Annulment of ICSID Awards: Recent developments

This research paper examines the grounds and possibilities for annulling awards under the International Convention on the Settlement of Investment Disputes (ICSID), focusing on eight decisions issued by annulment committees between September 1, 2009, and September 1, 2010. The author analyzes how these committees interpret their roles and apply the limited grounds for annulment set forth in Article 52, noting that while most applications are rejected, some have resulted in significant financial relief for respondent states.

• The ICSID Convention provides a restrictive system for challenging awards, limiting relief to specific and narrow grounds for 'annulment' and prohibiting appeals or other remedies. This differs from other arbitration regimes that allow review by national courts based on domestic law or public policy, thereby increasing the stakes for respondent states.
• Annulment committees generally view their role as protecting the integrity of the ICSID system rather than acting as courts of appeal. They maintain they are not empowered to substitute their own judgments for those of the tribunals, although there is some inconsistency; for example, the Vivendi committee suggested that Article 52(1)(e) is more similar to an ordinary appeal.
• Under Article 52(1)(b), a tribunal 'manifestly exceeds its powers' if it lacks jurisdiction, disregards applicable law, or bases an award on the wrong law. While generally held that erroneous interpretation of law does not support annulment, some committees in the analyzed period suggested that 'egregious' or 'gross' misinterpretations could potentially amount to a failure to apply the proper law.
• Annulment based on a 'serious departure from a fundamental rule of procedure' under Article 52(1)(d) is difficult to achieve because tribunals have significant discretion. Committees often rule that the exercise of a discretionary power is not a 'departure' from a rule. Furthermore, many committees require proof that the departure substantially impacted the decision or deprived a party of intended protections.
• The ground for annulment regarding the failure to state reasons under Article 52(1)(e) is interpreted very narrowly. It typically requires a 'total absence of reasons' or reasons so contradictory they 'completely cancel each other out.' Tribunals are not required to address every argument raised by the parties, and committees may supplement reasoning rather than annul the decision.
• Between September 1, 2009, and September 1, 2010, eight ICSID annulment decisions were issued. Of the seven publicly available cases discussed, Argentina's applications were granted in full or in significant part in the Sempra and Enron cases, which collectively released Argentina from paying over US$200 million in damages.

APA

Johnson, L. (2011). Annulment of ICSID Awards: Recent developments. International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/dci_2010_annulment_icsid_awards.pdf

Chicago

Johnson, Lise. Annulment of ICSID Awards: Recent developments. International Institute for Sustainable Development, 2011. https://www.iisd.org/system/files/publications/dci_2010_annulment_icsid_awards.pdf.

Wikipedia

{{cite report |last1=Johnson |first1=Lise |title=Annulment of ICSID Awards: Recent developments |publisher=International Institute for Sustainable Development |date=2011 |url=https://www.iisd.org/system/files/publications/dci_2010_annulment_icsid_awards.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{johnson2011annulment, author = {Johnson, Lise}, title = {{Annulment of ICSID Awards: Recent developments}}, institution = {International Institute for Sustainable Development}, year = {2011}, url = {https://www.iisd.org/system/files/publications/dci_2010_annulment_icsid_awards.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }