Research On The Appellate Mechanism In ICSID Arbitration

In order to promote the transnational flow of capital and improve the investment environment,in 1965,under the auspices of the World Bank,the developed countries and the developing countries signed Convention on the Settlement of Investment Disputes between States and Nationals of other States.A specialized agency called International Centre for Settlement of Investment Disputes(hereinafter referred to as ICSID)was also established to solve the disputes between the private investors and the host countries.However,with the increasing number of cases about investment disputes in recent years,lots of defects and shortcomings are revealed in practice.For Example,some awards of arbitration are inconsistent,the arbitrators may take sides in private investors excessively and ignore the public interests of host countries.Besides,due to the insufficient of ICSID supervision mechanism,it is impossible to review substantive issues which damages the impartiality of awards.In order to make up for the deficiency,the establishment of ICSID appellate mechanism is widely supported by some countries and experts.The establishment of an arbitration appellate mechanism is not whimsical.Some countries and regions such as the Netherlands,the UK,Macao China have already introduced arbitration appellate mechanism in their domestic laws.Some commercial arbitration institutions,such as the International Arbitration Chamber of Paris,The International Institute for Conflict Prevention&Resolution and Judicial Arbitrationand Mediation Services.inc,have already established appellate mechanism to ensure the justice of awards.These successful practice all can be used as reference for the establishment of ICSID appellate mechanism.The establishment of an appellate mechanism in international arbitration of investment was firstly formally put forward by representatives from France during the Multilateral Agreement on Investment negotiations.Hereafter,Under some bilateral investment treaties and regional free trade agreements,establishment of appellate mechanism has been advocated and put into practice by America.In addition,in 2004,ICSID Secretariat released a discussion draft,namely Possible Improvements of the Framework of ICSID Arbitration,which emphasized setting up an appellate mechanism.This paper includes introduction,body and conclusion,and the body is divided into four parts.The first part mainly reviews the emergence,development and shortcomings of ICSID.Based on the analysis of the revealed shortcomings,this part also discusses the positive effects of the establishment of an appellate in ICSID.As a permanent institution,ICSID was created in 1960 s with the purpose of solving the increasing investment disputes between private investors and host countries.The establishment of ICSID avoided the settlement of investment disputes politicized,which not only eased the investors' concern about host countries' legislative system,judicial decisions and government law enforcement,but also prevented investors' home countries expanding jurisdiction or interfering in the affairs of host countries.However,by the end of the last century,more and more shortcomings of ICSID are revealed in practice.Due to the fragmentation of international investment law,the inconsistent in the interpretation of the same investment provisions,non-compliance with precedents in ICSID arbitration as well as the difference in competence and experience between arbitrators,contradictory decisions are always made by arbitration tribunal.In addition,ICSID is short of protecting the public interests of host country.Arbitrators also prefer to protect investors' economic interests and the deregulation of host countries also exacerbate the ignoring of public interests.Finally,the remedy system of ICSID,especially the annulment system,can not satisfy the needs of both parties of disputes.So,the international community,including ICSID set about exploring feasible reforms actively in order to cover the shortage of ICSID.Depends on its feasibility,the establishment of ICSID appellate mechanism stands out from numerous solutions.The second part is mainly about research on the appellate body in domestic and international commercial arbitration mechanism.This part also presents specific legal provisions,such as the raise of appellate apply,the composition of the appellate tribunal,the effectiveness of appellate adjudication and so on.The purpose of this part is providing reference for the specific construction of ICSID appellate mechanism.The third part is about the feasibility of the ICSID appellate mechanism.On one hand,this part introduces the concepts,emergence and previous development of arbitration appellate mechanism.On the other hand,this part analyses the obstacles and solutions of setting up the ICSID appellate mechanism.Considering its' particularity,“arbitration award shall be final and binding” is not suitable for ICSID.The Washington Convention also does not hinder the construction of appellate mechanism.Besides,both parties of investment disputes prefer impartiality to effectiveness.In view of all reasons mentioned above,the establishment of ICSID mechanism is reasonable and feasible.Finally,the forth part raises suggestions about the framework and basic principles of ICSID appellate mechanism.In 2004,ICSID secretariat released the“ICSID appeal convenience rules”,which can be referred for the settlement of ICSID appellate mechanism.Besides,what countermeasures our country should take are also mentioned in this part.Nowadays,China is the most attractive host country as well as the most favored capital export country in the world.In recent years,Chinese companies and foreign companies in China have begun to realize the importance of ICSID.It is necessary that China should take an active part in the study and negotiation of the establishment of ICSID appellate mechanism,in order to safeguard the interests of our country and Chinese enterprises.