Abstract ICSID has advised all 153 of its Members that it is beginning the process to further update the ICSID rules and regulations. One such amendment to be considered is whether the ICSID Arbitration Rules should include an express provision concerning a security for a stay of enforcement of awards. A background paper to the preparation process for these amendments explained this specific proposal as the following: ‘Similar to security for costs, parties might be assisted by an express rule addressing when an ad hoc committee could order security on a stay of enforcement of awards.’2 By reviewing the ICSID jurisprudence concerning the stays of enforcement pending annulment, including specific jurisprudence focusing on orders of security, this article will endeavour to determine whether parties would be assisted by an express rule and, if so, what that express rule should be. This article will start with a short introduction to continued stays of enforcement (Section I), followed by a review of the trends in ICSID jurisprudence on stays of enforcement (Section II). For the sake of comparison, this article will also briefly discuss trends for stays of enforcement in the non-ICSID context (Section III). This article will then review the approaches of ad hoc committees exercising their discretion to issue a stay of enforcement subject to a condition or provision of security (Section IV). Finally, the article will analyse the ‘assistance’ that an express rule for ordering a security on a stay of enforcement could provide (Section V). I. INTRODUCTION—THE LONG ROAD TO SECURITY It is a fundamental principle of the ICSID system that an award rendered by an ICSID tribunal is final and binding. This principle is enshrined in Article 53(1) of the ICSID Convention.3 With this principle in mind, drafters of the ICSID Convention affirmatively excluded the opportunity for any type of appeal of an award. However, the drafters did leave open the possibility to annul an ICSID award, but only on very limited grounds.4 The limited grounds on which to annul an award have thus led scholars to interpret the annulment mechanism as an ‘extraordinary and narrowly circumscribed remedy’5 or ‘an exceptional remedy to deal with extraordinary emergency situations’.6 As a consequence of the binding nature of awards, and annulment being a narrowly circumscribed remedy, awards are enforceable notwithstanding an application for annulment. This proposition finds support not only in the principle on the finality of awards, but also in Article 52(5) of the ICSID Convention and Rule 54(5) of the ICSID Arbitration Rules, providing that a committee may stay enforcement ‘if the circumstances so require’7 and that it is for the applicant to ‘specify the circumstances’.8 If one were to consider—or even more daringly agree with—the mantra of some ICSID tribunals, that each case should serve to ‘contribute to the harmonious development of investment law’ or jurisprudence constante,9 then the jurisprudence concerning stays of enforcement pending annulment would be cause for much concern. Since the 1980s, the initial approach taken by ad hoc committees was to take a robust approach that looked to the specific circumstances that would warrant a stay in that case.10 As time progressed, ad hoc committees found a stay of enforcement was seen as required unless the party opposing annulment could show that there were very exceptional circumstances why it should not be granted.11 This later trend led ad hoc committees to believe that, absent unusual circumstances, a continued stay of enforcement became almost automatic.12 However, as will be discussed below, the idea that a stay of enforcement should be automatic, or in other words that there should be a presumption in favour of granting applications for a stay of enforcement, does not find any basis in the ICSID Convention or in the Arbitration Rules. It seemed to develop as most common law principles develop: the first guy did it, so we should too. However, from around 2009 onwards, the tides changed. Not only were ad hoc committees refusing to recognize a presumption in favour of enforcing a stay, but they expressly denounced the idea that a stay of enforcement was automatic. Though this pattern has been followed by almost every ad hoc committee since 2009, there is still not a universal acceptance and application of Article 52(5) of the ICSID Convention to demonstrate in what circumstances a stay of enforcement should be granted. The confusion as to the appropriate legal standard is not limited to the ICSID sphere either. Challenges against awards in non-ICSID proceedings also experience requests for stays pending the challenge. The problem becomes even more complex considering the enforcement of a non-ICSID award, enforced according to the New York Convention, permits the enforcing court to recognize or enforce an award even if it has been annulled at the place of arbitration.13 Despite finding that there is no presumption in favour of a stay, ICSID case law suggests that the trend is for ad hoc committees still to order stays of enforcement. Cognisant that this may run counter to the immediate enforceability of arbitral awards as per the ICSID Convention, ad hoc committees try to counterbalance any prejudice to the enforcing party as a result of the stay by also ordering the counterparty to provide some sort of security. Considering the fact that there is no express power in the ICSID Convention or the ICSID Rules for an ad hoc committee to order the provision of such a security, ad hoc committees have exercised their inherent power in divergent—sometimes contradictory—ways. This has led to an incoherent array of case law regarding securities on stays of enforcement. II. THE DEVELOPMENT OF ICSID JURISPRUDENCE ON STAYS OF ENFORCEMENT Article 52(5) of the ICSID Convention provides: The Committee may, if it considers that the circumstances so require, stay enforcement of the award pending its decision. If the applicant requests a stay of enforcement of the award in his application, enforcement shall be stayed provisionally until the Committee rules on such request.14 Pursuant to this Article, a party may either in its application for annulment, or at any time during the proceeding, request a stay of enforcement of all or part of the previous arbitral tribunal’s award. The stay may be partial or full, and could concern an award for damages or costs or any other form of relief ordered. If the party seeking annulment includes a request for stay of enforcement in its application for annulment, the Secretary-General of ICSID must inform the parties of the provisional stay.15 Once the ad hoc committee is constituted, the parties will have an opportunity to present written observations on whether the provisional stay should remain until a decision on annulment is rendered.16 A plain language reading of Article 52(5) provides that a stay of enforcement of an award does not expressly provide for a presumption in favour of enforcement pending annulment. The Article provides that only ‘if it considers the circumstances so require’, an ad hoc committee ‘may’ stay enforcement of the award.17 A continuation of the provisional stay of enforcement would therefore lie solely within the discretion of the committee. A review of most ICSID decisions on the stay of enforcement will show that the aspects an ad hoc committee considers when it determines if such exceptional circumstances exist include: 1. Prospects of compliance with the award. 2. Causation of economic hardship. 3. Prospects of recoupment. 