93612 2014 ANNUAL REPORT 2014 ANNUAL REPORT Headquarters of the World Bank, Washington, D.C., Laura Amelia Pettinelli, World Bank CONTENTS Letter of Transmittal 1 ICSID Secretariat 2 Chapter 1: Introduction 5 Chapter 2: Membership 7 Chapter 3: Panels of Arbitrators and of Conciliators 15 Chapter 4: Operations of the Centre 18 Chapter 5: Outreach 38 Chapter 6: Forty-seventh Annual Meeting of the Administrative Council 50 Chapter 7: Finance 53 Financial Statements 54 Independent Auditors’ Report 68 ii | ICSID ANNUAL REPORT 2014 | iii Seat of the International Centre for Settlement of Investment Disputes, Washington, D.C., Candice Ayento, World Bank INTERNATIONAL CENTRE FOR SETTLEMENT OF INVESTMENT DISPUTES August 29, 2014 Dear Mr. Chairman, I am pleased to submit to the Administrative Council for its approval the Annual Report on the operation of the International Centre for Settlement of Investment Disputes. This Annual Report covers the fiscal year from July 1, 2013 to June 30, 2014. The Report includes the audited financial statements of the Centre, presented pursuant to Administrative and Financial Regulation 19. Yours sincerely, Meg Kinnear Secretary-General Dr. Jim Yong Kim Chairman Administrative Council International Centre for Settlement of Investment Disputes iv | ICSID ANNUAL REPORT 2014 | 1 SECRETARIAT OF THE INTERNATIONAL CENTRE FOR SETTLEMENT OF INVESTMENT DISPUTES June 30, 2014 Meg Kinnear, Secretary-General PARALEGAL, ADMINISTRATIVE AND CLIENT SUPPORT STAFF Olutosin O. Akinyode, Paralegal LEGAL STAFF Joy Berry, Paralegal Aurélia Antonietti, Team Leader/Legal Counsel Arkiatou Boissaye, Paralegal Gonzalo Flores, Team Leader/Legal Counsel Ivania Fernández, Paralegal Milanka Kostadinova, Team Leader/Legal Counsel Natalie O’Connor, Paralegal Martina Polasek, Team Leader/Legal Counsel Cristina Padrao, Paralegal Daniela Argüello, Legal Counsel—Institutional Matters Angela Ting, Paralegal James Claxton, Legal Counsel Ivanna A. Ursino, Paralegal Mercedes Cordido-Freytes de Kurowski, Legal Counsel Jessica Velasco Villegas, Paralegal Aïssatou Diop, Legal Counsel Alix Ahimon, Program Assistant Geraldine Fischer, Legal Counsel Cindy Ayento, Administrative Assistant to Secretary-General Anneliese Fleckenstein, Legal Counsel Claudio Batista, Program Assistant Benjamin Garel, Legal Counsel Paula Carazo, Program Assistant Lindsay Gastrell, Legal Counsel Cinthya Ibáñez, Program Assistant Ann Catherine Kettlewell, Legal Counsel Lanny Isimbi, Program Assistant Paul-Jean Le Cannu, Legal Counsel Miriam A. Peguero Medrano, Program Assistant Alicia Martín Blanco, Legal Counsel Laura Amelia Pettinelli, Program Assistant Marco Tulio Montañés-Rumayor, Legal Counsel Frauke Nitschke, Legal Counsel Natalí Sequeira, Legal Counsel Monty Taylor, Legal Counsel Luisa Torres, Legal Counsel Mairée Uran Bidegain, Legal Counsel Otylia Babiak, Legal Consultant Tatu Ilunga, Legal Consultant Ruqiya B.H. Musa, Legal Consultant Marisa Planells-Valero, Legal Consultant Donna Robinson, Legal Consultant—Institutional Matters FINANCIAL AND GENERAL ADMINISTRATION STAFF Javier Castro, Team Leader/Sr. Program Officer Zelalem T. Dagnaw, Financial Officer Rita A. Rovira, Records Officer, Information Management Lamiss Al-Tashi, Hearings Organizer Azeb Debebe Mengistu, Sr. Financial Assistant Walter Meza-Cuadra, Sr. Financial Assistant Members of the ICSID Secretariat, Washington D.C., May 16, 2014, Deborah W. Campos, World Bank Sherri Akanni, Program Assistant Paul Herrera, Information Technology Assistant Dante Herrera, Records Assistant Diana Magalona, Receptionist 2 | ICSID ANNUAL REPORT 2014 | 3 CHAPTER 1 INTRODUCTION The Convention on the Settlement of Investment Disputes between States and Nationals of Other States was opened for signature on March 18, 1965 and came into force on October 14, 1966. By this treaty, Member States established the International Centre for Settlement of Investment Disputes (ICSID or the Centre) as the first dispute resolution facility focused on providing procedural rules, physical facilities, and logistical support for resolution of international investment disputes. Since 1966, ICSID has established itself as the premier facility for the resolution of such disputes between States and foreign investors, and it maintains this distinction today. The Centre’s activities in fiscal year 2014 are presented in detail in this report. They demonstrate why the Centre is still considered the lead international institution in this field. ICSID benefits from a broad and diverse membership, representing States from all legal traditions. In the past year ICSID welcomed Canada as the 150th Member State, and the Republic of San Marino as the 159th signatory State to the ICSID Convention. Similarly, ICSID has encouraged the development of a larger and more diverse group of case decision-makers, who reflect the diversity of ICSID’s membership. It has adopted practices to propose arbitrators and conciliators from all States and of both genders, and has made progress in reaching this objective. Likewise, Member States have contributed to this objective by designating 82 new persons to the Panels of Arbitrators and of Conciliators in the past year. The number of cases registered in fiscal year 2014 remained steady, with 40 new ICSID cases and 8 new cases for administration under the UNCITRAL Arbitration Rules. Over the year, the Centre administered 209 cases, the most cases ever administered in a single fiscal year. This growth has Inside ICSID’s new offices, Washington, D.C., Scholastica Nguyen, Patricia Hord Graphik Design put a premium on addressing efficiency in case administration, while maintaining due process and a level playing field for disputing parties using ICSID facilities. We have met these challenges with technological solutions, procedural innovation, and ambitious service standards. These efforts have resulted in measurable efficiency gains in the past year. For example, the Centre recorded the lowest average period of time to register new cases (21 days), and witnessed the highest number of arbitrator appointments ever recorded in