What distinguishes ICSID arbitration from other forms of arbitration, and constitutes one of its key advantages, is that ICSID arbitral awards—whether final or interim—cannot be subject to substantive review by domestic courts. Under the ICSID Convention, such awards may only be reviewed in specific circumstances and strictly within the ICSID system, by either ICSID arbitral tribunals or ad hoc committees acting independently. Any action brought by a party before a national court seeking review of an ICSID arbitral award must be dismissed. Article 53(1) of the ICSID Convention governs this matter and provides as follows:
Article 53: 1. The award shall be binding on the parties and shall not be subject to any appeal or to any other remedy except those provided for in this Convention. Each party shall abide by and comply with the terms of the award except to the extent that enforcement shall have been stayed pursuant to the relevant provisions of this Convention.
In MINE v. Guinea [1], the issue arose as to whether ICSID arbitral awards could be reviewed by domestic courts. The ad hoc committee held that ICSID awards are not subject to appeal and that no post-award recourse may be sought before national courts.
Where an award is immune from all forms of legal challenge, the obligations it imposes—whether they involve monetary obligations, obligations to perform or refrain from specific acts—attain the status of res judicata. Such obligations may, in certain circumstances, affect the sovereign rights of the state. Although ICSID tribunals have the authority to impose non-pecuniary obligations—such as the reinstatement of a license, seizure of a specific asset (particularly real property), waiver of certain taxes, authorization for transfer of specific funds abroad, or granting entry and work permits to specified foreign personnel—published awards to date have almost exclusively imposed monetary obligations.
This tendency can be attributed to two factors: first, claimants often frame their claims in monetary terms; second, tribunals have sought to avoid the practical difficulties that states might face in complying with non-pecuniary obligations by instead issuing awards with a monetary component. It is expected that future awards will likewise include monetary obligations or present non-pecuniary obligations as alternatives, enforceable through an equivalent monetary award in the event of non-compliance. Such structuring facilitates enforcement and avoids undue interference with state sovereignty [2].
Once an ICSID tribunal renders its award, the only remedies available are those expressly set forth in the ICSID Convention. Pursuant to Article 53, no other recourse—including appeals—is available. In Jose Cartellone Construcciones, S.A. v. Hidroelectrica Norpataganica S.A. and in the Honduras case, the losing party petitioned the Argentine Supreme Court to reduce the monetary amount stated in the award. The court dismissed the case, citing Article 53(1) of the ICSID Convention.
An ICSID tribunal’s final award constitutes a binding res judicata; under the principle of ne bis in idem, no proceedings may be initiated in national or international fora concerning the same dispute between the same parties [3].
References
[1] ICSID Review – Foreign Investment Law Journal, Vol. 5, p. 101, [ICSID Case No. ARB/84/4], para. 4.02 (10 April 2010), available at: http://icsid.worldbank.org/ICSID/FrontServlet.
[2] Schreuer, C.H., “Non-Pecuniary Remedies in ICSID Arbitration,” Arbitration International, 2004, Vol. 20, No. 4, pp. 331–332.
[3] Toygun, op. cit., p. 145.