4. A dilatory motive.18 The issue then becomes which party has the burden of proof to prove which elements. Even looking to ICSID Rule 54(2), at the request of either party, the ad hoc committee must decide within 30 days of its constitution on whether the stay should be continued, otherwise it will be automatically terminated. This expedited procedure evidences the exceptional nature of annulment proceedings and, further, that a stay of enforcement pending annulment is not automatic.19 Despite this contextual analysis, an overwhelming majority of ICSID jurisprudence has granted requests for a stay of enforcement pending the annulment proceedings. According to the Background Paper on Annulment, published in 2016: ‘There have been a total of 43 requests for the stay of enforcement in the 90 registered annulments, 41 of which have led to Committee decisions. Thirty-six decisions granted the stay of enforcement.’20 This statistic shows that over 75 percent of cases in which a stay of enforcement was sought, it had been granted. At first glance, the trend seems to show that ad hoc committees are circumventing the standard described in the express language in the Convention and Arbitration Rules. A. The Initial Trend The initial trend for ad hoc committees confronted with the question of whether or not to continue a stay was to adopt a more robust approach, based on the relevant circumstances for each case.21 Cases forming this early trend included Amco v Indonesia (I),22Amco v Indonesia (II)23 and Wena Hotels v Egypt.24 These cases reasoned to their conclusions by arguing that the stay of enforcement is an exceptional measure that interferes with the investor’s right to an immediately payable and enforceable award.25 B. The Pre-2010 Trend A more recent trend, but pre-2010, found more ad hoc committees considering that a stay should only be lifted under ‘exceptional circumstances’. However, this line of case law—most importantly based on the Azurix v Argentina and Enron v Argentina decisions—were decided on the (arguably unfounded) premise that it is for the party opposing the continuation of the stay to show that ‘circumstances’ militate against a stay. Even before these two cases, it is worth noting that the ad hoc committee in MTD v Chile already concluded in its 2005 decision that ‘[a]s a general matter a respondent State seeking annulment should be entitled to a stay provided it gives reasonable assurances that the award, if not annulled, will be complied with.’26 The committee reasoned that it should safeguard against the risk that ‘payment made under an award which is eventually annulled may turn out to be irrevocable from an insolvent claimant’.27 This reasoning, and the three subsequent paragraphs of the decision, was copied verbatim by the ad hoc committee in CMS v Argentina without any further analysis of its own.28 Over a year later, the ad hoc committee in Azurix v Argentina actually considered the relevant standard by which a committee should grant or deny a request for a stay of enforcement. The committee concluded that ‘[a]lthough the Committee accepts that there may be very exceptional circumstances where a stay ought not be ordered, that is not the situation here’.29 Thus, the trend for committees had been to find that there is a presumption in favour of continuing the provisional stay of enforcement. This means that a stay of enforcement is required upon applying for annulment, unless the committee finds that there are exceptional circumstances as to why a stay should not be granted. The burden of proof therefore shifted from the applicant of annulment, requesting a stay of enforcement, to the party opposing annulment and the stay of enforcement. The ad hoc committee in Enron v Argentina referred to the ad hoc committee in Azurix and rejected the idea that annulment proceedings should be regarded as per se exceptional ‘so as to create a presumption against a stay of enforcement, or in favour of conditioning any stay on the provision of security’.30 The committee referred to the wording of Article 53 of the ICSID Convention, specifically the phrase ‘except to the extent that enforcement shall have been stayed’, to reason that there is an explicit recognition in the Convention that award creditor’s rights are subject to a stay if an ad hoc committee considers that the circumstances so require.31 The ad hoc committee therefore interpreted the provisions of the ICSID Convention as qualification of the award creditor’s rights to payment of an award. Regardless, the committee still referred to the general trend in ICSID arbitration towards granting applications for a stay of enforcement as an additional basis for its conclusion. The committee found it ‘significant that a stay of enforcement of the award pending annulment proceedings ha[d] been granted in all cases in which it ha[d] been requested’.32 This lead the ad hoc committee to conclude ‘that upon an application for annulment, in general, a requested stay should be granted under Article 52(5) if requested, unless the Committee finds that there are very exceptional circumstances why this should not occur’.33 As the trend continued, the presumption in favour of granting a stay of enforcement almost crystallized into an automatic stay of enforcement. The ad hoc committee in Mitchell v Congo held that although ‘[n]one of the above considerations may in itself justify the stay of enforcement yet, due to their coexistence the Committee is inclined to accept the stay of enforcement, all the more so as this seems to be in conformity with the general practice’.34 The committee rationalized its position by stating that a ‘stay of enforcement pending an appeal from a judicial decision is, according to several national laws, almost automatic’ and that the same ‘stands in the context of applications for setting aside arbitral awards under Article VI of the New York Convention.’35 The ad hoc committee in Victor Pey Casado v Chile has taken the strongest position to date, in May 2010, stating that ‘although Article 52(2) of the Convention uses the verb “may”, thereby conveying an element of discretion to the Committee, a review of the many decisions by ad hoc annulment committees since the MINE v Guinea decision in 1988 leads the Committee to the conclusion that, absent unusual circumstances, the granting of a stay of enforcement pending the outcome of the annulment proceedings has now become almost automatic’.36 As demonstrated by the limited reasoning of the ad hoc committee, the trend became the rule. C. The Post-2009 Trend Yet the year before the Victor Pey Casado decision was rendered a new line of cases started to emerge, dispelling the infinite wisdom that traditionally classified a stay of enforcement as automatic.37 This line of case law includes Sempra v Argentina,38Kardassopoulos and Fuchs v Georgia,39Libananco v Turkey,40SGS v Paraguay,41Victor Pey Casado v Chile,42Occidental v Ecuador,43 and Elsamex v Honduras.44 In fact, these decisions make it explicit that they are deviating from the Azurix and Enron decisions since stays of enforcement are not automatic and, further, there should be no presumption in favour of a stay. The seminal case that caused this shift was the decision in Sempra v Argentina. In that case, the ad hoc committee expressly concluded that stays of enforcement were not automatic and there should not even be a presumption in favour of granting a stay. Against that background, the view of the present Committee as to the prerequisites for granting a stay can be summarized as follows. An ICSID award is immediately payable by the award debtor, irrespective of whether annulment is sought or not. A stay of enforcement should not in any event be automatic, and there should not even be a presumption in favour of granting a stay of enforcement. This follows, in the Committee's opinion, from the ordinary meaning to be given to the terms of Article 52(4)(sic) of the ICSID Convention, which authorizes the Committee to stay enforcement of the award pending its decision ‘if it considers that the circumstances so require’. Although the ICSID Convention does not give any indication as to what circumstances would warrant a stay, it is nonetheless clear from this language that there must be some circumstances present that speak in favour of granting a stay. As a consequence, it cannot be assumed that there should be a presumption in favour of a stay or that the primary burden is placed on the award creditor to show that continuation of the stay should not be granted.45 In Kardasssopoulos v Georgia, the ad hoc committee expressly found that ‘[c]onsonant with the extraordinary nature of the annulment remedy, the stay of the enforcement is an exception to the ICSID enforcement regime’.46 The ad hoc committee bucked the trend by stating that a ‘[s]tay of enforcement during the annulment proceeding is by no way automatic, quite the contrary, a stay is contingent upon the existence of relevant circumstances which must be proven by the Applicant’.47 The ad hoc committee in Libananco v Turkey rejected the earlier trend which presumed a stay of enforcement, referring specifically to the earlier decision on the stay of enforcement in Victor Pey Casado.48 The Committee is aware that some ad hoc annulment committees have considered that, ‘absent unusual circumstances, the granting of a stay of enforcement pending the outcome of the annulment proceedings has now become almost automatic’. However, this does not follow from the ICSID Convention or the Arbitration Rules, and the Committee considers that its decision should be based on an assessment of all relevant circumstances. It was not until 2013, in the ad hoc committee’s decision in SGS v Paraguay, that an ad hoc committee adopted the position that there was a presumption against a stay of enforcement.49 In the decision of SGS v Paraguay, the ad hoc committee first reasoned