a fiscal year (93 individuals). While these results are encouraging, we continue to look for ways to make dispute resolution increasingly timely and cost effective. In addition to the administration of proceedings, ICSID has a mandate to disseminate knowledge within its area of expertise and to inform discussions about the future directions of international investment dispute settlement. The experience gained from ICSID’s docket of cases has allowed the 4 | ICSID ANNUAL REPORT 2014 | 5 CHAPTER 2 MEMBERSHIP Centre to develop an unparalleled expertise and focus, which benefits disputing parties, decision- makers and Member States. In fiscal year 2014, ICSID expanded the amount and breadth of its outreach. The ICSID Review-Foreign Investment Law Journal has grown to three issues per year, ICSID is an intergovernmental organization established by the Convention on the Settlement of subscriptions have increased, and the journal is now offered online as well as in hard copy volumes. Investment Disputes between States and Nationals of Other States. ICSID has supplemented its technical assistance and presented its introduction to ICSID procedure in Africa, Asia and Latin America in the past year. ICSID staff gave numerous presentations on As of June 30, 2014, there were 159 signatory States to the ICSID Convention. Of these, 150 various aspects of our work, including mediation of investment disputes, preparation for an States were ICSID Contracting States by virtue of their having deposited instruments of ratification, arbitration, and recognition and enforcement of awards. acceptance or approval of the ICSID Convention with the World Bank, which is the depositary of the ICSID Convention. As ICSID approaches the 50 year anniversary of the entry into force of the Convention, all indications are that the demands on the Centre’s services and its intellectual leadership will continue. While the On November 1, 2013, Canada deposited its instrument of ratification of the Convention and the half-century anniversary is certainly a time to look back and celebrate achievements, it is also the Convention entered into force for Canada on December 1, 2013. time to look forward and ensure that we are prepared to meet the challenges of the next 50 years. We are planning a variety of events and initiatives that both celebrate the past and anticipate the On April 11, 2014, the Convention was signed on behalf of the Republic of San Marino by future, and we look forward to commencing these in the upcoming fiscal year. H.E. Marco Arzilli, Minister of Industry Handicraft Trade Transport and Research. Finally, I wish to thank ICSID Member States and facility users for their continued confidence in the Centre. I also wish to thank each member of the ICSID Secretariat: they bring unparalleled expertise, commitment, and collegiality to the task every day and they are responsible for the success of the Centre to date. It remains my unique privilege to work with the ICSID Secretariat staff and to serve as Secretary-General of ICSID. I am confident that ICSID will continue to offer its members and users world class facilities, service, and the intellectual leadership that they have grown to expect. We are committed to excellence in fulfilling the important mandate of ICSID, and look forward to further progress in the next years. Meg Kinnear Secretary-General Meg Kinnear, ICSID Secretary-General, and H.E. Marco Arzilli, Minister of Industry Handicraft Trade Transport and Research of San Marino, at the signing of the ICSID Convention, Washington, D.C., April 11, 2014, Benjamin Garel, World Bank 6 | ICSID ANNUAL REPORT 2014 | 7 IBRD 39525 JUNE 2014 LIST OF CONTRACTING STATES AND OTHER SIGNATORIES OF CONTRACTING STATES TO THE ICSID CONVENTION THE CONVENTION SIGNATORY STATES TO THE ICSID CONVENTION as of June 30, 2014 The 159 States listed below have signed the Convention on the Settlement of Investment Disputes between States and Nationals of Other States on the dates indicated. The names of the 150 States that have deposited their instruments of ratification are in bold, and the dates of such deposit and of the attainment of the status of Contracting State by the entry into force of the Convention for each of them are also indicated. Deposit of Entry into Force State Signature Ratification of Convention Afghanistan Sep. 30, 1966 June 25, 1968 July 25, 1968 Albania Oct. 15, 1991 Oct. 15, 1991 Nov. 14, 1991 Algeria Apr. 17, 1995 Feb. 21, 1996 Mar. 22, 1996 Argentina May 21, 1991 Oct. 19, 1994 Nov. 18, 1994 Armenia Sep. 16, 1992 Sep. 16, 1992 Oct. 16, 1992 Australia Mar. 24, 1975 May 2, 1991 June 1, 1991 Austria May 17, 1966 May 25, 1971 June 24, 1971 Azerbaijan Sep. 18, 1992 Sep. 18, 1992 Oct. 18, 1992 Bahamas, The Oct. 19, 1995 Oct. 19, 1995 Nov. 18, 1995 Bahrain Sep. 22, 1995 Feb. 14, 1996 Mar. 15, 1996 Bangladesh Nov. 20, 1979 Mar. 27, 1980 Apr. 26, 1980 Barbados May 13, 1981 Nov. 1, 1983 Dec. 1, 1983 Belarus July 10, 1992 July 10, 1992 Aug. 9, 1992 Belgium Dec. 15, 1965 Aug. 27, 1970 Sep. 26, 1970 Belize Dec. 19, 1986 Benin Sep. 10, 1965 Sep. 6, 1966 Oct. 14, 1966 Bosnia and Herzegovina Apr. 25, 1997 May 14, 1997 June 13, 1997 Botswana Jan. 15, 1970 Jan. 15, 1970 Feb. 14, 1970 This map was produced by the Map Design Unit of The World Bank. Brunei Darussalam Sep. 16, 2002 Sep. 16, 2002 Oct. 16, 2002 The boundaries, colors, denominations and any other information shown on this map do not imply, on the part of The World Bank Group, any judgment on the legal status of any territory, or any Bulgaria Mar. 21, 2000 Apr. 13, 2001 May 13, 2001 Burkina Faso Sep. 16, 1965 Aug. 29, 1966 Oct. 14, 1966 endorsement or acceptance of such boundaries. Burundi Feb. 17, 1967 Nov. 5, 1969 Dec. 5, 1969 Cabo Verde Dec. 20, 2010 Dec. 27, 2010 Jan. 26, 2011 Cambodia Nov. 5, 1993 Dec. 20, 2004 Jan. 19, 2005 Cameroon Sep. 23, 1965 Jan. 3, 1967 Feb. 2, 1967 Canada Dec. 15, 2006 Nov. 1, 2013 Dec. 1, 2013 8 | ICSID ANNUAL REPORT 2014 | 9 Deposit of Entry into Force Deposit of Entry into Force State Signature Ratification of Convention State Signature Ratification of Convention Central