ICSID annulment explained

The five grounds

Article 52(1) lets either party request annulment on one or more of five grounds ¹. The list is closed.

• The tribunal was not properly constituted ¹.
• The tribunal manifestly exceeded its powers ¹.
• There was corruption on the part of a member of the tribunal ¹.
• There was a serious departure from a fundamental rule of procedure ¹.
• The award failed to state the reasons on which it is based ¹.

What annulment is not

ICSID's updated Background Paper on Annulment, current to 31 December 2023, quotes the drafting history describing annulment as not a procedure by way of appeal requiring consideration of the merits ². The paper records that a mistake in applying the law is not a valid ground, and that ad hoc committees do not reexamine the facts ². It notes one exception discussed in decisions: failure to apply the law the parties agreed may amount to an excess of powers ².

If a committee annuls, it does not decide the dispute itself ². Either party may then ask for the dispute to go to a new tribunal ¹. ICSID's news release calls annulment an extraordinary recourse ³.

The committee and the timetable

On receipt of an application, the Chairman of the Administrative Council appoints an ad hoc committee of three from the Panel of Arbitrators ¹. No member may have sat on the tribunal, share a nationality with a tribunal member, be a national of either State involved, have been designated to the Panel by either State, or have been a conciliator in the dispute ¹.

The Background Paper gives an average of 9 weeks to complete appointments ². For proceedings concluded between 16 April 2016 and 31 December 2023, the average duration was 26 months from registration, or 24 months from constitution of the committee ².

Stay of enforcement

If the applicant asks for a stay in its application, enforcement is stayed provisionally until the committee rules on the request ¹. The committee may keep the stay if the circumstances require it ¹. The Background Paper states there is no presumption in favour of a stay of enforcement ².

To 31 December 2023, there were 136 stay requests in 194 proceedings. Of these, 119 led to decisions and 64 stays were granted ². Of the granted stays, 35 were conditional, and 15 were terminated for failure to meet the condition ².

Who pays

The applicant alone pays the advances ICSID requests, except where the parties agree otherwise. This is subject to the committee's final decision on costs ². The paper gives an average cost of proceeding of US$400,000 since April 2016, of which 73% was committee members' fees ². ICSID's Schedule of Fees (2023), effective 1 July 2023, sets a lodging fee of US$25,000 for an application for annulment ⁶. The March 2024 Background Paper gives the same figure ².

Outcome figures and how they differ

ICSID's March 2024 release says annulment proceedings had been instituted in 189 of 885 Convention cases by 31 December 2023, or 194 counting second proceedings in five cases ³. Respondents filed 57% of applications and claimants 38% ³. The release states the rate of annulment as 2.6 percent of all registered arbitrations and 5 percent of all Convention awards rendered ³.

The two latest caseload issues print these totals in their text. Issue 2026-1 counts cases to 31 December 2025 and Issue 2026-2 counts cases to 30 June 2026. The count of full annulments falls from 9 to 8 between the two issues, and neither issue explains the change ^4,5.