that the plain language of the ICSID Convention, Articles 52(5) and 53 on the finality of the award, clearly show that a stay of enforcement is not automatic.50 The ad hoc committee noted that the Convention used the imperative verb ‘require’ in the phrase ‘the circumstances so require’, and not other less categorical verbs such as ‘recommend’, ‘deserve’ or ‘justify’.51 The ad hoc committee further explained that the ICSID system ‘is built on the premise that the awards rendered by ICSID tribunals settle in a definite manner the issues submitted to their consideration, and that only under exceptional and highly limited circumstances may their annulment be declared’.52 The committee concluded that ‘[t]he inevitable consequence of the foregoing reasoning is that, despite an application for annulment, awards must be enforced and only in very specific cases where the circumstances so require, may enforcement be stayed by the corresponding committee’.53 The ad hoc committee reinforced that ‘[b]ased on the plain language of Rule 54(4) […] the party interested in the continued stay bears the burden of proof to demonstrate the existence of circumstances that warrant said continuation’.54 In Victor Pey Casado v Chile, the same ad hoc committee that rendered its decision in 2010 for the annulment of part of the award rendered a decision on the stay of enforcement for the remaining part of the award in 2013. The ad hoc committee noted that its previous decision of 2010 did state that the ‘stay of enforcement pending the outcome of the annulment proceedings had become almost automatic’, but that it ‘does not mean that a stay should be granted automatically’.55 The ad hoc committee clarified its prior decision and stated that a committee still needs to be satisfied that ‘the requesting party has discharged its burden of proving that there are specific circumstances justifying a stay’.56 The ad hoc committee thereafter justified its position by referring to Article 53 of the Convention. It found that the choice of remedies offered by the ICSID Convention reflected a deliberate election by the drafters of the Convention to ensure the finality of awards and thereby a presumption that the award must be enforced.57 This conclusion was affirmed by the ad hoc committee in Total v Argentina58 and Abou Lahoud v Congo.59 In a more recent case, Micula et al v Romania, the ad hoc committee actually took a ‘middle of the road’ view that Article 52(5) does not indicate that one particular party bears the burden of establishing circumstances requiring a stay, but that it ultimately is in the discretion of the committee.60 The decision did state that ‘it is for the award debtor to advance grounds (supported as necessary by evidence) for the stay’, but that the award creditor ‘must also advance evidence in support of any “positive allegations” that it makes’.61 The ad hoc committee made it clear that: there is neither a presumption that a stay should be granted (automatic stay) as argued by Romania, nor a presumption that the granting of a stay is an exceptional measure, as argued by the Claimants. Rather the Committee is empowered to exercise its discretion as to whether or not to continue the stay of enforcement pending its decision on the Application.62 The ad hoc committee reasoned that the use of the term ‘so require’, rather than ‘so permit’, indicate the necessity for the ad hoc committee to establish circumstances prone to justify the requested stay of enforcement.63 Moreover, the use of the word ‘may’ indicates that it is a matter solely within the discretion of the ad hoc committee.64 D. Recent Developments (2016–17) In February 2017, the ad hoc committee in Quiborax v Bolivia was presented with an interesting permutation of this issue. In that case, the parties had agreed that the provisional stay of enforcement, originally ordered by the Secretary-General, could remain in effect during the annulment proceedings.65 This agreement was formalized in a procedural order issued by the ad hoc committee. The order also recorded the claimants’ reservation of their right to request a lift of the stay in the future. Bolivia argued that each party should bear the burden of proving the premises on which it bases its application and, therefore, claimants should have to prove that certain circumstances exist that would justify lifting the stay of enforcement.66 The ad hoc committee disagreed with Bolivia’s arguments and found that since the previous continuation of the stay of enforcement was by virtue of party agreement and not by virtue of a finding of the ad hoc committee that circumstances justify a stay of enforcement, the burden of proof still lay with Bolivia.67 The ad hoc committee did find that the circumstances merited a continued stay of enforcement in that case. Just two months after the Quiborax decision, the ad hoc committee in OI European Group v Venezuela rendered a decision on a request for a stay of enforcement. The ad hoc committee cited later jurisprudence on stays of enforcement and found that ‘[t]he aforementioned provisions of the ICSID Convention and the ICSID Arbitration Rules lead this ad hoc Committee to a fundamental conclusion, set forth at the outset, that the continuation of the stay of enforcement in the ICSID system is far from automatic.’68 The ad hoc committee further reasoned that it was important to establish which party held the burden of proof since such a decision affected the procedural administration of a case: The ad hoc Committee proceeded to organize such rounds of submissions because, in its opinion, in order to decide on the continuation of the stay of enforcement of the Award, the ad hoc Committee has to be fully satisfied that the circumstances of the particular case so require. The ad hoc Committee, therefore, based on the preceding statements and the relevant provisions of ICSID regime governing stays of enforcement, finds that it is for the party seeking the continuation of the stay to show that such circumstances exist, and thus, that the stay of enforcement of the Award should be continued. The Applicant bears the burden of proof that there are circumstances in the instant case that, in the discretion of this ad hoc Committee, require the continuation of the stay of enforcement.69 The ad hoc committee in this case decided to reject the request to continue the stay of enforcement. E. Conclusion The two recent cases against Venezuela epitomise the risk posed by not elaborating on the power granted to ad hoc committees under Article 52(5) of the ICSID Convention: two cases against the same host State, facing the same set of circumstances concerning enforcement, that ultimately reach two inconsistent conclusions. Moreover, the more recent jurisprudence on this issue demonstrates how, as counsel becomes more attuned to this issue, ad hoc committees are attempting to further define the standard, including which party bears the burden of proof. Yet, as these issues are constantly evolving, these ad hoc committees are not entirely consistent. This risk can be traced back to the fact that the ICSID Convention does not give any indication as to what circumstances warrant a stay, whether there should or should not be a presumption in favour of a stay, or where the burden of proof lies. By forcing ad hoc committees to concoct a legal standard, assign a burden of proof, and exercise their discretion on the facts presented, the ICSID system is inevitably breeding unpredictable and often contradictory decisions. III. STAYS OF ENFORCEMENT IN THE NON-ICSID CONTEXT The inconstant case law is not only found in the ICSID context. Cases that have arisen in the non-ICSID context also provide dissimilar analyses and varying standards. Though there is not much difference in principle between the procedures for seeking a stay of enforcement in an ICSID versus non-ICSID context,70 there are some significant differences between the regimes. The key difference concerns the determination as to which law will govern the stay of enforcement. Whereas the Convention will always govern stays of enforcement concerning ICSID awards, the case is not as clear in the non-ICSID context. One possibility is that the stay of enforcement will be governed by the law of the domestic court in the enforcement jurisdiction. However, it is also possible for a party to seek a stay of enforcement in the place of arbitration—typically during a pending set-aside proceeding in that jurisdiction—in which case the law of the place of the arbitration will govern. This difference becomes even more complex considering that a decision by one domestic court to stay enforcement of an award is arguably only valid in that court’s home state.71 Therefore, despite a