Process Overview
ICSID Hearing in Electrical S.A. v. Hungary
Washington, D.C.,May 2014
ICSID offers rules designed specifically for the resolution of international investment disputes between investors and States. The two main instruments are the ICSID Convention and the ICSID Additional Facility, which provide the procedural framework for arbitration, conciliation and fact-finding proceedings. This framework is supplemented by detailed Regulations and Rules.
In addition to administering proceedings under the ICSID rules, the Centre handles arbitration cases under other rules, such as the UNCITRAL Arbitration Rules, and ad hoc investor-State and State-State cases. The Centre’s services are also available for mediation of investment disputes and other alternative dispute resolution mechanisms.

While ICSID provides a wide range of services during the course of a proceeding, it does not itself make procedural rulings or decide the dispute. Independent conciliation commissions and arbitral tribunals constituted in each case are vested with the power to rule on procedural issues and resolve the parties’ dispute.

The steps in each proceeding under the current ICSID rules are described generally on this website. The Centre has also published Practice Notes for Respondents in ICSID Arbitration. This should not be construed as legal advice.

Features of the ICSID Convention

The ICSID Convention provides the basic procedural framework for conciliation and arbitration of investment disputes arising between ICSID Member States and investors that qualify as nationals of other Member States. It is a treaty among Member States establishing an independent, impartial and self-contained system.

ICSID proceedings are delocalized from domestic procedures. This means that local courts do not intervene in the ICSID process. Some implications of the self-contained system and other main features include:
  • Awards in ICSID Convention arbitrations are final and binding, and may not be set aside by the courts of any Member State (Article 53 of the Convention).
  • The limited post-award remedies available are set out in the Convention itself (Articles 49 to 52 of the Convention).
  • All Members States, whether or not parties to the dispute, recognize and enforce ICSID Convention monetary awards as final judgments in any Member State (Article 54 of the Convention).
  • Once disputing parties consent to ICSID arbitration and unless they agree otherwise, they accept ICSID arbitration as the exclusive remedy (Article 26 of the Convention).
  • A Member State cannot give diplomatic protection to any of its nationals which have consented to arbitration under the Convention, except in limited circumstances (Article 27 of the Convention).
  • The place of proceedings, i.e., where hearings are held, has no legal significance in Member States (Articles 62 to 63 of the Convention).
  • Participants enjoy immunity from legal process in the conduct of the proceedings (Articles 21 to 22 of the Convention). 

There are several essential jurisdictional conditions for access to arbitration or conciliation under the ICSID Convention (Article 25 of the ICSID Convention):

  • The dispute must be between an ICSID Member State and an individual or company that qualifies as a national of another ICSID Member State.
  • The dispute must be a legal dispute arising directly out of an investment.
  • The disputing parties must have consented in writing to the submission of their dispute to ICSID arbitration or conciliation.
Provided that there is no manifest lack of these mandatory jurisdictional conditions, a conciliation or arbitration case is registered and a Conciliation Commission or Arbitral Tribunal is constituted to resolve the parties’ dispute.

For a basic outline of the process in ICSID Convention proceedings, see:
Features of the ICSID Additional Facility

The ICSID Additional Facility Rules authorize the ICSID Secretariat to administer certain types of proceedings between States and foreign nationals which fall outside the scope of the Convention.

These include:
  • Conciliation and arbitration of disputes arising directly out of an investment where either the State party to the dispute or the home State of the foreign national is not an ICSID Member State.
  • Conciliation and arbitration proceedings between parties at least one of which is a Member State or a national of a Contracting State for disputes that do not arise directly out of an investment.
  • Fact-finding proceedings.  
ICSID Additional Facility proceedings are similar to ICSID Convention proceedings, but these cases do not benefit from special features of the Convention, such as the recognition and enforcement of the award. Therefore, the Arbitration Rules applicable to Additional Facility cases provide that the place of arbitration must be in a State which is a party to the 1958 UN Convention on the Recognition and Enforcement of Foreign Arbitral Awards (Article 19 of the Arbitration (Additional Facility) Rules).

The Secretary-General of ICSID approves access to the Additional Facility and registers a request for arbitration or conciliation to commence cases (Article 4 of the Additional Facility Rules).

For a basic outline of the process in Additional Facility proceedings, see: 
UNCITRAL Cases and Other Dispute Settlement Activities of the Centre

The Centre also administers cases conducted under other rules and treaties, in particular the Arbitration Rules of the United Nations Commission on International Trade Law (UNCITRAL Rules).

The services rendered by the Centre in such proceedings may range from limited assistance with the organization of hearings and fund-holding to full secretariat services in the administration of the case concerned.

The Centre’s services are available for other ad hoc investor-State and State-State cases, as well as for mediation of investment disputes and other alternative dispute resolution mechanisms.

Information on how to arrange for ICSID to administer a non-ICSID case may be found on this website.