Annulment of ICSID Awards: Recent developments

The document analyzes recent trends in the annulment of awards under the International Convention for the Settlement of Investment Disputes (ICSID). It reviews seven publicly available decisions from 2009-2010, evaluating how ad hoc committees interpret the narrow grounds for annulment provided in Article 52. The analysis highlights the high threshold for successful annulment, the discretion of committees, and the distinction between the non-application and erroneous application of law.

• Annulment committees generally view their role as protecting the integrity of the ICSID system rather than acting as courts of appeal. They are not empowered to substitute their own judgments for those of the tribunals, and most maintain that their responsibility is not to "bring about consistency in the interpretation and application of international investment law."
• Under Article 52(1)(b), a manifest excess of powers is typically found if a tribunal lacked jurisdiction, disregarded applicable law, or based an award on the wrong law. While erroneous interpretation of law generally does not support annulment, some committees suggested that a "manifest error of law" could exceptionally be so "egregious" as to amount to a manifest excess of powers.
• Annulment based on a "serious departure from a fundamental rule of procedure" (Article 52(1)(d)) is difficult to achieve because tribunals have significant discretion. Committees often rule that exercising a discretionary power is an "exercise of that rule of procedure, and not a departure from that rule of procedure."
• The ground that an award failed to state its reasons (Article 52(1)(e)) is interpreted narrowly, requiring a "total absence of reasons" or reasons so contradictory they "completely cancel each other out." Committees have uniformly rejected all seven applications for annulment on this specific ground in the reviewed cases.
• Between September 1, 2009, and September 1, 2010, eight annulment decisions were issued. In the seven publicly available cases, Argentina's applications were granted in full or in significant part in Sempra and Enron, but rejected in Vivendi and Azurix. These successful annulments for Argentina released the state 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} }