successful stay of enforcement at the place of arbitration, the award may still be enforced in other states, even if a challenge is still pending.72 In such cases, as mentioned above, it is up to the courts at the place(s) of enforcement to determine—in accordance with its own law—whether or not to stay enforcement pending the outcome of the challenge at the place of arbitration. Most arbitration statutes are silent on how to address stays of enforcement during the challenge of an award. Thus, one has to look at surrounding legislation and domestic court practice in order to determine the scope and conditions of courts’ powers. This will also help tease out examples of inconsistencies in the few cases that are available on this issue. Before turning to the majority trend found in most jurisdictions, the example of France must first be considered. Before 2011, France seems to have been a rare jurisdiction in which enforcement was automatically stayed pending a set-aside proceeding.73 However, as noted, this law was changed in 2011.74 Now, instead of having an automatic stay of enforcement the court hearing the challenge may halt the enforcement if it risks seriously prejudicing the rights of one of the parties.75 The 2011 change—although it arguably creates a relatively high standard—brought France more in line with the majority view in most other jurisdictions. The majority view that has emerged for a number of jurisdictions is for the domestic courts to review the merits of the set-aside application, and the likelihood of its success, as part of their balancing act when determining whether to allow the stay.76 This consideration is largely absent from the reasoning of ICSID annulment committees77 (see Section II above). An example of a jurisdiction utilizing this approach is Switzerland. Since an international arbitration award rendered in Switzerland is enforceable as of the notification to the parties, the Federal Tribunal will only order a stay of enforcement as an exceptional measure.78 Against that background, a party has to request a stay and the request is only admissible once a set aside application has been filed.79 The Federal Tribunal has a wide discretion to decide on the request. The conditions to be considered by the court are as follows: The party requesting the stay has demonstrated that the immediate enforcement of the award exposes it to serious and irreparable harm in its ‘legitimate legal interests’. The interests of the party requesting the stay prevail over those of the party objecting to such stay. The challenge itself has very strong prima facie chances of success.80 Under these conditions, stays of enforcement are rarely granted: in practice, the award creditor must be either on the verge of bankruptcy or located in a country where it would be impossible to recover amounts that have already been paid if the award is then set aside.81 In Sweden, a stay can only be ordered by the court hearing the set-aside, which has to balance the parties’ respective interests, taking into account the objective of a final and binding award.82 In practice, the test under Swedish law often turns on the likelihood of the award being set aside.83 The situation in the Netherlands seems to be similar: a stay is not automatic and only granted if the court finds ‘important reasons’ justify it.84 Another example of a jurisdiction where the merits of the set-aside is examined when determining whether to stay enforcement is Canada. In the words of the Ontario Court of Justice, courts must judge ‘whether there is a serious issue to be tried’ in the challenge against the award.85 In 2015, the English Commercial Court clarified the situation under English law.86 In that case, one party had successfully asked an English court to pre-emptively stay the enforcement of the arbitral award pending a challenge of the award, even though no enforcement had yet been sought. The original stay was modified by the Commercial Court, which made clear that it applied only to enforcement effort in England and Wales and not, as the language of the original order implied, globally. Subsequently, the other party applied to have the stay discharged in its entirety, arguing that it should not have been ordered in the first place. In judging the application, the Commercial Court was ‘prepared to assume’ that it had jurisdiction to order a stay of enforcement,87 but found it inappropriate to exercise that mandate in this particular case.88 The court pointed out that the stay order, as modified in its second version, did not apply globally, and that there was no intention to seek enforcement in England or Wales (where the debtor did not seem to have any assets).89 Furthermore, if the award creditor did subsequently seek enforcement in England or Wales, the civil procedure rules would allow the debtor to request a stay at that stage, pending the outcome of the set-aside proceeding.90 The stay was therefore lifted. Regardless of whether or not a jurisdiction aligns itself with the majority view on whether or not to grant a stay of enforcement, the fact that the court will delve into the merits of the set-aside creates uncertainty as to how different jurisdictions will rule on the same case. This highlights the importance of the place of arbitration which, unlike in the self-enclosed ICISD system, will determine the frames for the challenge against an award. Moreover, in the context of stays of enforcement, there is a possibility for a party against which enforcement is sought to have to seek a stay of enforcement in several jurisdictions. Since such stays of enforcement will be interpreted by a domestic court according to its domestic law and jurisprudence, it is difficult for a user of arbitration to know whether or not it will be able to successfully seek a stay of enforcement, or defend against one, without any express indication by the rules applicable to the arbitration. IV. THE PROVISION OF A SECURITY—A COUNTERBALANCE TO PREJUDICE Though there have been some clearly defined trends in recent years, for example, a trend away from the presumption that a stay of enforcement is ‘automatic’ in both the ICSID and non-ICSID contexts, ad hoc committees have become more proactive in trying to establish fairness and equality between the parties. Cognisant that a stay of enforcement would prejudice a party that is entitled to receive payment under an award, ad hoc committees have tried to balance this prejudice with a counterbalancing prejudice to the award creditor. The prevailing trend to counterbalance this prejudice is for ad hoc committees to condition their stay of enforcement on the provision of a guarantee or security by the applicant for annulment (or setting aside). This practice has gained wide support. As Professor Schreuer has commented: In the First Edition of this Commentary, it was said that the requirement of a performance bond by the party seeking annulment has much to commend itself. As the above survey shows, this solution has been adopted in a number of cases. Until an award is annulled, the award debtor must be presumed to be under an obligation to pay eventually. The award creditor’s annulment risk may be suitably offset by a reduction of his enforcement risk.91 Similarly, Paul Friedland noted that such a requirement ‘furthers the purposes of the ICSID arbitration system by discouraging frivolous applications for annulment by parties who could not reasonably expect to gain annulment’.92 As described above, out of 43 requests for the stay of enforcement, 36 granted those requests, and 22 conditioned the stay of enforcement on some type of security or written undertaking. In 11 of those 22 cases, the stay was terminated because the condition had not been satisfied.93 This bird’s eye view of securities on stays of enforcement, however, does not aptly reflect its chequered past. From 1985 until 2004, all ad hoc committees except one required the award debtor to post a security as a condition for the stay of enforcement.94 In the first case in 1985, Amco v Indonesia, the ad hoc committee considered that the condition was warranted since ‘the inevitable lapse of time involved in annulment proceedings, where a stay of enforcement is extended until final resolution of the application for annulment, may appropriately be balanced by the prompt enforcement of the original award, if it is eventually maintained.’95 Similarly, the ad hoc committee in Wena Hotels v Egypt held that ‘it seems fair and just […] that the continuation of the stay be counter-balanced by requiring the posting of security’.96 That jurisprudence changed in 2004, beginning with the ad hoc committee in Mitchell v Congo,97 where the ad hoc committee acknowledged a general practice in favour