发布时间： Tue Jul 30 19:03:13 CST 2024
编者按：“北仲杯”高校仲裁有奖征文大赛旨在鼓励高校法学专业学生熟悉仲裁，为更多青年才俊将来成为仲裁事业推动者奠定基础。大赛自2013年首次举办以来，吸引了众多学子参与，在仲裁界具有广泛的影响力。为了满足读者需要，进一步丰富和繁荣商事仲裁理论研究成果，《北京仲裁》第125辑（2023年第3辑）作为第十一届“北仲杯”的获奖论文专刊，在征得获奖作者同意后，将其中7篇获奖论文予以刊载。
本文系第十一届“北仲杯”二等奖作品《The Stay of Enforcement of Treaty-based ICSID Award in the Annulment Proceeding — An Empirical Study》，作者为荷兰伊拉斯姆斯大学王亚超。
Abstract
This article selects 72 decisions to stay of enforcement made in the annulment proceeding of treaty-based ICSID awards that are available to the public. The analysis of these decisions is based on the committee’s comprehension of the stay of enforcement and considerations on influential and relevant circumstances to the stay. In addition， this article endeavours to summarise the historical evolution of the stay of enforcement based on the timeline analysis， and concluded empirically that the legal framework of the stay has changed and is now being evaluated in practice. Meanwhile， new grounds for requesting a stay of enforcement keep rising， which presents practical difficulties. Furthermore， this article glances at the domestic practice and finds the subtle difference between the ICSID committee and the domestic court regarding the circumstance that drives the stay.
Key Words
stay，ICSID award，non-payment，circumstance
1. Background
Long after its establishment， the ICSID arbitration was not so popular in solving investment disputes. The number of ICSID cases did not skyrocket until the end of the 20th century. To date， 673 cases have been administered under the ICSID arbitration rules， which is comparable to the number of non-ICSID arbitration cases administered under the UNCITRAL rules， ICC rules， etc. While ICSID arbitration cases have grown， challenges to arbitral awards have grown as well. In 153 out of 647 cases， the annulment of the award was applied， accompanied by an application for a stay of enforcement， as under the ICSID framework， even if the award is pending in the annulment proceeding， it still has enforceability unless the stay of enforcement is granted.
As a procedural setting， the stay of enforcement is provided in Articles 50， 51， 52， and 53 of the ICSID Convention and serves as a link between the remedy and the enforcement proceeding. While Article 53 clarifies the stay’s suspensive effect on award compliance， Articles 50， 51， and 52 correspond to the stay’s application in the interpretation， revision， and annulment proceedings， respectively.
In the past， due to a low caseload and the common voluntary compliance with awards by states， decisions on the stay of enforcement of ICSID awards were seldom taken by the ad hoc committee （hereinafter ‘committee’ or ‘ad hoc committee’） which was in charge of annulment proceedings. However， in recent years， as more awards were subjected to challenge in annulment proceedings， decisions on the stay of enforcement have gradually increased.
States such as Argentina， Venezuela， and Spain， which have regularly been hit with investment claims have frequently attempted to stay enforcement proceedings while initiating the annulment against unfavourable awards. In addition， a few investors， who were dissatisfied with the quantum of monetary compensation， have made similar efforts as well. Resultingly， the legal battle between the parties gradually became intense in the regime of the stay of enforcement.
Based on the aforementioned understanding and observations， this article then picks 72 publicly available decisions about the stay of enforcement made in the annulment proceedings of treaty-based ICSID awards. The analysis of these decisions is made from the perspective of the development of applicable rules to the stay and the circumstance influencing the committee’s decisions on the stay. In addition， based on the timeline analysis， this article also attempts to summarize the historical changes in the committees’ decisions on the stay. With the empirical study， this article also moves forwards to the domestic legal proceeding to compare the international stay and domestic stay.
2. Introduction to the stay of enforcement in the annulment proceeding
In general， the stay granted in annulment proceedings could be divided into two types：the provisional stay and the stay granted by the ad hoc committee.
The provisional stay is granted by the Secretary General of the ICSID Centre. According to the second sentence of Article 52（5） of the ICSID Convention， once the applicant has requested a stay of enforcement in the application for annulment， the provisional stay is triggered. The length of the stay mainly consists of the time for the constitution of the committee and the time for its decision.
Stay granted by the ad hoc committee may have double meanings. The first is the continuation of the provisional stay， ie. the committee hears the request within 30 days and allows the provisional stay to be continued. The second meaning refers to the situation in which the applicant did not request a stay of enforcement in the application for the annulment， but so requested during the annulment proceeding. However， so far this situation has not yet been found in publicly available sources.