African Republic Aug. 26, 1965 Feb. 23, 1966 Oct. 14, 1966 Honduras May 28, 1986 Feb. 14, 1989 Mar. 16, 1989 Chad May 12, 1966 Aug. 29, 1966 Oct. 14, 1966 Hungary Oct. 1, 1986 Feb. 4, 1987 Mar. 6, 1987 Chile Jan. 25, 1991 Sep. 24, 1991 Oct. 24, 1991 Iceland July 25, 1966 July 25, 1966 Oct. 14, 1966 China Feb. 9, 1990 Jan. 7, 1993 Feb. 6, 1993 Indonesia Feb. 16, 1968 Sep. 28, 1968 Oct. 28, 1968 Colombia May 18, 1993 July 15, 1997 Aug. 14, 1997 Ireland Aug. 30, 1966 Apr. 7, 1981 May 7, 1981 Comoros Sep. 26, 1978 Nov. 7, 1978 Dec. 7, 1978 Israel June 16, 1980 June 22, 1983 July 22, 1983 Congo, Democratic Rep. of Oct. 29, 1968 Apr. 29, 1970 May 29, 1970 Italy Nov. 18, 1965 Mar. 29, 1971 Apr. 28, 1971 Congo, Rep. of Dec. 27, 1965 June 23, 1966 Oct. 14, 1966 Jamaica June 23, 1965 Sep. 9, 1966 Oct. 14, 1966 Costa Rica Sep. 29, 1981 Apr. 27, 1993 May 27, 1993 Japan Sep. 23, 1965 Aug. 17, 1967 Sep. 16, 1967 Côte d’Ivoire June 30, 1965 Feb. 16, 1966 Oct. 14, 1966 Jordan July 14, 1972 Oct. 30, 1972 Nov. 29, 1972 Croatia June 16, 1997 Sep. 22, 1998 Oct. 22, 1998 Kazakhstan July 23, 1992 Sep. 21, 2000 Oct. 21, 2000 Cyprus Mar. 9, 1966 Nov. 25, 1966 Dec. 25, 1966 Kenya May 24, 1966 Jan. 3, 1967 Feb. 2, 1967 Czech Republic Mar. 23, 1993 Mar. 23, 1993 Apr. 22, 1993 Korea, Rep. of Apr. 18, 1966 Feb. 21, 1967 Mar. 23, 1967 Denmark Oct. 11, 1965 Apr. 24, 1968 May 24, 1968 Kosovo, Rep. of June 29, 2009 June 29, 2009 July 29, 2009 Dominican Republic Mar. 20, 2000 Kuwait Feb. 9, 1978 Feb. 2, 1979 Mar. 4, 1979 Egypt, Arab Rep. of Feb. 11, 1972 May 3, 1972 June 2, 1972 Kyrgyz Republic June 9, 1995 El Salvador June 9, 1982 Mar. 6, 1984 Apr. 5, 1984 Latvia Aug. 8, 1997 Aug. 8, 1997 Sep. 7, 1997 Estonia June 23, 1992 June 23, 1992 July 23, 1992 Lebanon Mar. 26, 2003 Mar. 26, 2003 Apr. 25, 2003 Ethiopia Sep. 21, 1965 Lesotho Sep. 19, 1968 July 8, 1969 Aug. 7, 1969 Fiji July 1, 1977 Aug. 11, 1977 Sep. 10, 1977 Liberia Sep. 3, 1965 June 16, 1970 July 16, 1970 Finland July 14, 1967 Jan. 9, 1969 Feb. 8, 1969 Lithuania July 6, 1992 July 6, 1992 Aug. 5, 1992 France Dec. 22, 1965 Aug. 21, 1967 Sep. 20, 1967 Luxembourg Sep. 28, 1965 July 30, 1970 Aug. 29, 1970 Gabon Sep. 21, 1965 Apr. 4, 1966 Oct. 14, 1966 Macedonia, former Yugoslav Rep. of Sep. 16, 1998 Oct. 27, 1998 Nov. 26, 1998 Gambia, The Oct. 1, 1974 Dec. 27, 1974 Jan. 26, 1975 Madagascar June 1, 1966 Sep. 6, 1966 Oct. 14, 1966 Georgia Aug. 7, 1992 Aug. 7, 1992 Sep. 6, 1992 Malawi June 9, 1966 Aug. 23, 1966 Oct. 14, 1966 Germany Jan. 27, 1966 Apr. 18, 1969 May 18, 1969 Malaysia Oct. 22, 1965 Aug. 8, 1966 Oct. 14, 1966 Ghana Nov. 26, 1965 July 13, 1966 Oct. 14, 1966 Mali Apr. 9, 1976 Jan. 3, 1978 Feb. 2, 1978 Greece Mar. 16, 1966 Apr. 21, 1969 May 21, 1969 Malta Apr. 24, 2002 Nov. 3, 2003 Dec. 3, 2003 Grenada May 24, 1991 May 24, 1991 June 23, 1991 Mauritania July 30, 1965 Jan. 11, 1966 Oct. 14, 1966 Guatemala Nov. 9, 1995 Jan. 21, 2003 Feb. 20, 2003 Mauritius June 2, 1969 June 2, 1969 July 2, 1969 Guinea Aug. 27, 1968 Nov. 4, 1968 Dec. 4, 1968 Micronesia, Federated States of June 24, 1993 June 24, 1993 July 24, 1993 Guinea-Bissau Sep. 4, 1991 Moldova Aug. 12, 1992 May 5, 2011 June 4, 2011 Guyana July 3, 1969 July 11, 1969 Aug. 10, 1969 Mongolia June 14, 1991 June 14, 1991 July 14, 1991 Haiti Jan. 30, 1985 Oct. 27, 2009 Nov. 26, 2009 Montenegro July 19, 2012 April 10, 2013 May 10, 2013 10 | ICSID ANNUAL REPORT 2014 | 11 Deposit of Entry into Force Deposit of Entry into Force State Signature Ratification of Convention State Signature Ratification of Convention Morocco Oct. 11, 1965 May 11, 1967 June 10, 1967 Solomon Islands Nov. 12, 1979 Sep. 8, 1981 Oct. 8, 1981 Mozambique Apr. 4, 1995 June 7, 1995 July 7, 1995 Somalia Sep. 27, 1965 Feb. 29, 1968 Mar. 30, 1968 Namibia Oct. 26, 1998 South Sudan Apr. 18, 2012 Apr. 18, 2012 May 18, 2012 Nepal Sep. 28, 1965 Jan. 7, 1969 Feb. 6, 1969 Spain Mar. 21, 1994 Aug. 18, 1994 Sept. 17, 1994 Netherlands May 25, 1966 Sep. 14, 1966 Oct. 14, 1966 Sri Lanka Aug. 30, 1967 Oct. 12, 1967 Nov. 11, 1967 New Zealand Sep. 2, 1970 Apr. 2, 1980 May 2, 1980 St. Kitts & Nevis Oct. 14, 1994 Aug. 4, 1995 Sep. 3, 1995 Nicaragua Feb. 4, 1994 Mar. 20, 1995 Apr. 19, 1995 St. Lucia June 4, 1984 June 4, 1984 July 4, 1984 Niger Aug. 23, 1965 Nov. 14, 1966 Dec. 14, 1966 St. Vincent and the Grenadines Aug. 7, 2001 Dec. 16, 2002 Jan. 15, 2003 Nigeria July 13, 1965 Aug. 23, 1965 Oct. 14, 1966 Sudan Mar. 15, 1967 Apr. 9, 1973 May 9, 1973 Norway June 24, 1966 Aug. 16, 1967 Sep. 15, 1967 Swaziland Nov. 3, 1970 June 14, 1971 July 14, 1971 Oman May 5, 1995 July 24, 1995 Aug. 23, 1995 Sweden Sep. 25, 1965 Dec. 29, 1966 Jan. 28, 1967 Pakistan July 6, 1965 Sep. 15, 1966 Oct. 15, 1966 Switzerland Sep. 22, 1967 May 15, 1968 June 14, 1968 Panama Nov. 22, 1995 Apr. 8, 1996 May 8, 1996 Syria May 25, 2005 Jan. 25, 2006 Feb. 24, 2006 Papua New Guinea Oct. 20, 1978 Oct. 20, 1978 Nov. 19, 1978 Tanzania Jan. 10, 1992 May 18, 1992 June 17, 1992 Paraguay July 27, 1981 Jan. 7, 1983 Feb. 6, 1983 Thailand Dec. 6, 1985 Peru Sep. 4, 1991 Aug. 9, 1993 Sep. 8, 1993 Timor-Leste July 23, 2002 July 23, 2002 Aug. 22, 2002 Philippines Sep. 26, 1978 Nov. 17, 1978 Dec. 17, 1978 Togo Jan. 24, 1966 Aug. 11, 1967 Sep. 10, 1967 Portugal Aug. 4, 1983 July 2, 1984 Aug. 1, 1984 Tonga May 1, 1989 Mar. 21, 1990 Apr. 20, 1990 Qatar Sep. 30, 2010 Dec. 21, 2010 Jan. 20, 2011 Trinidad and Tobago Oct. 5, 1966 Jan. 3, 1967 Feb. 2, 1967 Romania Sep. 6, 1974 Sep. 12, 1975 Oct. 12, 1975 Tunisia May 5, 1965 June 22, 1966 Oct. 14, 1966 Russian Federation June 16, 1992 Turkey June 24, 1987 Mar. 3, 1989 Apr. 2, 1989 Rwanda Apr. 21, 1978 Oct. 15, 1979 Nov. 14, 1979 Turkmenistan Sep. 26, 1992 Sep. 26, 1992 Oct. 26, 1992 Samoa Feb. 3, 1978 Apr. 25, 1978 May 25, 1978 Uganda June 7, 1966 June 7, 1966 Oct. 14, 1966 San Marino Apr. 11, 2014 Ukraine Apr. 3, 1998 June 7, 2000 July 7, 2000 Sao Tome and Principe Oct. 1, 1999 May 20, 2013 June 19, 2013 United Arab Emirates Dec. 23, 1981 Dec. 23, 1981 Jan. 22, 1982 Saudi Arabia Sep. 28, 1979 May 8, 1980 June 7, 1980 United Kingdom of Great Britain Senegal Sep. 26, 1966 Apr. 21, 1967 May 21, 1967 and Northern