of granting stays of enforcement conditioned on a security, but that this practice had no basis in the ICSID Convention.98 The ad hoc committee reasoned that: [t]he strongest argument against the granting of a guarantee […] is that its beneficiary would be in a much more favourable position regarding the enforcement of the award than he was before the provisional stay. […] The above argument is strengthened by the fact that such an improvement in the position of the beneficiary of the award is juxtaposed with Article 55 of the Convention, which preserves the immunity of the signatory States from execution.99 The new trend rebuking the idea that provisions of security must be granted continued with Azurix v Argentina. In that case, the ad hoc committee, recognizing that previous ad hoc committees had taken divergent approaches on how to handle securities on stays of enforcement, did not accept Azurix’s contentions that a rule or norm has emerged mandating that the provision of security is ‘an automatic or counterbalancing right’ to a stay or that, save for limited exceptions, it ought to be required as of course in order to eliminate any ‘reasonable doubt as to the State’s intent to comply’.100 After performing a contextual analysis of the ICSID Convention as it relates to annulment, the ad hoc committee held that ‘[t]o require that security be provided as a matter of course in all but the exceptional case would risk compromising the important confidence-balancing function for state parties served by the annulment procedure.’101 The trend was continued for several years with cases such as MTD v Chile (2005), Enron v Argentina (2008), Victor Pey Casado v Chile (2008), and Continental Casualty v Argentina (2009). The ad hoc committee in Repsol v Petroecuador was an exception to the post-2004 trend.102 That ad hoc committee held that: in a minority of cases before ICSID, the stay of enforcement of the award was maintained without a bond being required. […] [T]hese [minority] decisions could be justified by the fact that they entailed relatively small sums, or because there were special circumstances’.103 The ad hoc committee considered that ‘the practice of requiring a bond is correct in order to prevent a party from applying for an annulment for the purposes of delaying or extending the enforcement date for the arbitral award’.104 It should be noted here that the ad hoc committee’s decision considered that ‘Petroecuador had already benefited from a long stay of enforcement of the award without incurring any costs, to Repsol’s prejudice’.105 Besides Repsol and a few other exceptions, the clear trend against ordering a party to post a security of some kind seemed to continue until around 2013. The ad hoc committee in Occidental v Ecuador, referring back to Mitchell v Congo, held that: [i]n normal circumstances, conditioning the stay on the posting of security would go beyond counterbalancing the effect of the stay: it would put the award creditor in a better situation than it was prior to the annulment application, because it would provide the creditor with a form of conditional payment in advance.106 However, the ad hoc committee still reinforced the practice that a security is often required when there are serious doubts that the award debtor has a history of non-compliance with its financial obligations. Referring to 10 previous cases, the ad hoc committee found: ‘If there is […] an objective risk that the State will not honor its commitments, ad hoc committees have consistently found that security is appropriate to provide assurance that the award debtor will comply with the award if it is ultimately upheld.’107 Recent case law shows, however, that there is no clear trend in the jurisprudence as of the date of this article. The outcome is still unpredictable both in scope and degree. Two recent decisions on the stay of enforcement against Venezuela demonstrate the differing approaches two ad hoc committees can take when faced with two requests by the same party. In March 2016, the ad hoc committee in Flughafen v Venezuela decided to maintain a stay of enforcement subject to Venezuela posting an unconditional bank guarantee. The ad hoc committee did not find any reason to lift the stay of enforcement, by reason of a risk of non-compliance or otherwise, but still reasoned that a financial guaranty is a convenient way to harmonize the presumptive validity of the award with the time required for annulment proceedings.108 It was an effective way to find equilibrium between the rights of both parties—the claimants receiving a favourable award and the respondent having the right to seek its annulment.109 In the other case, OI v Venezuela, the ad hoc committee rendered a decision on the stay of enforcement just one month after Flughafen. Unlike Flughafen, the ad hoc committee in OI was persuaded by three specific pieces of evidence presented by the respondent on annulment that there was a serious risk of non-compliance on behalf of Venezuela. Specifically, the ad hoc committee referred to (i) the fact that high ranking officials in Venezuela expressly stated that it would not comply with ICSID decisions or with the ICSID Convention; (ii) Venezuela has openly and vociferously attacked the ICSID system; and (iii) that the domestic legal system in Venezuela is contrary to the ICSID Convention, Articles 53 and 54.110 The ad hoc committee rejected the request to continue the stay of enforcement entirely. In sum, whereas the idea of posting a security on a stay of enforcement was intended to remedy the natural imbalance caused by delaying the immediate enforcement of an ICSID award, it became yet another layer of confusion and uncertainty for both ad hoc committees and parties alike. V. THE NEED FOR AN EXPRESS PROVISION GRANTING AN AD HOC COMMITTEE THE AUTHORITY TO ORDER A PROVISION OF SECURITY—A SOLUTION? As it stands now, the ICSID Convention does not expressly provide that an ad hoc committee can and should condition a stay of enforcement on the provision of security. Consequently, ad hoc committees are hesitant to order a party to take any action—especially something as serious as ordering a party to commit to fulfilling its payment obligations under an adverse award above and beyond the enforcement mechanism outlined in the ICSID Convention.111 As clarified by the ad hoc committee in Azurix v Argentina: To apply a strict rule that the price for the stay is the provision of security appears to the Committee to create a positive gloss to the enforcement regime provided for under Section 6 of the Convention. Effectively, such an approach would be to add a provision that is neither express nor implicit in the ICSID Convention. […] In the Committee’s view, such a default position would be in derogation to the approach to interpretation reflected in Article 31(1) of the Vienna Convention […] and also would work in a de facto sense impermissibly to amend the ICSID Convention by substituting a new and absolute enforcement mechanism for the qualified provisions of the Convention itself.’112 Despite the fact that there is no express authority to grant a stay of enforcement conditioned on a security, nor a presumption in favour of a condition of a security, ad hoc committees are still utilizing their discretion to grant, in a majority of cases, stays of enforcement conditioned on the provision of a type of security. Ad hoc committees have become creative in how they exercise their discretion. Seeing a need to provide some sort of security, but not entirely comfortable with ordering the State to make any financial commitments, many ad hoc committees have attempted to forge yet another middle ground—a written undertaking. Ad hoc committees have found that this type of security affirms the award debtor’s obligation under Articles 53 and 54 of the Convention, forces the award debtor to take a position against which it could be held in future proceedings before ICSID or otherwise, yet still does not order the award debtor to immediately compensate the award creditor. This was the outcome in Duke Energy v Peru (2009), Transgabonais v Gabon (2009), Rumeli v Kazakhstan (2009), EDF v Argentina (2013), Elsamex v Honduras (2014), Micula v Romania (2014), and Venezuela Holdings v Venezuela (2015).113 Unfortunately, the compromise of a written undertaking has no ‘teeth’. Only in situations like in Micula v Romania, where Romania was forced to disaffirm that it would make payments under the award as doing so would be in violation of EU law, would a written undertaking carry any weight. Another creative solution was for ad hoc committees to derive their competence from the general authority to order provisional measures, specifically Rule 39 of the ICSID Arbitration