Amendments to the Arbitration Rules of the International Centre for the Settlement of Investment Disputes (ICSID) (the “Amended Rules”) were approved by the ICSID Member States on March 21, 2022 and shall be effective on July 1, 2022.

The Amended Rules, which come 16 years after the last changes made in 2006, are expected to further enhance the efficiency and transparency of the investor-state dispute resolution proceedings, otherwise known as the ISD procedures.

The key proposed amendments to the ICSID Arbitration Rules are as follows:
 

• Enhance Procedural Efficiency

In principle, all documents and evidence in ISD arbitration proceedings should be submitted electronically (Article 4(2) of the Amended Rules).  With party consent, expedited arbitration procedures can be adopted (Article 75 of the Amendments), and bifurcation of proceedings, which had previously been left to the arbitral tribunal’s discretion, is now expressly stipulated in the Amended Rules (Article 42 of the Amended Rules). 
 

• Disclosure of Third-Party Funding

A new provision has been introduced requiring parties that utilize third-party funding to disclose such information when commencing arbitration or promptly upon entering into the relevant agreement (Article 14 of the Amended Rules).  The funded party should disclose the name and address of the third-party funder.  If the third-party funder is a corporate entity, the party who owns or controls the third-party funder should also be disclosed so that the arbitral tribunal can determine whether there may be any conflict of interest with the third-party funder.
 

• Amendments Related to Costs

The factors to be considered by the arbitral tribunal when allocating costs between parties have been clarified, and a decision on cost allocation must now state the reasons for the decision (Article 52 of the Amended Rules).  Cost decisions can also be made as interim decisions during the course of the proceedings, if necessary.  Meanwhile, a new provision has been added that allows the arbitral tribunal order the party making the claim or counterclaim provide security for costs, and if the order is not fulfilled, the ISD procedures may be suspended or discontinued (Article 53 of the Amended Rules). 
 

• Enhance Transparency 

A new chapter has been laid out to enhance transparency in ISD procedures (Articles 62-68 of the Amended Rules).  Parties will be deemed to have consented to the publication of awards unless they have objected within 60 days after the award is issued, and even if they do not consent, excerpts from the award may be partially published.  Additionally, ICSID will publish orders and decisions, in whole or in part, with the consent of the parties or upon the decision of the arbitral tribunal.  Regarding the transparency of hearings, the arbitral tribunal should allow a third party to attend hearings unless either party objects. 
 

• Expand the Application of ICSID-Related Rules

There has also been a significant change in the Additional Facility Rules of the ICSID, which could be applied in cases where one party is an ICSID Member State or a national of the Member State, while the counterparty is not.  It is now possible to resolve international investment disputes under ICSID’s Additional Facility Rules even if neither party is an ICSID Member State or a national of a Member State, or even in the case a regional economic integration organization (REIO), such as the EU, is a party to the dispute.
 

The proposed amendments to the ICSID rules will drastically overhaul the existing ISD system to respond to the various requests of Member States to improve investment treaty arbitration procedures and to clarify the factors that must be considered by the arbitral tribunal at each procedural stage of the arbitration.  If an ICSID arbitration is to be considered in the future, it would be important to consider the Amended Rules to ensure an efficient and effective dispute resolution.