Ireland May 26, 1965 Dec. 19, 1966 Jan. 18, 1967 Serbia May 9, 2007 May 9, 2007 June 8, 2007 United States of America Aug. 27, 1965 June 10, 1966 Oct. 14, 1966 Seychelles Feb. 16, 1978 Mar. 20, 1978 Apr. 19, 1978 Uruguay May 28, 1992 Aug. 9, 2000 Sep. 8, 2000 Sierra Leone Sep. 27, 1965 Aug. 2, 1966 Oct. 14, 1966 Uzbekistan Mar. 17, 1994 July 26, 1995 Aug. 25, 1995 Singapore Feb. 2, 1968 Oct. 14, 1968 Nov. 13, 1968 Yemen, Republic of Oct. 28, 1997 Oct. 21, 2004 Nov. 20, 2004 Slovak Republic Sep. 27, 1993 May 27, 1994 June 26, 1994 Zambia June 17, 1970 June 17, 1970 July 17, 1970 Slovenia Mar. 7, 1994 Mar. 7, 1994 Apr. 6, 1994 Zimbabwe Mar. 25, 1991 May 20, 1994 June 19, 1994 12 | ICSID ANNUAL REPORT 2014 | 13 CHAPTER 3 PANELS OF ARBITRATORS AND OF CONCILIATORS The ICSID Convention requires the Centre to maintain a Panel of Arbitrators and a Panel of Conciliators. According to Article 13 of the Convention, each Contracting State is entitled to designate up to four persons to each Panel. The designees may be nationals or non-nationals of the designating State and are nominated to the Panels for a renewable term of six years. In addition, up to ten persons may be designated to each Panel by the Chairman of the ICSID Administrative Council. The complete list of members of the Panels of Arbitrators and of Conciliators is available on the ICSID website. The Panels are an important component of the ICSID system of dispute settlement. When the Chairman of the Administrative Council is called upon to appoint arbitrators, conciliators or ad hoc Committee members under Articles 30, 38 or 52 of the ICSID Convention, these appointees are drawn from the Panels. With an increasing ICSID caseload, it has become ever more important for States to make designations to the ICSID Panels. To this end, the Centre continues to encourage States to name qualified candidates where nominations have expired or the Panels are otherwise incomplete. During FY2014, 15 ICSID Contracting States made designations to the ICSID Panels: Afghanistan, Bahrain, Democratic Republic of the Congo, the Czech Republic, Georgia, Germany, Greece, Hungary, Latvia, Saudi Arabia, Singapore, Slovak Republic, Sweden, Timor-Leste, and Zimbabwe. In all, 82 persons were designated or re-designated to the Panels. At the end of FY2014, there were 590 individuals on the ICSID Panels of Arbitrators and of Conciliators. Prof. Piero Bernardini, Tribunal member, and ICSID Counsel Natalí Sequeira at a hearing for Mobil Exploration and The names of designees to the ICSID Panels made in FY2014 are provided on the following page. Development Inc. Suc. Argentina and Mobil Argentina S.A. v. Argentine Republic, Washington, D.C., May 3, 2014, Benjamin Garel, World Bank Elba Gutierrez, Argentina Irradiacion 14 | ICSID ANNUAL REPORT 2014 | 15 Afghanistan Georgia Panel of Conciliators Panel of Conciliators Panels of Arbitrators and of Conciliators Panels of Arbitrators and of Conciliators Designations effective January 27, 2014: Designations effective December 1, 2013: Designations effective February 11, 2014: Designation effective November 28, 2013: Ioannis C. Dryllerakis, Harry Kyriazis, Michael S. Jayakumar, Tommy Koh, George Lim, Abdul Sulaiman Ghafoori, Phillip James Walker Paul Friedland Marinos, Ioannis Vassardanis Chelva Rajah Panel of Arbitrators Panel of Arbitrators Hungary Slovak Republic Designations effective February 11, 2014: Designation effective November 28, 2013: Panel of Arbitrators Panel of Arbitrators Abdullah Dowrani, Abdurrahman Mujahid Brigitte Stern Designations effective May 5, 2014: Designations effective July 15, 2013: Péter Györfi-Tóth, Jean Engelmayer Kalicki, Mark A. Clodfelter, Václav Mikulka, Peter Tomka Panel of Conciliators Panel of Arbitrators János Martonyi, István Varga Designations effective February 11, 2014: Designation effective February 4, 2014: Sweden Nazir Kabiri, Mohamed Khalid Payenda Rolf Knieper Panel of Conciliators Panel of Arbitrators Designations effective May 5, 2014: Designations effective November 15, 2013: Bahrain Panel of Conciliators János Burai-Kovács, Kolos Kardkovács, Miklós Kaj Hobér, Lena Frånstedt Lofalk, Bo G. H. Panel of Conciliators Designation effective November 28, 2013: Király, Attila Menyhárd Nilsson, Christer Söderlund Designations effective July 8, 2013: Thomas H. Lee Khalid Hamad Abdulrahman, Huda Hussain Latvia Panel of Conciliators Al Maskati, Yusuf Humood, Aref Saleh Khamis Germany Panel of Arbitrators Designations effective November 15, 2013: Panel of Arbitrators Designations effective January 24, 2014: Lars Edlund, Christina Ramberg, Eric M. Democratic Republic of Designations effective September 5, 2013: Andis Auza, Inga Kačevska, Eva Kalniņa, Runesson, Claes Zettermarck the Congo Karl-Heinz Böckstiegel, Inka Hanefeld, Mārtiņš Paparinskis Panel of Arbitrators Sabine Konrad, Klaus Sachs Timor-Leste Designation effective September 25, 2013: Panel of Conciliators Panels of Arbitrators and of Conciliators Mwilanya Wilondja Panel of Conciliators Designation effective January 24, 2014: Designations effective August 22, 2013: Designation effective September 5, 2013: Ziedonis Ūdris Pierre Richard Prosper, Yu-Jin Tay Panel of Conciliators Patricia Nacimiento Designations effective September 25, 2013: Saudi Arabia Zimbabwe Kolongele Eberande, Luaba Nkuna Panel of Conciliators Panels of Arbitrators and of Conciliators Panel of Arbitrators Designations effective December 14, 2013: Designations effective July 8, 2013: Designations effective October 28, 2013: Czech Republic Anke Meier, Stephan Schill, Sebastian Abdulrahman Ibrahim Alhumaid, Yahya A. S. J. Chihambakwe, M. S. Gwaunza, V. Mudimu, Panel of Arbitrators Seelmann-Eggebert Alyahya, Ziad Bin Abdulrahman Al-Sudairy, L. Uriri Designations effective December 14, 2013: Sherif Omar Hassan Vladimír Balaš, Daniela Christina Devereaux, Greece Panel of Conciliators Alexandr Mareš Panel of Arbitrators Singapore Designations effective October 28, 2013: Designations effective January 27, 2014: Panel of Arbitrators T. Bere, C. Dube, P. Dube, M. Matshiya Antonias C. Dimolitsa, Loukas