Rules and Article 47 of the ICSID Convention. According to Rule 39, ‘a party may request that provisional measures for the preservation of its rights to be recommended by the Tribunal.’114 Even if a party does not expressly request such relief, the tribunal ‘may also recommend provisional measures on its own initiative’.115 Then, by virtue of Rule 53, the Rules shall apply ‘mutatis mutandis to any procedure relating to the interpretation, revision or annulment of an award and to the decision of the Tribunal or Committee’.116 However, even though the first draft of the ICSID Convention expressly included that an ad hoc committee could recommend any provisional measure necessary for the protection of the rights of the parties, the provision was later removed before the Convention was finalized.117 Consequently, several ad hoc committees faced with ordering a security for enforcement did not find they could derive their competence from articles and rules referring to provisional measures.118 Finally, some arbitrators have derived their power to order a security on stays of enforcement from their inherent power to protect the rights of the parties and the integrity of the proceedings. As held by the ad hoc committees in Quiborax v Bolivia and Enron v Argentina, the exclusion of an express rule did not necessarily mean that the ad hoc committee lacked the competence to order some sort of security, but just that it was within their implicit authority to establish an equilibrium between the rights of the parties as relates to the pending resolution of the annulment proceeding.119 The ad hoc committees found this to be compatible with the objectives of Article 52(5) of the ICSID Convention.120 Although leaving it up to the discretion of the ad hoc committee is convenient for the committee members, the jurisprudence shows that this is not always ideal, nor in line with the objectives of the ICSID Convention. Without any uniform basis from which an ad hoc committee may derive its power or any guidance on when to exercise such power, the jurisprudence becomes incoherent, inconsistent and unpredictable. With such varying methods and standards applied by ad hoc committees faced with this issue, an express rule for securities on stays of enforcement would foster predictability and consistency, strengthening the parties’ abilities to evaluate potential costs, benefits, risks and other economic factors involved in arbitration. As discussed by the Enron committee: Although the previous decisions may not have examined the question in any detail, and may not constitute a subsequent practice for the purposes of Article 31(3)(b) of the Vienna Convention, the Committee considers that weight must nonetheless be given to the fact that there is now what amounts to a jurisprudence constante to the effect that a stay may be made conditional on the provision of security. While the Committee is not bound by these previous decisions, it considers that it should take into account the possible effect on the stability and predictability of the ICSID system if it were to depart from a consistent line of previous decisions.121 This pursuit for a jurisprudence constante would be aided by an express provision in the ICSID Rules. Express provisions can already be found outside the ICSID context. For example, both the UNCITRAL Model Law and the New York Convention expressly allow for a provision of security at the enforcement stage.122 The comparison is limited, however, since the extent to which domestic jurisdictions grant their courts this power also during set-aside proceedings within their own jurisdiction seems to be less studied—and less frequently an issue.123 Many institutional rules as well already contain a similar provision for securities on costs: the LCIA Rules (Article 25.2), the HKIAC Rules (Article 24), the CEPANI Rules (Article 27(1)) and the SIAC Rules (Article 27(k)).124 Users of arbitration should not be concerned with memorializing an inherent power that is often exercised. If the drafters of this future provision take inspiration from similar formulations in other sets of rules, any security provision will likely allow the competent body, a court, tribunal or ad hoc committee, to exercise its discretion in deciding whether or not to grant a request for the provision of a security. The standard for ad hoc committees to use their discretion mirrors that which is employed by ad hoc committees exercising their inherent power. The difference will come if and when the drafters of the specific amendment to the ICSID Rules decide whether to include any additional guidance in the ICSID Rules, that is, what factors ad hoc committees should consider when assessing whether or not to order securities or whether ad hoc committees can order such remedies sua sponte. Also by leaving such decisions to the discretion of the ad hoc committees, the concerns of many critics of including an express provision will be assuaged. Concerns such as how such a provision would abrogate the scheme for security under Article 54, discriminate against developing countries or penalize applicants for initiating annulment proceedings could all be addressed in the ad hoc committees’ determination of how best to formulate which type of security will be ordered. However, these concerns should not justify depriving ad hoc committees of an express power to grant such securities in the first place. What is more, the fundamental characteristics of an ICSID award will be reinforced. An ICSID award is not supposed to be subject to appeal, but instead should be made immediately enforceable. It is undeniable that sophisticated parties are now using the annulment process as an additional tool by which to ensure not only that they have had an opportunity to present their case but also to thwart the possibility of an adverse award and its enforcement. Users of the ICSID system have then found that, with unchartered territories such as securities on stays of enforcement, there are gaps and ambiguities in the plain wording through which they can try to gain an advantage. These tactics, however, cannot hinder the promotion of the ICSID system and its core tenets. ICSID should instead acknowledge this new outgrowth of issues related to continued stays of enforcement has caused some unpredictability and inconsistency in the ICSID system and accordingly amend the ICSID Rules to correct it. Footnotes 2 ‘The ICSID Rules Amendment Process’, available at <https://icsid.worldbank.org/en/Documents/about/ICSID%20Rules%20Amendment%20Process-ENG.pdf> accessed 14 November 2017. For the purposes of this article, the term ‘stay’ hereinafter refers to a continued stay of enforcement, when the provisional stay of enforcement enshrined in art 54(1) of the ICSID Rules of Procedure for Arbitration Proceedings (ICSID Arbitration Rules) (April 2006) has expired. 3 Convention on the Settlement of Investment Disputes between States and Nationals of Other States (opened for signature 18 March 1965, entered into force 14 October 1966) (ICSID Convention), art 53(1). ‘The award shall be binding on the parties and shall not be subject to any appeal or to any other remedy except those provided for in this Convention. Each party shall abide by and comply with the terms of the award except to the extent that enforcement shall have been stayed pursuant to the relevant provisions of this Convention.’ 4 See Christoph Schreuer, ‘ICSID Annulment Revisited’ (2003) 30 L Issues Econ Integ 103, 104 and Julien Fouret, ‘Stay(ing) on Track or Falling off the Edge: The Absence of Legal Security in the Ad Hoc Committees’ Decisions under Article 52(5) of the ICSID Convention’ (2012) 27(2) ICSID Rev—FILJ 305. 5 Aron Broches, ‘Observations on the Finality of ICSID Awards’ (1991) 6(2) ICSID Review—FILJ 321, 322. 6 Christoph Schreuer, ‘From ICSID Annulment to Appeal—Halfway Down the Slippery Slope’, (2011) 10(2) Law & Practice of International Courts and Tribunals 211, 212. The limited and exceptional nature of the annulment remedy has been repeatedly emphasized by ICSID Secretaries-General and confirmed by ad hoc committees. See ICSID, ‘Background Paper on Annulment for the Administrative Council of ICSID’ (2012) 27(2) ICSID Rev—FILJ paras 74–75 (with references). 7 ICSID Convention (n 3), art 52(5). 8 ICSID Arbitration Rules (n 2), r 54(5). 9 Saipem SpA v People’s Republic of Bangladesh, ICSID Case No ARB/05/7, Decision on Jurisdiction and Recommendation on Provisional Measures (21 March 2007) para 67. 