Report_State-2

Arbitration Involving States and State Entities under the ICC Rules of Arbitration – Report of the ICC Commission on Arbitration and ADR

A report of the ICC Commission on Arbitration and ADR, Task Force on Arbitration Involving States or State Entities. Its purpose is to explain how ICC arbitration works in relation to disputes involving states and state entities.

This report has been produced under the auspices of the ICC Commission on Arbitration and ADR. Its purpose is to explain how ICC arbitration works in relation to disputes involving states and state entities.

It will be of interest to states, state entities and their legal advisers, but also to other organizations and entities that have relations with states and seek information on the options available to them when resolving disputes involving states or state entities.

The report is the work of the Commission Task Force on Arbitration Involving States and State Entities. The Task Force was created in recognition of the fact that ICC arbitration, although a powerful dispute resolution tool, was underused in disputes involving states and state entities and that some explanation was required on the advantages it offers and on how the ICC Rules of Arbitration (the “ICC Rules”) operate in this context. That explanation is better given in a report than by way of a separate set of rules for state and state entity arbitration.

The recent revision of the ICC Rules has made a separate set of rules applicable to cases involving states or state entities unnecessary. The 2012 ICC Rules contain new provisions that reflect the work of the Task Force and are intended to facilitate and further the participation of state parties in ICC arbitration.

Users of international arbitration may be unaware of the recommendations, rules and practices that have been developed in the ICC arbitration system to take into account the participation of a state or state entity. This report seeks to raise awareness of those recommendations, rules and practices within the international arbitration community.

The aforementioned recommendations, rules and practices relate to two aspects of ICC arbitration involving states and state entities: the arbitration agreement and procedure. This report is intended to provide guidance on these matters.

The report begins with some background facts on ICC arbitrations involving states and state entities. It then offers recommendations on drafting arbitration agreements. Lastly, it looks at matters of procedure that specifically address arbitrations involving states and state entities.

 

Contents:

Introduction
Background

The arbitration agreement

Commercial arbitration
Investment arbitration

Procedure

Provisions added to the ICC Rules in 2012 to take into account the particularities of ICC arbitration involving states and state entities

Articles 1(1) and 1(2): disputes referable to ICC arbitration

Articles 6(3)−6(5): prima facie analysis of the arbitration agreement

Article 13(4): appointment of sole arbitrators, presidents of arbitral tribunals, and co-arbitrators failing a nomination

Articles 11 and 14: addition of “impartiality”

Article 21(2): non-application of contracts and trade usages

Article 29(5): non-application of the Emergency Arbitrator Provisions

Bifurcation of proceedings

Practices of the Court in ICC arbitrations involving states and state entities

Role of the Court and ICC National Committees

Application of Articles 6(3) and 6(4) to situations in which one of the parties seeks the extension of the arbitration agreement to a non-signatory state or state entity

Constitution of the arbitral tribunal (Articles 11−15)

Fixing of the place of the arbitration (Article 18)

Scrutiny of draft awards (Article 33)