Mistelis, Designations effective December 1, 2013: Evanghelos Perakis, Michael Stathopoulos Lawrence Boo, Cavinder Bull, Sek Keong Chan, Sundaresh Menon 16 | ICSID ANNUAL REPORT 2014 | 17 Tribunal members Brigitte Stern, V.V. Veeder, and Gabrielle Kaufmann-Kohler, ICSID Counsel Aurélia Antonietti, and Party Representatives, at a hearing in Electrabel S.A. v. Hungary, Washington, D.C., May 15, 2014, Benjamin Garel, World Bank While the majority of cases before the Centre are arbitrations administered under the ICSID CHAPTER 4 Convention, there has also been an increase in the use of ICSID conciliation services in recent years. OPERATIONS OF THE CENTRE Other Cases Summary of ICSID Operations The ICSID Secretariat also administers international dispute settlement proceedings under rules ICSID is an intergovernmental organization established by the Convention on the Settlement of other than those available under the ICSID Convention or the ICSID Additional Facility. In particular, Investment Disputes between States and Nationals of Other States (the ICSID Convention). Its primary the Secretariat often assists parties and tribunals with investment arbitrations conducted pursuant purpose is to provide facilities and services to support resolution of international investment disputes. to the UNCITRAL Arbitration Rules. It also provides such assistance in cases conducted under free It administers cases under the ICSID Convention, the ICSID Additional Facility, and other rules such trade agreements. as the Arbitration Rules of the United Nations Commission on International Trade Law (UNCITRAL The services provided in non-ICSID proceedings are similar to those available under the ICSID Arbitration Rules), as requested by the parties. It also offers a full range of related services in support Rules, ranging from handling specific aspects of a case to offering full administrative services. of dispute resolution, including acting as appointing authority, naming consolidation tribunals under In the past fiscal year, the Centre was asked to act as appointing authority in six instances, and certain treaties, and deciding party challenges of arbitrators or conciliators. administered eight investor-State arbitrations under the UNCITRAL Rules, doubling the number of non-ICSID cases administered compared to the previous fiscal year. ICSID Cases The initiation and conduct of cases under the Centre’s auspices are often governed by one of Overview of ICSID Arbitration ICSID’s two sets of procedural rules. These are the ICSID Convention, Regulations and Rules, and ICSID Convention arbitration is initiated by the submission of a Request for Arbitration to the the ICSID Additional Facility Rules. Secretary-General, which outlines the basic facts and legal issues to be addressed. The Request Conciliation and arbitration under the ICSID Convention involves a legal dispute between an ICSID must be registered unless the dispute is manifestly outside the jurisdiction of ICSID. In the past year, Contracting State and a national of another ICSID Contracting State. Such disputes arise out of an Requests for Arbitration were processed within 21 days of being filed at ICSID. investment and the disputing parties must have consented in writing to submit their dispute to ICSID. The next procedural step is constitution of the arbitral tribunal. The ICSID Arbitration Rules offer The ICSID Additional Facility Rules allow the ICSID Secretariat to administer conciliation and the disputing parties significant flexibility regarding the number of arbitrators and the method of arbitration of investment disputes where either the State party or the home State of the foreign their appointment. In most instances, tribunals consist of three arbitrators: one arbitrator appointed investor is not an ICSID Contracting State. They also authorize conciliation and arbitration of by each party, and the third, presiding, arbitrator appointed by agreement of the parties or of disputes that do not arise directly out of an investment where at least one of the disputing parties the party-appointed arbitrators. The parties may ask the Centre to assist with the appointment of is a Contracting State or a national of a Contracting State. arbitrators, either in accordance with a previous agreement or pursuant to the default provisions in 18 | ICSID ANNUAL REPORT 2014 | 19 the ICSID Rules. In FY2014, ICSID completed consultations with parties and finalized appointments Arbitration under the ICSID Additional Facility is similar in process to ICSID Convention arbitration on average within 51 days of receiving the request to appoint. with some notable differences. In particular, parties must obtain approval of access to the Additional Facility prior to instituting proceedings, and post-award remedies under the Additional Facility Proceedings are deemed to have begun once the tribunal is constituted. The tribunal holds a Rules are limited to interpretation, correction, and supplementary decision by the original tribunal. first session within 60 days of its constitution to deal with preliminary questions of procedure. The Other remedies may also be available under the applicable laws of the place of proceedings. subsequent proceeding usually comprises two distinct phases: a written procedure followed by in-person hearings. After the parties present their case, the tribunal deliberates and renders its award. New ICSID Cases Registered An ICSID Convention award is binding and not subject to any appeal or other remedy except those Forty new ICSID cases were registered in FY2014. All of the new cases registered were arbitrations: provided for by the Convention. The Convention allows the parties to request a supplementary 38 under the ICSID Convention and 2 under the Additional Facility Rules. decision or rectification of the award, or to seek the post-award remedies of annulment, interpretation or revision. New Cases Registered under the ICSID Convention and Additional Facility Rules in FY2014 Conduct of an ICSID Convention Arbitration 40 38 ICSID Convention Arbitration Cases 36 Request for Arbitration 32 