10 See eg Amco Asia Corporation and others v Republic of Indonesia (I), ICSID Case No ARB/81/1, Ad hoc Committee Decision on the Application for Annulment (16 May 1986)  1 ICSID Reports 509, 515 reproduced in Paul D Friedland, ‘Provisional Measures and ICSID Arbitration’ (1986) 2(4) Arb Intl 335; Amco Asia Corporation and others v Republic of Indonesia (II), ICSID Case No ARB/81/1, Interim Order No 1 Concerning the Stay of Enforcement of the Award (2 March 1991) paras 7–12  9 ICSID Rep 59, 60; Wena Hotels Limited v Arab Republic of Egypt, ICSID Case No ARB/98/4, Procedural Order No 1 of the Ad hoc Committee Concerning the Continuation of the Stay of Enforcement of the Award (5 April 2001) para 7(b). 11 See eg MTD Equity Sdn Bhd and MTD Chile SA v Republic of Chile, ICSID Case No ARB/01/7, Ad hoc Committee's Decision on the Respondent’s Request for a Continued Stay of Enforcement of the Award (1 June 2005) para 29; Azurix Corp v Argentine Republic, ICSID Case No ARB/01/12, Decision on the Continued Stay of Enforcement of the Award (28 December 2007) para 22; Victor Pey Casado and President Allende Foundation v Republic of Chile, ICSID Case No ARB/98/2, Decision on Stay of Enforcement of the Award (5 August 2008) 2; Enron Creditors Recovery Corporation (formerly Enron Corporation) and Ponderosa Assets, LP v Argentine Republic, ICSID Case No ARB/01/3, Decision on the Argentine Republic’s Request for a Continued Stay of Enforcement of the Award (7 October 2008) para 43. 12 Patrick Mitchell v Democratic Republic of the Congo, ICSID Case No ARB/99/7, Decision on the Stay of Enforcement of the Award (30 November 2004) para 28; Victor Pey Casado and President Allende Foundation v Republic of Chile, ICSID Case No ARB/98/2, Decision on the Republic of Chile’s Application for a Stay of Enforcement of the Award (7 May 2010) para 25. 13 Even one ICSID ad hoc committee cited this in support of its contention that stays of enforcement should be almost automatic. See Mitchell v Congo (n 12) para 28. 14 ICSID Convention (n 3), art 52(5). 15 ICSID Arbitration Rules (n 2), r 54(1). 16 ICSID Arbitration Rules (n 2), rr 54(1), (2), (4). There is an expedited procedure whereby the Committee must decide on the request for stay of enforcement within 30 days, if requested. See ICSID Arbitration Rules (n 2), r 54(2). 17 ICSID Arbitration Rules (n 2), r 54(4). 18 See eg Sempra Energy International v Argentine Republic, ICSID Case No ARB/02/16, Decision on the Argentine Republic’s Request for a Continued Stay of Enforcement of the Award (5 March 2009) para 24. 19 Fouret, ‘Stay(ing) on Track or Falling off the Edge’ (n 4). 20 ICSID, ‘Background Paper on Annulment for the Administrative Council of ICSID’ (2016) para 58, <http://documents.worldbank.org/curated/en/705861489478820495/pdf/113323-WP-PUBLIC-Background-Paper-on-Annulment-April-2016-ENG.pdf> accessed 14 November 2017. 21 Fouret, ‘Stay(ing) on Track or Falling off the Edge’ (n 4) 22 Amco v Indonesia (I) (n 10) 23 Amco v Indonesia (II) (n 10) paras 7–12. 24 Wena Hotels v Egypt (n 10) 25 ibid para 7(b). 26 MTD v Chile (n 11) para 29 (emphasis added). 27 ibid. 28 Compare MTD v Chile (n 11) paras 29–31, with CMS Gas Transmission Co v Argentine Republic, ICSID Case No ARB/01/8, Decision on the Argentine Republic’s Request for a Continued Stay of Enforcement of the Award (1 September 2006) paras 38–40. 29 Azurix v Argentina (n 11) para 22. 30 Enron v Argentina (n 11) para 40. 31 ibid para 41. 32 ibid para 42. 33 ibid para 43. 34 Mitchell v Congo (n 12) para 28. 35 ibid. The New York Convention, art VI, does not provide guidelines as to the circumstances in which a stay of enforcement should be granted. Thus, the competent authority is left to its sole discretion to grant a stay of enforcement if it deems it proper to do so. For an analysis of how the case law applying this article of the New York Convention has found that a stay of enforcement is not automatic; see Fouret, ‘Stay(ing) on Track or Falling off the Edge’ (n 4) and the following. 36 Victor Pey Casado v Chile, Decision on the Stay of Enforcement (n 12) para 25 (references omitted; emphasis added). 37 See eg Sempra v Argentina (n 18) para 27. 38 ibid. 39 Ioannis Kardassopoulos and Ron Fuchs v Georgia, ICSID Case Nos ARB/05/18 and ARB/07/15, Decision of the ad hoc Committee on the Stay of Enforcement of the Award (12 November 2010) para 26. 40 Libananco Holdings Co Limited v Republic of Turkey, ICSID Case No ARB/06/8, Decision on Applicant’s Request for a Continued Stay of Enforcement of the Award (7 May 2012) para 43. 41 SGS Société Générale de Surveillance SA v Republic of Paraguay, ICSID Case No ARB/07/29, Decision on Paraguay’s Request for the Continued Stay of Enforcement of the Award (22 March 2013) para 82. 42 Victor Pey Casado and President Allende Foundation v Republic of Chile, ICSID Case No ARB/98/2, Decision on the Republic of Chile’s Request for a Stay of Enforcement of the Unannulled Portion of the Award—Supplementary Decision (16 May 2013) para 40. 43 Occidental Petroleum Corporation and Occidental Exploration and Production Company v Republic of Ecuador, ICSID Case No ARB/06/11, Decision on the Stay of Enforcement of the Award (30 September 2013) para 47. 44 Elsamex SA v Republic of Honduras, ICSID Case No ARB/09/4, Decision of the ad hoc Committee on the Termination of the Stay of Enforcement of the Award (11 March 2014) para 90. 45 Sempra v Argentina (n 18) para 27. 46 Kardassopoulos and Fuchs v Georgia (n 39) para 26. 47 ibid (emphasis added). In that case, however, Messrs Kardassopoulos and Fuchs agreed that the stay of enforcement of the award should continue. 48 Libananco v Turkey (n 40) para 43. 49 This was referenced in inter alia Flughafen Zürich AG and Gestión e Ingeniería IDC SA v Bolivarian Republic of Venezuela, ICSID Case No ARB/10/19, Decision on the Termination of the Stay of Enforcement of the Award (11 March 2016) para 53. 50 SGS v Paraguay (n 41) para 82. 51 ibid para 87. 52 ibid para 84. 53 ibid para 85. 54 ibid para 86. 55 Victor Pey Casado v Chile Supplementary Decision (n 42) paras 36–37. 56 ibid para 37. 57 ibid para 40. 58 Total SA v Argentine Republic, ICSID Case No ARB/04/01, Decision on Applicant’s Request for a Continued Stay of Enforcement of the Award (4 December 2014) paras 76–80. 59 Antoine Abou Lahoud and Leila Bounafeh-Abou v Congo, ICSID Case No ARB/10/4, Decision on the Continuation of the Stay of Enforcement of the Award (30 September 2014) para 48. The ad hoc committee arrived at the unique conclusion that the circumstances to justify staying enforcement did not have to be ‘exceptional’. 60 Ioan Micula, Viorel Micula and others v Romania, ICSID Case No ARB/05/20, Decision on the Continued Stay of Enforcement of the Award (7 August 2014) para 37. One of the authors of this article, Brian Kotick, acted for Micula in the annulment proceedings. 61 ibid para 38. 62 ibid para 35. 63 ibid para 36. 64 ibid. 65 Quiborax SA and Non-Metallic Minerals SA v Plurinational State of Bolivia ICSID Case No ARB/06/2, Decision on the Request to Terminate the Provisional Stay of Enforcement of the Award (21 February 2017) para 42. 66 ibid. 67 ibid para 43. The ad hoc committee did find that the burden to prove the necessity of a guarantee lay with the claimants. 68 OI European Group BV v Bolivarian Republic of Venezuela, ICSID Case No ARB/11/25, Decision on Stay of Enforcement of the Award (4 April 2016) para 89. 69 ibid para 94. 70 This follows expressly from Article VI of the New York Convention, which similar to the ICSID Convention provides that the authority hearing the set-aside claim ‘may’ stay enforcement, as well as order suitable security. 71 Subject, of course, to rules of private international law. 72 It should be noted that a non-ICSID award could even be enforced by an enforcement court under the New York Convention even though it has been set aside at the place of arbitration. See art V(1)(e) provides that ‘recognition and enforcement may be refused’ in such circumstances (emphasis added). This has led a number of courts to allow enforcement of (commercial) arbitral awards despite them having been set aside at the place of arbitration. 73 Gaëtan Verhoosel, ‘Annulment and Enforcement Review of Treaty Awards: To ICSID or Not to ICSID’ (2008) 23(1) ICSID Review—FILJ 119–54, 144. 74 Decree 2011-48. See also Ellie Kleiman and Julie Spinelli,‘La réforme du droit de l’arbitrage, sous le double signe de la lisibilité et de l’efficacité’ (2011) Nos 26–27 Gazette du Palais, 9. 75 French Code of Civil Procedure, art 1526. 76 Andrea Bjorklund and Lukas Vanhonnaeker, ‘Stays of Enforcement Pending Annulment and Set-Asides in Investment Arbitration’ in Julien Fouret (ed), Enforcement of Investment Treaty Arbitration Awards: A Global Guide (Globe Law and Business 2013) 61. 77 ibid 62. 78 Elliot Geisinger and Alexandre Mazuranic, ‘Challenge and Revision of the Award’ in Elliott Geisinger and Nathalie Voser (eds), International Arbitration in Switzerland: A Handbook for Practitioners (2nd edn, Kluwer 2013) 233. 