BASICS ON INVESTMENT ARBITRATION (episode 2) by Busuyi Adedeji

Hyy peeps! so today we would be looking at the  Finality and Enforceability of Awards for investment arbitration under the ICSID Convention.

This is guaranteed under Art. 53 and 55 of the ICSID Convention. Art. 53, ICSID Convention provides thus:

‘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.’

Art. 53 addresses the effects of a final award on the parties to ICSID arbitration. It deals with three issues. One is the finality of an ICSID award: once an ICSID award has been rendered, the parties may not seek a remedy on the same dispute in another forum. Another issue is the absence of any external review of an ICSID award: ICSID’s provides for its own review system which is exhaustive and self-contained. The third issue is the binding force of an award: non-compliance by a party with an award would be a breach of a legal obligation.

Art. 55 of the ICSID Convention provides thus:

‘Nothing in Art. 54 shall be construed as derogating from the law in force in any Contracting State relating to immunity of that State or of any foreign State from execution.’

Art. 55, ICSID Convention, indicates that investors can take some comfort in the fact that most parties have traditionally complied voluntarily with ICSID awards although in actual fact, the law provides that a waiver of sovereign immunity with respect to arbitration does not mean sovereign immunity has been waived with respect to execution of an award. It is not in doubt that the close links of the World Bank with the ICSID is helpful. The advantage of the support of the World Bank is that it promotes more compliance with ICSID awards because Contracting States do not want to be viewed as recalcitrant by World Bank authorities in order not to be considered less favorably in the future when the State is desirous of taking out a loan or credits.