body of treaty law while the ICSID normally deals with more disparate sets of treaties. Among other things, this contention ignores the existence of customary international law in the crystallisation of both systems. In spite of the debate over the nature of the two systems, there is a need to acknowledge that an appellate system would at least help to improve both the awards and the ICSID’s legitimacy. While recognising the successes as well as the challenges so far faced by the WTO Appellate Body, we argue in this paper that an ICSID appellate system would enhance the legitimacy of investment arbitration, and institute fairness and balance among the various players in investment disputes.
Keywords: Investment Dispute Settlement, WTO Appellate Body, ICSID, International Law
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