Chapter III of the ICSID convention, regulations and rules covers conciliation (World Bank Group, 2006). Section 1 to 3 of this chapter specifies the process of conciliation from the request, formation of the conciliation commission and the eventual conciliatory proceedings. Section 6 deals with the recognition and enforcement of an award.
According to this chapter, MTP Petroleum shall lodge an official request in writing to the Secretary General of ICSID. The Secretary General shall copy the same letter to the other party to inform them of the impending process (Reed, Paulsson, Blackaby, 2010). The request shall include the issues under dispute, in this case, the absence of foreign investor protection and the weak judiciary, shall feature in the MTP Petroleum request. The request shall identify the parties to the dispute and include a consent for the company to be involved in the conciliatory and arbitration process.
The Secretary General shall proceed to register the request according to the specifications of the request. The Secretary General shall be permitted to refuse the registration of the request should it manifest that the issue falls outside the jurisdiction of ICSID (Nathan, 2000). The conciliatory commission simply referred to as the commission hereafter, shall be composed of one conciliator or any odd number of conciliators appointed by the parties being conciliated. Should there be any disagreement on the exact number of conciliators, the commission shall be composed on one conciliator appointed by each party and a neutral conciliator agreed upon by all parties, who will preside over the commission. Should 90 days after the registration of the request elapse before the commission has fully constituted, the Secretary General appoint conciliators through wide consultation with the parties.
The commission shall be responsible for judging its competence. Should any party to the dispute claim that one or more of the issues in dispute are outside the jurisdiction of the commission, it shall have the responsibility of determining how to deal with the issue (Schreuer, Malintoppi, and Sinclair, 2009). The commission can choose to deal with it as a preliminary issue, or as part of the disputes. The commission shall be run according to the conciliatory rules in effect at the time of conciliation and according to section 3 which sets out the conciliatory proceedings. The parties in the process can also agree on some new rules which the commission shall follow. Should there be any questions that are not accounted for in the rules, the section or already agreed by the parties, the commission shall be free to decide how to tackle the question.
If the parties are successfully conciliated, the commission shall prepare a report that reflects all the disputed issues and identifies the decisions made to end the impasse (United Nations (UNCTAD), 2010). Should it appear, at any stage of the proceeding, that there will be no conclusive end to the process, the commission shall bring the proceedings to an end and prepare a report. The report shall note the issues under dispute and indicate the failure of the involved parties to agree. In the event that one party fails to appear before the commission or fails to participate in the process, the commission shall end the proceedings and draw up a report that in notes the lack of participation of the one of the parties.
Arbitration under the ICSID rules cover the duration from the time the notice of registration for arbitration is dispatched until the time when the award is rendered and exhaustion of all challenges.
Procedure for bringing an arbitration claim under ICSID Convention
The issue of a notification requesting for arbitration mandates all parties to constitute a Tribunal under the rules of Chapter IV (section 2) of the ICSID convention. The tribunal is responsible for making orders to guide the entire process. The tribunal is also responsible for applying any agreements between the parties.
The first procedure begins with the Pre-hearing Conference between the arbitration parties and the Tribunal. Issues in dispute are discussed under the Tribunal in order to reach an amicable settlement. The second step involves the selection of the appropriate languages to be used in the Tribunal if the official language is not selected. The third step involves filing of complaints in writing and supporting documentation provided they relate to the case under dispute. Correction of errors in the presented documentation and setting of time limits for the completion of various stages of the proceeding. Waiving the right to object is also considered at the completion this stage.
The cost of proceeding to be paid for expenses of the Tribunal are also decided at this stage. The tribunal will close after all parties have submitted a statement of costs incurred.
In many instances, the written procedure is followed by an oral procedure unless the parties agree. After all due processes have been followed in the written and oral procedures, marshalling of evidence is presented and the Tribunal shall judge the admissibility of evidence following the general principles. The next process is the examination of Witnesses and Experts by parties selected by the President. The decision to conduct any visits and inquiries shall also follow. This section will be closed with the presentation of the case by all parties. Provisional measures, ancillary claims, and preliminary objections will be conducted before settlement and discontinuance. Finally, the award is prepared by the Tribunal
Nathan, K. V. 2000. The ICSID Convention: The Law of the International Center for
Settlement of Investment disputes. Juris Publishing Inc.
Reed, L., Paulsson, J., Blackaby, N. 2010. Guide to ICSID Arbitration, 2nd
Edition. The Hague, Netherlands: Kluwer Law International.
Schreuer, C. H., Malintoppi, Reinisch, A., and Sinclair. 2009. The ICSID Convention: A
United Nations (UNCTAD), 2010. Denunciation of the ICSID Convention and Bits: on
investor-state claims. Issue Note 2. United Nations. Available from
World Bank Group, 2006. ICSD Convention, Regulations, and Rules. Online. Available