Refusal to Register 28 Registration 24 Constitution of the Tribunal 20 16 First Session 12 8 Written Procedure 4 2 ICSID Additional Facility Arbitration Cases Oral Procedure 0 Deliberations Over the course of the fiscal year, the Centre administered a new record of 209 ICSID cases. This number exceeds the previous high mark by 14 cases, and represents 44% of the 473 ICSID cases Award ever administered by the Centre. Supplementary Decision and Rectification Post-Award Remedies: Annulment, Interpretation, Revision 20 | ICSID ANNUAL REPORT 2014 | 21 Of the new cases registered in FY2014, the majority (22 cases) asserted ICSID jurisdiction on the ICSID Cases Administered by the Secretariat (FY2003–FY2014) basis of a bilateral investment treaty (BIT). Ten cases were brought on the basis of the Energy Charter Treaty (ECT), which represents a significant increase over the previous fiscal year, during which only one case was registered on the basis of that treaty. Investors asserted the Centre’s 250 jurisdiction under investment contracts in eight further cases, and five cases relied on investment 209 200 laws. Three cases relied, respectively, on two bases for jurisdiction (an investment law and a BIT in one case; and a BIT and the ECT in the other two cases). One further case invoked three bases for 150 jurisdiction (a law, a BIT and a contract). 100 63 50 State Parties to ICSID Proceedings Registered in FY2014 State parties involved in ICSID disputes registered in FY2014 remained diverse. They included States 0 from every geographic region of the world. Notably, the Eastern Europe and Central Asia region had FY FY FY FY FY FY FY FY FY FY FY FY 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 the greatest number of newly registered ICSID cases (25%), followed by cases naming State parties located in Western Europe and Sub-Saharan Africa (20% each). The proportion of new cases involving State parties from South America has decreased from 26% in FY2013 to 7% in FY2014. Basis of Consent to ICSID Proceedings Arbitration and conciliation under the ICSID Convention and Additional Facility Rules are entirely Geographic Distribution of New Cases Registered in FY2014 under the ICSID Convention and Additional Facility Rules, by State Party Involved voluntary. The basis of the parties’ consent to ICSID jurisdiction can be found in a variety of sources, including investment laws, contracts concluded between a foreign investor and the host State of the investment, and bilateral or multilateral treaties. Western Europe North America (Cananda, Mexico & U.S.) 20% Basis of Consent Invoked to Establish ICSID Jurisdiction 25% Sub-Saharan Africa South America in New Cases Registered in FY2014 under the ICSID Convention and Additional Facility Rules 20% 15% South & East Asia & Middle East & North Africa the Pacific 7% 7% Central America & Eastern Europe & Bilateral Investment Treaty (BIT) 3% the Carribean Central Asia 11% 3% Investment Contract between 22% the Investor and the Host-State 49% Eight Eastern European and Central Asian States were named as respondent in ten cases. Eight Energy Charter Treaty (ECT) 18% cases were brought against three States in Western Europe. States from Sub-Saharan Africa were Investment Law of the Host-State involved in eight cases, and six cases were instituted against States in the Middle East and North Africa region. Three cases involved two States in South America, one of which was instituted by a State party against an investor. Three further cases were brought against three States in the Central America and Caribbean region. One case was brought against a State in North America, and one case was brought against a State in the South and East Asia and the Pacific region. 22 | ICSID ANNUAL REPORT 2014 | 23 Geographic Distribution of New Cases Registered in FY2014 Distribution of New Cases Registered in FY2014 under the ICSID under the ICSID Convention and Additional Facility Rules, Convention and Additional Facility Rules, by Economic Sector by State Party Involved — Further Details 5% Bosnia & 5% Herzegovnia, 1 Finance Water, Sanitation & Bulgaria, 1 Flood Protection 5% 17% Croatia, 1 Cameroon, 1 France, 1 Information & Construction 3% Communication Cyprus, 1 Italy, 1 35% Gambia, 2 Oil, Gas & Mining Other Industry 30% Hungary, 2 Madagascar, 1 Electric Power & Egypt, 4 Other Energy Montenegro, 1 Mali, 1 Spain, 6 Ukraine, 1 Nigeria, 1 Costa Rica, 1 Peru, 1 Sudan, 1 Jordan, 1 El Salvador, 1 Uzbekistan, 2 Venezuela, 2 Uganda, 1 Tunisia, 1 Panama, 1 Papua New Mexico, 1 Post-Award Remedy Applications Guinea, 1 In FY2014, the Centre registered twelve applications for post-award remedies under the ICSID Eastern Sub- Western Middle Central South South & North Convention, which included ten applications for annulment, one request for rectification and one Europe & Saharan Europe East & America America East Asia & America Central Asia Africa North & the the Pacific (Canada, request for resubmission of the dispute. Of the ten applications for annulment, five were brought Africa Caribbean Mexico by the Claimant/investor, and three were initiated by the State/Respondent in the underlying & U.S.) arbitration. In one case, both parties filed separate applications for annulment of the same award. Economic Sectors Involved in New Proceedings Number of Annulment Applications Registered by ICSID (FY2008–FY2014) The investment disputes commenced in FY2014 involved a variety of economic sectors. Based on World Bank industry sector codes, the oil, gas, and mining sector remained dominant, with 35% 12 of cases registered in FY2014. Thirty percent of the cases involved the electric power and other 11 10 energy sector, which represents a 25% increase over the previous fiscal year. Seventeen percent 10 9 8 8 8 8 of the cases involved a variety of industries, such as retail, textile manufacturing and voucher services. The construction industry, financial sector, and information and communication sectors 6 were represented in equal parts (5% each). The remaining case involved water, sanitation and flood 4 3 protection activities. 