No power to reconsider says ICSID tribunal (ConocoPhillips Petrozuata BV & Ors v Venezuela)

No power to reconsider says ICSID tribunal (ConocoPhillips Petrozuata BV & Ors v Venezuela)

On 10 March 2014, an ICSID tribunal concluded, by a majority, that it did not have the power to reconsider its own decision on jurisdiction and the merits issued on 3 September 2013 (the 2013 Decision). Professor Georges Abi-Saab disagreed emphatically with the majority’s decision. In this article, we consider both sides of the argument on this issue.

The majority decision

The respondent's grounds for requesting that the tribunal exercise a power to reconsider aspects of its 2013 Decision are set out in Professor Abi-Saab's dissenting opinion. In summary, the respondent sought a reconsideration of the 2013 Decision on the basis of new evidence that had allegedly come to light via a US Embassy cable leaked by Wikileaks.

However, Judge Kenneth Keith (President, New Zealand) and Mr L. Yves Fortier CC, QC (Canadian), making up the majority on the tribunal, stated expressly that their decision did not address the respondent's grounds or the supporting evidence, as 'the power must be shown to exist before it can be exercised'. Accordingly, the majority proceeded to consider the provisions of the ICSID Convention (arts 43, 44 and 53) and the ICSID Arbitration Rules (rule 38(2)) (as well as commentaries, matters of principles and decisions of courts and tribunals) in order to answer the question whether or not it had the power to reconsider.

The majority distinguished between its 2013 Decision and an 'Award', which, pursuant to the ICSID Convention, is the form of decision reached at the end of the whole proceeding. The majority stated that the current proceeding had not yet reached that stage (the parties had not yet exchanged quantum memorials). Accordingly, art 53 of the ICSID Convention (which deals with recognition and enforcement of awards) was considered not to be directly applicable, although the arbitrators did not rule out that it could be relevant in a more general sense. In its view, the 2013 Decision did not take an interim or preliminary form in respect of the matters on which it ruled and that the tribunal's decisions 'in accordance with practice are to be incorporated in the Award' and 'resolve points in dispute between the Parties have res judicata effect'.

In relation to art 44 of the ICSID Convention, the majority recognised that the provision is designed to enable gaps in arbitral procedure to be filled, but that it could not be seen as 'conferring a broad unexpressed power of substantive decision'. The majority went on to state that procedural provisions couldn't provide the source of a 'power to reconsider' and that section 5 of the ICSID Convention already confers powers on the tribunal regarding the interpretation and revision of an award and on ad hoc Committees to annul awards on prescribed grounds:

'It is in those ways and those alone that decisions such as that in September 2013 can be questioned, changed or set aside... Those provisions and that structure exclude the possibility of the proposed powers of reconsideration being read into the Convention.'

The dissenting opinion

Professor Georges Abi-Saab disagreed emphatically with the majority’s decision and his dissent is worth reading in full.

The dissenting arbitrator argued that a strong case can be made for the existence of a general power of reconsideration by an ICSID tribunal of its interlocutory decisions (within certain limits or under certain conditions) in a case still pending before it. He also stated that even if a general power did not exist, there remains the possibility of a specific power for dealing with requests based on 'a particular or certain particular legal grounds'. He went on to state that art 44 of the ICSID Convention is a 'partial codification and specific application of the inherent jurisdiction or powers of any judicial or adjudicative organ. A jurisdiction which first incarnated by and evolved through the development of the general principle of Kompetenz-Kompetenz... but which transcended this principle...'.

Developing this idea, Mr Abi-Saab argued that where the credibility and integrity of the tribunal are called into question due to, for example, the tribunal becoming aware that it had committed an error in interpreting the evidence or establishing the facts on which it based its legal findings, the tribunal's inherent jurisdiction empowers and even mandates it to reconsider its prior decision. The arbitrator considered that this was such a case for the tribunal taking such action and concluded as follows:

'[66] In these circumstances, I don’t think that any self-respecting Tribunal that takes seriously its overriding legal and moral task of seeking the truth and dispensing justice according to law on that basis, can pass over such evidence, close its blinkers and proceed to build on its now severely contestable findings, ignoring the existence and the relevance of such glaring evidence. [67] It would be shutting itself off by an epistemic closure into a subjective make-believe world of its creation; a virtual reality in order to fend off probable objective reality; a legal comedy of errors on the theatre of the absurd, not to say travesty of justice, that makes mockery not only of ICSID arbitration but of the very idea of adjudication.'

Some thoughts on the issue

Mr Abi-Saab's argument in favour of a power of reconsideration in certain circumstances, based on an enhanced doctrine of Kompetenz-Kompetenz, is attractive, not least because of the strength of the arbitrator's rhetoric. However, whilst the ICSID Convention and ICSID Arbitration Rules clearly do not provide a complete, exclusive code for the conduct of ICSID arbitration, the majority's view that the safeguards already embedded within the ICSID system to address the respondent's concerns are sufficient is sensible. Nevertheless, an express, exceptional power of reconsideration in strictly limited circumstances would perhaps remove the need for the parties to wait until later in the proceeding to raise such arguments, making the procedure more efficient and cost effective.

Decision details

The decision on the respondent's request for reconsideration was issued on 10 March 2014.

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This article was first published on Lexis®PSL Arbitration on 14 March 2014. Click here for a free trial of Lexis®PSL.

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About the author:

Barry specialises in international arbitration and commercial litigation. He trained and practised at Jones Day before joining Pinsent Masons. At LexisNexis, Barry is Head of Arbitration and Head of the Lexis®PSL Dispute Resolution Group.

In practice, Barry’s work included commercial, aviation and technology arbitrations pursuant to international arbitral rules, involving UK and international clients. He also has a background in general commercial, civil fraud and IT litigation, including experience before the High Court. While in private practice, Barry worked with a broad range of clients from the private and public sectors.

At LexisNexis, when not focused on the strategic development and operational requirements of the Dispute Resolution Group, Barry’s content work focuses on the law and practice of international commercial arbitration and investment treaty arbitration. In addition to his work for Lexis®PSL, Barry contributes to the LexisNexis Dispute Resolution Blog and New Law Journal on litigation and arbitration matters