Study On Limits And Reform Of Annulment Of Awards System Under ICSID Convention

The International Center for Settlement of Investment Disputes(ICSID)Arbitration Mechanism is currently the most important mechanism for solving the investment disputes between investors and host states.On the one hand,the ICSID Arbitration Mechanism has been welcomed by investors and host governments due to its professionalism and independence.It has played an irreplaceable role in protecting and promoting international investment.On the other hand,with the rapid increase in ICSID cases number in recent years,the ICSID Arbitration Mechanism has exposed legitimate crisis such as ignoring the interests of the host states and lack of consistency in awards,which has been increasingly questioned by investors and the host states.However,as the last method to maintaining the consistency and impartiality of the award,the ICSID Annulment System not only fails to solve the problems in the original arbitration award,but also causes a new round of inconsistency and impartiality of the award.Therefore,it arouses the international community's concern.According to ICSID Convention,awards annulment can only be based on the provisions of Article 52,including “the Tribunal was not properly constituted”,“the Tribunal has manifestly exceeded its powers”,“there was corruption on the part of a member of the Tribunal”,“there has been a serious departure from a fundamental rule of procedure” and “the award has failed to state the reasons on which it is based”.Because the grounds for annulment in ICSID Convention are too general and succinct,temporary ad hoc committees often take different standards based on different understandings for them.Some ad hoc committees may even break through the boundaries of procedural to touch on the substantive issues of the award.In particular,regarding the determination of “the Tribunal has manifestly exceeded its powers” and“the award has failed to state the reasons on which it is based”,ad hoc committees possess great room for discretion.Therefore,the ICSID Annulment System cannot guarantee the consistency of the award.The five grounds for annulment stipulated in the ICSID Convention are all procedural grounds.Therefore,we cannot take the advantage of the ICSID AnnulmentSystem to review the substantive issues of the award.However,the disputes involved in ICSID Convention awards are often related to the public interests and public policies of the host states,which have deep influence and wide-ranging touches.If the ICSID Annulment System blindly pursues the efficiency value and to exclude the review of the substantive issues of the award,it will be difficult to notice the motivation behind the behavior of the host states and cannot guarantee the substantive justice of the award.Moreover,the ICSID Annulment System cannot truly guarantee the efficiency value of the award.According to article 52(2),applicant only need to meet the formal requirements and statute of limitations to apply for annulment of the award.According to article 52(6),annulled award can be submitted to a new Tribunal at the request of either party.These regulations may lead to the parties to abuse the ICSID Annulment System or trigger circular arbitration.In response to the limits of the ICSID Annulment System,international community has proposed a variety of reform plans.The plan of establishing an Appeal Mechanism outside the ICSID proposed by EU and US can better guarantee the consistency and substantive justice of the award,but it still has many problems such as lacking of compatibility with the ICSID Convention Arbitration System and supporting procedural rules.Although the self-revision of the ICSID Annulment System can also effectively solve the problems of lacking consistency and substantive justice of the award,it is almost impossible to modify the ICSID Convention.Compared with the above two reform plans,establishing ICSID Appeals Facility System proposed by ICSID Secretariat seems to be the most realistic possibility.It not only can continue to use the advantages of the ICSID Convention Arbitration System,but also can serve all countries in a unified manner,effectively guarantee the consistency,justice and efficiency of the award.The ICSID Appeals Facility System adapts to China's actual conditions.It can provide a better ISDS mechanism for advancing the “Belt and Road” and deepening “Opening-up”.Therefore,our country should actively promote the implementation of the ICSID Appeals Facility System and pragmatically participate in the construction of the ICSID Appeals Facility System.