79 ibid. 80 ibid. 81 ibid, with further references. 82 Lars Heuman, Arbitration Law of Sweden: Practice and Procedure (Juris Publishing 2003) 656. 83 ibid. 84 2014 Dutch Arbitration Act, art 1060(8), translation provided by the Netherlands Arbitration Institute <http://www.nai-nl.org/downloads/Text%20Dutch%20Code%20Civil%20Procedure.pdf> accessed 25 April 2017. Another translation, provided by Linklaters, a law firm in Amsterdam, uses the phrase ‘serious reasons’, <http://www.linklaters.com/Insights/Pages/New-Dutch-Arbitration-Law.aspx> accessed 25 April 2017. 85 Europcar Italia SpA v Alba Tours International Inc  OJ 133, para 22, as cited by Bjorklund and Vanhonnaeker (n 76) 61. 86 Y and S  EWHC 612. 87 ibid paras 16–19. 88 ibid para 20. 89 ibid. 90 ibid. 91 Christoph Schreuer, The ICSID Convention: A Commentary (2nd edn, CUP 2009 ) 1081. 92 PD Friedland, ‘Provisional Measures and ICSID Arbitration, Arbitration International’ (1986) 2(4) Kluwer L Intl 349. 93 ICSID, ‘Background Paper on Annulment’ (2016) (n 20) para 58 (with references) 94 Amco v Indonesia (I) (n 10); Amco v Indonesia (II) (n 10); Southern Pacific Properties (Middle East) Limited v Arab Republic of Egypt, ICSID Case No ARB/84/3, Decision on Stay of Enforcement (29 September 1992), noted in (1993) 8(2) ICSID Rev—FILJ 264 (though agreed by the parties), and Wena Hotels v Egypt (n 10). The exception to this rule was Maritime International Nominees Establishment v Republic of Guinea, ICSID Case No ARB/84/4, Ad hoc Committee Decision (22 December 1989), published in (1990) 5 ICSID Rev-FILJ 95. 95 Amco v Indonesia (I) (n 10) para 348. 96 Wena Hotels v Egypt (n 10) 97 Mitchell v Congo (n 12) 98 ibid para 31. 99 ibid para 32. In spite of this, the ad hoc committee concluded that due the ‘unusual’ nature of annulment, a posting of a guarantee seems reasonable as long as it did not pose a significant financial burden on the party requesting the stay. Convinced that the DRC was in financial straits, the ad hoc committee concluded that no security was required so long as the award debtor provided adequate assurances that it would comply with its payment obligations, or conversely, did not present a risk that it would not comply with its international obligations under the ICSID Convention. 100 Azurix v Argentina (n 11) para 25. This was the position even though the claimant voiced specific concerns that Argentina would not comply with Article 54 of the ICSID Convention, pointing to publicly reported statements of government officials that said that ICSID decisions would be subject to review by the Argentine Supreme Court. 101 ibid para 31. 102 Two other exceptions of note include CDC Group plc v Republic of Seychelles, ICSID Case No ARB/02/14, and Sempra v Argentina (n 18). 103 Repsol YPF Ecuador, SA v Empresa Estatal Petróleos del Ecuador (Petroecuador), ICSID Case No ARB/01/10, Procedural Order No 1 (22 December 2005) paras 8–10. 104 ibid 10. 105 ibid. 106 Occidental v Ecuador (n 43) para 67 (references omitted) [citing Mitchell v Congo (n 12) paras 31–32]. 107 ibid para 68. The 10 cases referred to included: Amco v Indonesia (n 10), CDC v Seychelles (n 102), CMS v Argentina (n 28), Vivendi v Argentina, Sempra v Argentina (n 18), Duke Energy International Peru Investments No 1 Ltd v Republic of Peru, ICSID Case No ARB/03/28, Compagnie d'Exploitation du Chemin de Fer Transgabonais v Gabonese Republic, ICSID Case No ARB/04/5, Rumeli Telekom A.S. and Telsim Mobil Telekomunikasyon Hizmetleri AS v Republic of Kazakhstan, ICSID Case No ARB/05/16, Kardassopoulos and Fuchs v Georgia (n 39), and Joseph C Lemire v Ukraine, ICSID Case No ARB/06/18. 108 Flughafen v Venezuela (n 49) para 69. 109 ibid. 110 OI European Group v Venezuela (n 68) paras 100–108. 111 This apprehension can be likened to the response of tribunals that have been asked to issue security for cost awards, which has been overwhelmingly seen as an uncomfortable fit in the ICSID context. This point has been reinforced by the tribunal in Libananco v Turkey (n 40) and Eurogas Inc and Belmont Resources Inc v Slovak Republic, ICSID Case No ARB/14/14, or in the annulment context by Commerce Group Corp and San Sebastian Gold Mines, Inc v Republic of El Salvador, ICSID Case No ARB/09/17 (finding that a security for costs award could ‘seriously affect’ the applicant’s right to seek annulment). Security for costs is analogous since it deals with one party being impecunious and/or refusing to comply with an order or award. See RSM Production Corporation v Saint Lucia, ICSID Case No ARB/12/10, Decision on Saint Lucia’s Request for Suspension or Discontinuation of Proceedings (8 April 2015) para 68. 112 Azurix v Argentina (n 11) paras 34–35. 113 See ICSID, ‘Background Paper on Annulment’ (2016) (n 20) para 58 (with references). 114 ICSID Arbitration Rules (n 2), r 39(1). 115 ICSID Arbitration Rules (n 2), r 39(3). 116 ICSID Arbitration Rules (n 2), r 53 (emphasis added). See Enron v Argentina (n 11) paras 30–35. 117 History of the ICSID Convention, vol II-2, 856. The majority rejected two proposals related to the provisional measures during the annulment process: (i) that the Committee may, pending its decision, recommend a continuation of provisional measures recommended by the tribunal; or (ii) the Committee may, pending its decision, recommend provisional measures. 118 Quiborax v Bolivia (n 65) para 44; Enron v Argentina (n 11) para 31. 119 Quiborax v Bolivia (n 65) at fn 43 [citing Enron v Argentina (n 11) para 26]. 120 ibid. 121 Enron v Argentina (n 11) para 33. 122 Articles 36(2) and VI, respectively. For an overview of domestic court practice in this context, see Nicola Christina Port, Jessica R Simonoff et al, ‘Article VI’, in Herbert Kronke, Patricia Nacimiento et al. (eds), Recognition and Enforcement of Foreign Arbitral Awards: A Global Commentary on the New York Convention (Kluwer 2010) 433 and the following. 123 The only reported example of a stay of enforcement during the challenge of a treaty-based award seems to be the Sedelmayer case, in which the Stockholm District Court stayed the enforcement upon a request by the Russian Federation (see The Russian Federation v Franz J Sedelmayer, Stockholm District Court, T 6-583-98, 18 December 2002. Another example came up in the English Commercial Court in 2015 (which did not concern a treaty-based award). In its judgment, referring to previous English case law, the court stated that it accepted, as a matter of principle, that it may ‘in an appropriate case, make any order restricting enforcement of an award conditional upon the respondent putting up security’. On the facts before it, however, the court found no reason to make an order restricting enforcement conditional on the provision of security. See also Apis AS v Fantazia Kereskedelmi KFT  1 All ER (Comm) 348 and Socadec SA v Pan Afric Impex Company Limited  EWCH 2086. 124 Though the ICC Rules and UNCITRAL Rules do not make specific references to this form of relief, it is generally recognized and accepted that such power does exist within the ambit of interim measures. © The Author(s) 2018. Published by Oxford University Press on behalf of ICSID. All rights reserved. For permissions, please email: email@example.com This article is published and distributed under the terms of the Oxford University Press, Standard Journals Publication Model (https://academic.oup.com/journals/pages/about_us/legal/notices)
ICSID Review: Foreign Investment Law Journal – Oxford University Press
Published: Feb 22, 2018
It’s your single place to instantly
discover and read the research
that matters to you.
Enjoy affordable access to
over 18 million articles from more than
15,000 peer-reviewed journals.
All for just $49/month
Query the DeepDyve database, plus search all of PubMed and Google Scholar seamlessly
Save any article or search result from DeepDyve, PubMed, and Google Scholar... all in one place.
Get unlimited, online access to over 18 million full-text articles from more than 15,000 scientific journals.
Read from thousands of the leading scholarly journals from SpringerNature, Wiley-Blackwell, Oxford University Press and more.
All the latest content is available, no embargo periods.
“Hi guys, I cannot tell you how much I love this resource. Incredible. I really believe you've hit the nail on the head with this site in regards to solving the research-purchase issue.”Daniel C.
“Whoa! It’s like Spotify but for academic articles.”@Phil_Robichaud
“I must say, @deepdyve is a fabulous solution to the independent researcher's problem of #access to #information.”@deepthiw
“My last article couldn't be possible without the platform @deepdyve that makes journal papers cheaper.”@JoseServera