Finality, Fairness, And Consistency Striking A Balance In Icsid Annulment Proceedings Concerning Arbitrator Bias

Abstract

A unique feature of the ICSID framework is the built-in control mechanism that allows parties to seek annulment of an otherwise final award via Article 52 of the Convention. Unlike arbitration in other contexts, this mechanism is the exclusive means for review of an ICSID award. While scholars and practitioners regard this as one of the most innovative features of the ICSID regime, many of the grounds for annulment remain underdeveloped. In particular, annulment committees have applied the “serious departure from a fundamental rule of pro- cedure” ground inconsistently.

Especially because challenges to arbitrators can occur dur- ing the appointment phase, during the arbitration itself, or during annulment proceedings, the proper standard for deter- mining bias remains convoluted. Accordingly, this Note exam- ines how different approaches to assessing arbitrator bias un- fold in annulment proceedings applying the “fundamental rule of procedure” ground. It argues that these differences have con- tributed to a greater number of unpredictable outcomes, under- mining a central purpose of ICSID. Two recent decisions—the Azurix and EDF annulments—highlight the divergent ap- proaches ad hoc committees have taken in addressing allegations of bias. This Note concludes by identifying the EDF approach as the most appropriate standard of review and dis- cusses possible routes for resolving differences in ICSID annul- ment decisions.