Based on the foregoing classification， this article concentrates on the continuation of the provisional stay. Consequently， the simplified relationship between provisional stay and committee-granted stay is depicted in the graph below.
3. Legal framework and its changes
The legal framework for the stay of enforcement is provided for in Article 52（5） of the ICSID Convention， and Article 54 （stay of enforcement） of the ICSID Arbitration Rules. The former provides provisions on provisional stay and gives the committee the discretion to decide whether to continue to stay if ‘circumstances require’， whereas the latter provides detailed procedural guidance.
However， the definition of ‘circumstances’ and the approach the committee should take to consider these circumstances are absent from the above two provisions. Therefore， the room for the committee to exercise its discretion to consider and deal with the circumstance is open.
Even though the arbitration rules were revised in 1984， 2003， and 2006， the legal framework has remained unchanged for many years since its enactment. But in 2022， the framework has changed due to a few changes in the arbitration rules. In the brand-new 2022 ICSID Arbitration Rules， the stay of enforcement has been moved from Article 54 to Article 73. Some new approaches have been incorporated in Article 73， such as conditional stay and the cumulative analysis of all relevant circumstances.Article 73 also proactively takes into account the reporting or notification of changing circumstances， which facilitates the timely adjustment of its decisions by the ad hoc committee. But as the new arbitration rules just came into effect in July 2022， there is no public information showing that they have been invoked in practice yet.
On the other hand， the legal framework has been altered not only by the amended arbitration rules， but also by international investment agreements （‘IIAs’） which include both bilateral investment treaties and treaties with investment provisions. Currently， the majority of IIAs are in harmony with the ICSID Convention’s design. While a few IIAs have chosen to prohibit the seeking of enforcement while an ICSID award is under revision or annulment. The first IIA with such a provision is the investment chapter in NAFTA. In this Chapter， Article 1136 provides that：
‘A disputing party may not seek enforcement of a final award until：
（a） in the case of a final award made under the ICSID Convention
（i） 120 days have elapsed from the date the award was rendered and no disputing party has requested revision or annulment of the award， or
（ii）revision or annulment proceedings have been completed；’
Although this provision does not mention the stay of enforcement， it denies the enforceability of the award in the annulment procedure with a ‘waiting period’， meaning that the ad hoc committee could not lift the stay because it would be in violation of the treaty. In TECO v. Guatemala， the investment treaty adopted a similar provision， and the committee held that the ‘non-enforceability of an award while an annulment proceeding is pending’ had been foreseen by the above provision. Regardless of TECO’s argument that the committee has the discretion pursuant to the ICSID Convention and ICSID Arbitration Rules， the committee granted the stay with reference to the investment treaty.
To date， 98 IIAs have adopted similar provisions （see Annex 1）. These investment agreements represent a relatively modest proportion of the over 3，200 international investment agreements. But it’s also important to note that the provision is also adopted by Canada， Mexico， China， the United States， India， Slovakia， etc. in their Model BIT which shows that this approach has been accepted by some influential powers and has affected their treaty practice.
4. Analysis of the stay and non-stay granted
In order to gain a comprehensive understanding， this article investigated 153 cases in which the annulment had been applied. It was found that in 72 cases， the committee rendered its decisions on the stay of enforcement （see Annexe 2）.
Generally speaking， there was indeed a so-called ‘almost automatic’ period in the matter of stay of enforcement. The data shows that it was not until 2012 that the committee directly rejected the stay of enforcement in Nations Energy v. Panama.
Since its appearance in 2012， the cases related to non-stay reached a peak in 2017 and 2018， surpassing the cases where the stay was granted. Currently， the stay has been granted by the committee in 48 cases， while requests for the continuation of the stay have been rejected in 24 cases.
In contrast， committees often attached conditions when they grant the continuation of the stay. In 26 out of 48 cases， the conditional stay was employed. However， it’s only in 3 out of 24 cases， the committee denied the award debtor’s request for the stay with the condition that the award creditor provides a guarantee of restitution in case the award is annulled， which could be named ‘conditional non-stay’.
In recent years， the conditional stay has appeared frequently. Nevertheless， it should be noted that the probability of conditional stay being satisfied is not high. There were about 13 out of 26 conditional stay cases in which the committee required the award debtor （usually the state） to make financial efforts such as providing security， bond， bank guarantees or the escrow account， but the award debtor failed to do so. Resultingly， the committee lifted the stay.