2 0 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 24 | ICSID ANNUAL REPORT 2014 | 25 To date, 420 ICSID Convention arbitrations have been registered at ICSID; only 6 awards have In FY2014, the pool of arbitrators, conciliators and ad hoc Committee members continued to expand. been annulled in full, and 7 have been annulled in part. This is consistent with the limited nature of Overall, 93 individuals from 36 different countries were appointed to serve as arbitrators, conciliators, annulment intended by the drafters of the ICSID Convention. or ad hoc Committee members in ICSID cases in FY2014. In terms of diversity, 22% of the new appointees were nationals of developing countries, and 11% of the new appointees were women. Annulment Proceedings under the ICSID Convention In a continuation of the upward trend from previous years, 76% of the appointments were made either by the parties or by the party-appointed arbitrators, while the other 24% were made by the Chairman of the Administrative Council. In total, the Centre acted as appointing authority 420 Convention Arbitrations Registered 36 times in FY2014 and appointed 27 individuals of 23 different nationalities. About 36% of the appointments by ICSID involved nationals of developing economies, and 8% involved women. 189 Convention Awards Rendered 73 Annulment Proceedings Instituted Arbitrators, Conciliators and ad hoc Committee Members Appointed in FY2014 in Cases Registered under the ICSID Convention and Additional 25 Decisions Refusing Facility Rules — Distribution of Appointments by ICSID and by the Parties Annulment (or Party-appointed Arbitrators), by Geographic Region 15 Proceedings Discontinued 60 56 13 Awards Annulled 50 (6 in full + 7 in part) 40 30 24 20 18 15 11 10 6 3 2 3 0 1 3 2 1 1 2 0 North South Central Middle Sub-Saharan South & Eastern Western In the course of the fiscal year, one interpretation proceeding concerning an award rendered under America America America East & Africa East Asia Europe & Europe the Additional Facility Rules was also initiated. (Canada, & the North & the Central Mexico Caribbean Africa Pacific Asia & U.S.) Constitution of Tribunals and ad hoc Committees in ICSID Cases Appointments by ICSID Appointments by the Parties (or Party-appointed Arbitrators) In the course of the fiscal year, 45 tribunals and 7 ad hoc Committees were constituted or reconstituted in proceedings before the Centre. A total of 148 individual appointments were made by the parties and by ICSID. This is the greatest number of appointments made in a single fiscal year. 26 | ICSID ANNUAL REPORT 2014 | 27 State of Nationality of Arbitrators, Conciliators and ad hoc Committee Members Appointed in FY2014 in Cases Registered under the ICSID Convention and Additional Facility Rules Challenges to Arbitrators, Counsel and Experts Argentina/Spain 1 During the fiscal year, parties to ICSID proceedings proposed the disqualification of 19 arbitrators. Argentina/United States of America 1 Twelve of these proposals were declined, three proposals were upheld, three arbitrators resigned Bangladesh 1 following the filing of the proposal, and one of these challenges is currently pending. One proposed United Kingdom/Ghana 1 Canada/Lebanon 1 disqualification of an arbitrator filed in FY2013 was withdrawn in FY2014. Chile/United States of America 1 Costa Rica 1 In one case a tribunal decided a disqualification proposal concerning the other party’s counsel. In Netherlands 1 Iran, Islamic Rep. of/France 1 another case, a party filed a proposal for the disqualification of the other party’s expert. Italy 1 Korea, Rep.of 1 France/Lebanon 1 Cases concluded in FY2014 Malaysia 1 Thirty-three proceedings were concluded during the fiscal year, 25 of which were arbitrations. Six Morocco 1 annulment proceedings, one rectification proceeding, and one proceeding for a supplementary Nigeria 1 decision regarding an annulment decision were also concluded during the fiscal year. Slovak Republic 1 State of Nationality of Appointee Somalia 1 Sweden 1 In the 25 concluded arbitration proceedings, 21 disputes were decided by a tribunal, and 4 cases Switzerland/Ireland 1 were discontinued or settled. Bulgaria 2 China 2 France/Sweden/Bahrain 2 Guatemala 2 Arbitration Proceedings under the ICSID Convention and New Zealand 2 Additional Facility Rules Concluded in FY2014 — Outcomes Belgium 3 Chile 3 Singapore 3 Switzerland/Brazil 3 Austria 3 United Kingdom/France 4 16% Colombia 4 Dispute decided by Tribunal Mexico 4 United States of America/Switzerland 4 Dispute settled or proceeding otherwise Argentina 4 84% discontinued Canada 5 Germany 5 Switzerland 6 Australia 7 Spain 11 United Kingdom 12 United States of America 14 France 24 Of the 21 cases decided by a tribunal, 10 awards declined jurisdiction, 5 tribunals rejected all of the investors’ claims, and 6 upheld the investors’ claims in part or in full. 0 5 10 15 20 25 Number of Appointments 28 | ICSID ANNUAL REPORT 2014 | 29 respecting the due process rights of the parties. These include: (i) requiring arbitrators to submit Disputes Decided by Arbitral Tribunals under the ICSID Convention and Additional Facility Rules in FY2014 — Findings calendars indicating their long-term availability when accepting their appointment, (ii) updating parties on a regular basis concerning the costs expended to date, (iii) encouraging tribunal members to establish a budget at the outset of a case outlining anticipated arbitrator fees and expenses, (iv) encouraging tribunal consultations immediately prior to hearings and deliberations Award dismissing all claims immediately after hearings, and (v) requiring tribunals to report to the parties on the timing of 24% outstanding decisions or awards. 48% Award upholding claims in part or in full Six annulment proceedings were also concluded in FY2014. In five cases, the ad hoc Committee 28% Award declining jurisdiction rejected the application for annulment of the award. One annulment proceeding was discontinued for lack of payment of the required funds. Awards Rendered and Outcomes in Annulment Proceedings under Of the four arbitration cases that were discontinued or settled, two were discontinued following the ICSID Convention, by Decade a joint request by the parties, one was discontinued at the request of one party (which the other party did not oppose), and in one further case, the parties’ settlement agreement was embodied 100 96 in an award. 