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ADR. Arbitraż i Mediacja

nr 2/2015

Enforcement of an ICSID award pending annulment

Katarzyna Barbara Szczudlik
advocate trainee, Master of laws (University of Wroclaw), LL.M. (MIDS, University of Geneva and Graduate Institute of International and Development Studies), junior associate at Dentons. The views expressed here are those of the author and not necessarily represent or reflect the views of any law firm or organization with which the author cooperates
Abstrakt

Introduction  Enforcement of arbitral awards rendered by investment tribunals has become an important issue recently, mostly due to the ruling made by a tribunal sitting under Permanent Court of Arbitration in a case initiated by a majority shareholder of Yukos against Russian Federation1.  It is a common knowledge that winning is only the first step in investment arbitration. First, Russia has right to file an application for setting aside the arbitral award at the seat of arbitration2. Second, the decision is worthless until its enforcement in a state where the loosing respondent state has assets that are not immune from execution. As it already happened in the past, enforcement could create serious, often insurmountable obstacles for winning parties3.  But those recent events are not the subject of this paper. To the contrary, it aims at delivering a short overview of interplay between possibility of annulment of an arbitral award rendered under auspices of International Centre for Settlement of Investment Disputes (“ICSID”) and a rule of automatic enforcement of ICSID arbitral award.  Art. 52 of the ICSID Convention (“Convention”4) specifies the grounds for annulment of arbitral awards as well as time limits and applicable procedure. A particular feature of investment arbitration under the auspices of the ICSID is that an award is automatically enforceable in any contracting state. Pursuant to Art. 53 (1) of the Convention, an ICSID award is binding on the parties and they must comply with it “except 67to the extent that enforcement shall have been stayed pursuant to the relevant provision of this Convention”. In the light of Art. 54 of the Convention, each contracting state “shall recognize an award (...) as binding and enforce the pecuniary obligations (...) as if it were a final judgement of a court in that state”. A question arises how to reconcile finality of an award and its immediate and automatic enforceability with possibility to seek its annulment under Art. 52 of the Convention. In answer to this question, a special...