5. The driving circumstances for the stay of enforcement
It’s commonly accepted by committees that the stay of enforcement is circumstance-driven. But as mentioned above， neither the ICSID Convention nor the ICSID Arbitration Rules define the term ‘circumstance’， nor guide how the committee interprets the term. Therefore， the committee has to use discretionary power to confirm whether the circumstance argued by the parties justifies a stay or not. In practice， circumstances considered by the committee can be roughly divided into four categories.
The first category of the circumstance relates to the annulment proceeding. Including whether there is a basis for the application of the annulment， and the advance payment of legal fees as the procedure needs financial support to run.
For the former， the committee mainly depends on whether there is an indication to prove whether the applicant’s application is dilatory. In this matter， the strict standard —— the annulment application is ‘without any basis’ has been used by committees. However， it is almost impossible in the ICSID arbitration regime to determine that the application for annulment has no basis without conducting a substantive review on the merits. In reality， although the dilatory motive was frequently reviewed by the committee， it was not adopted in the decision.
For the latter， the ICSID Administrative and Financial Regulation 14（3）（e） states that an applicant in an annulment proceeding is the only one responsible for making the advance payments until the ad hoc Committee decides how the costs will be split.In the vast majority of cases， parties had prepaid legal fees. However， in Nations Energy v. Panama；Vestey v. Venezuela；SGS v. Paraguay；Koch Minerals v. Venezuela， the advance payment was absent or delayed which was taken into consideration by the committee and they refused to grant a stay.
The second category relates to payment of the award. It includes not only the analysis of the prospect of the award debtor’s compliance but also the analysis of the recovery of the money paid or executed pursuant to the award in the event that the award is annulled or partially annulled. Depending on whether the award debtor is a state or an investor， the committee has taken diverse approaches to the question of whether the award debtor will offer compliance.
When the debtor is a state， the committee focuses more on its domestic legal system. As the committee in Occidental v. Ecuador （II） held that ‘The risk of non-compliance must be measured in the jurisdiction of the debtor State itself， applying the law of the land’. Such an approach has been challenged by the investor in various cases against Argentina based on one ground that the governmental officials had shown their resistance to the awarded damage publicly. But the challenges failed since the committee held that there should be a clear division between the legal framework and political expression.
However， the legal framework itself may bring challenges as well. Such a problem is exposed by intra-EU cases. For instance， in Eiser v. Spain， Spain argued that as an EU member state， its compliance with the intra-EU award is under the legal framework of EU law， and it needs to get ‘clearance’ from the European Commission to pay the award. Thus， there is a potential risk of refraining the payment from the ‘law of the land’. The Committee concluded that these would be contrary to the binding nature of the ICSID award and didn’t accept Spain’s argument. Other Committees took a similar view that the conflict between EU Law and ICSID Convention does not constitute a circumstance for the stay. But it seems the challenge continues to attend the following domestic recognition and enforcement proceeding even if it is only agreed upon by some EU member states.
The other circumstance is the state’s compliance or payment record. Regarding this issue， the committee adopted a cautious attitude. Although investors referenced prior noncompliance by states such as Argentina， Venezuela， and Spain， the committee rejected the investor’s argument that the state intended to do so in the case under consideration. In RREEF v. Spain， the committee held that it was premature to conclude the state’s non-compliance. But in Hydro Energy 1 and Hydroxana v. Spain， the committee also held that investors had to wait in a long line to get the payment if the award was not annulled.
In the scenario that the investor is the award debtor， the committee focuses more on the investor’s financial situation. For instance， in Pey Casado and Allende Foundation v. Chile， Kılıç v. Turkmenistan， and Albaniabeg Ambient v. Albania， the committee analyzed the financial burden and bankruptcy risk of investors. But this circumstance is given less attention when the state is the debtor. The committee also considers the expertise of the investor in capital allocation which may influence the possibility of restitution of the award that was paid or enforced in the annulment proceeding if the stay is lifted but the award is finally annulled.
As mentioned above， the conditional stay was frequently adopted by the committee. Its main benefit is to increase the likelihood that an award will be complied with. But it is not an independent decisive factor. The application of conditional stay is based on or interacted with the analysis of other circumstances. Since compliance with the ICSID award is pecuniary in nature， the conditions provided are also clearly pecuniary-oriented. The award debtor may be asked to provide the reputational guarantee， such as a letter of commitment， or the monetary guarantee， such as a bond or escrow account. Based on this， it is referred to as payment-related in this article.
The third category is the balance of the interests of both parties. It is closely combined with the circumstances in the second category and is generally recognized by the committee. Whether the committee terminates or extends the stay， both parties will be impacted differently， which necessitates a balance of interest.
For instance， if the committee requires a debtor-state to provide a bank guarantee or a third-party escrow account in order to continue the stay， the award-creditor is in a better position because it can collect money without much effort if the award is not annulled， while the debtor-state may bear the financial burden to satisfy the stay. If view this situation in more depth， the debtor-state may lose its defence of state immunity from execution as the security offered is supposed to be enforceable， which may be considered as a reason why many debtor-states refused to meet the required conditions.
Regarding the financial burden， committees also confirmed that if the immediate enforcement would not cause catastrophic consequences to the debtor state， the stay may not be granted on this ground. However， it is not clear whether this standard can be applied to a situation where the investor is the debtor.
The fourth category is the setting of the waiting period for the enforcement of IIAs. In this clear circumstance， the stay of the enforcement has actually been reached by the investment treaty. Although the committee has discretion， this realistic situation makes the committee continue the stay.
6. The decision’s influence on the domestic proceeding
After presenting the result of the empirical study. This article moves forward to the influence of the stay or non-stay on the domestic proceeding. It is determined by the Convention that once there is a stay， the enforcement proceeding shall be suspended among its signatories. But whether the recognition proceeding needs to be stayed is remain unclear， as the recognition is absent from Article 53. The drafter held that the recognition is also influenced by the decision， based on the consideration that the recognition is necessary for the enforcement proceeding. In practice， the stay’s influence on the recognition proceeding has been accepted in Eiser Infrastructure Limited v Kingdom of Spain in Australia.
The non-stay’s influence is intriguing. According to Article 53， the only exception to the state’s compliance with the award is the granted stay. Therefore， if there is a non-stay， the recognition and enforcement proceeding is allowed to be conducted before the domestic court. But the Convention doesn’t clarify the domestic court’s authority regarding the recognition and enforcement proceeding. Resultingly， whether the domestic court could stay the enforcement proceeding of the ICSID award caused some arguments. For instance， in Tethyan Copper v. Pakistan， Tethyan， as the award creditor， argued that ‘only ICSID can impose a stay on enforcement of its own awards’. Such argument was denied since ‘Generally， courts have an inherent power to stay proceedings before them’. It may be also understood that the governing law regarding the enforcement of the award is the law governing the enforcement of a final judgment. If the enforcement proceeding of a final judgment could be stayed before a domestic court， so does the enforcement proceeding of an ICSID award.
In this regard， the circumstances considered by domestic courts may be a little different from those considered by ICSID committees. It’s shown in 9REN Holding v. Spain that the judicial economy was emphasized by the American court while it was seldom considered by the ICSID committee. In Unión Fenosa v. Egypt， the ‘immense uncertainty’ and hardship brought by the COVID-19 pandemic was contemplated and agreed upon by the court， but in Tethyan Copper v. Pakistan， the ICSID committee lifted the provisional stay on the ground that Pakistan failed to prove the likelihood it would ‘suffer the severe hardship on an immediate basis’ even they accepted the uncertain situation that COVID-19 would cause.
The short piece above indicates that even if there is a non-stay granted by the ICSID committee， the domestic court may still stay the proceeding under its discretion. Compared to the ICSID committee， the domestic court may employ different legal standards which may complicate the legal practice as parties have to establish grounds other than they already prepared before the ICSID committee.
7. Conclusion
After analyzing the applicable laws and decisions in the stay of the enforcement regime. This article discovered that， with the amendment of arbitration rules and new rules of IIAs， the legal framework for the stay of enforcement has begun to change. Specifically， IIAs stipulate a waiting period for enforcement， which significantly restricts the discretionary authority of the committee.
On the other hand， the stay was widely granted in a certain period. The conditional stay has been frequently employed， however， because the conditions were not met， nearly half of the stays were eventually lifted. In recent years the number of non-stay decisions has also increased.
The circumstances affecting the decision of the committee are basically similar. But the treaty conflict exposed in Intra-EU cases in recent years has brought some troubles. The setting of the waiting period by IIAs has been tested as a new circumstance that the committee took into consideration.
Regarding whether COVID-19 constitutes a new circumstance that brings economic hardship， due to the difficulty in finding public cases in recent years， this article cannot give an effective and comprehensive answer， but can only state that its uncertainty has been accepted by the committee.
Finally， this article still needs to make clear that the stay of enforcement of the ICSID award is a complicated matter. At the international level， it is subject to the discretion of the committee， and at the domestic level， it is decided by the domestic court under the domestic legal system. The subtle differences between the two legal systems complicate the legal practice and bring challenges to both parties.