90 80 Disputes Settled or Proceedings Otherwise Discontinued under the 70 ICSID Convention and Additional Facility Rules in FY2014 — Basis 62 60 50 40 Settlement agreement embodied in 30 25% an award at parties’ request 20 18 50% Proceeding discontinued at the request 13 11 of one party 10 9 8 9 4 5 25% 0 0 0 1 3 0 0 1 1 1 Proceeding discontinued at the request 0 of both parties 1971–1980 1981–1990 1991–2000 2001–2010 2011– Number of Convention awards Number of decisions annulling the award rendered in part or in full Number of decisions rejecting the Number of annulment proceedings The majority of arbitration proceedings concluded in FY2014 lasted on average just over three and application for annulment discontinued a half years from the date of the tribunal’s constitution. During the fiscal year, the Centre continued to implement its various practices adopted in an effort to reduce the duration of arbitrations while 30 | ICSID ANNUAL REPORT 2014 | 31 Matters of Procedure in ICSID Cases in FY2014 Comprehensive and up-to-date information about the procedural steps taken in each case, Of the 209 ICSID cases administered in FY2014, 101 were conducted in English, 13 in French the composition of the tribunal, commission, or ad hoc Committee, the party appointing each and 22 in Spanish, which are the three official languages of the Centre. Seventy-two proceedings arbitrator, counsel representing the parties, and the outcome of proceedings can be found on the were conducted simultaneously in two official languages, with the English-Spanish combination ICSID website at www.worldbank.org/icsid. continuing to be the most frequent. One further case was administered in all three official languages. Institutional Matters Cases Administered in FY2014 under the ICSID Convention and Additional Facility Rules, by Procedural Language(s) ICSID worked on numerous institutional projects in FY2014. These included providing support to the ICSID Administrative Council, expansion of the Centre’s network of institutional cooperation agreements, and collaboration with other international and non-governmental organizations on 120 101 matters related to investment law and dispute resolution. ICSID also continued enhancing its 100 information technology and working practices to ensure that facility users are offered the most 80 efficient and cost-effective services. 63 60 40 ICSID Administrative Council 22 The Administrative Council is the governing body of ICSID. Pursuant to Article 4 of the ICSID 20 13 8 1 1 Convention, the Administrative Council is composed of one representative of each Contracting 0 English English & Spanish French English & French & English, State. The World Bank governor appointed by a Member State usually sits as its representative on Spanish French Spanish French & Spanish the ICSID Administrative Council, unless the State makes a different designation. The President of the World Bank Group is ex officio Chairman of the Administrative Council. At the end of FY2014, 150 Contracting States were represented on the ICSID Administrative In the course of the year, 131 sessions or hearings were held in the cases administered by ICSID. Council. The most recent Member to join is Canada. Decisions of the Administrative Council are These were held at the seat of the Centre in Washington, D.C., at the World Bank offices in taken by vote. Each representative has one vote, which carries equal weight. The President of the Paris, or at other venues as agreed by the parties. Where suitable, hearings and sessions were World Bank Group has no vote. conducted by telephone or video conference, reflecting the Centre’s continuing efforts to reduce the cost and increase the efficiency of proceedings. The number of proceedings conducted by On October 11, 2013, the President of the World Bank Group, Dr. Jim Yong Kim, presided over the telephone and video conference remained steady; 41% of all sessions and hearings in FY2014 47th Annual Meeting of the Council, which was held in Washington, D.C. The Resolutions adopted were held in this manner. by the Administrative Council at its 47th Annual Meeting are reproduced in Chapter 6. During the fiscal year, 22 awards and 331 decisions and procedural orders were issued by arbitral ICSID Panels tribunals, conciliation commissions and ad hoc Committees. This is a significant increase in As indicated in Chapter 3 of this report, the ICSID Convention entitles each Contracting State to jurisprudence developed under the ICSID Rules. The Centre publishes these rulings on its website, designate up to four persons to the Panels of Arbitrators and of Conciliators, respectively. Individuals with the parties’ permission. Where parties withheld permission to publish awards, the Centre of any nationality may be designated to the Panels by a Contracting State. The arbitrators and published excerpts of the legal reasoning of the tribunal as permitted by the Rules. conciliators listed on the Panels are available for selection to ICSID Tribunals, Commissions and ad hoc Committees. 32 | ICSID ANNUAL REPORT 2014 | 33 The ICSID Secretariat continues its efforts to ensure that the Panels are updated and enlarged. In Cooperation with Other International Organizations the course of FY2014, the Secretary-General held a number of meetings with government officials ICSID continued to collaborate with other multilateral institutions on investment law and dispute to encourage Contracting States with vacant or expired nominations to make designations. At these settlement issues during FY2014. For instance, ICSID participated in the 46th Session (Arbitration meetings, the Secretary-General emphasized the vital role of the Panels for the good functioning of and Conciliation) of the United Nations Commission on International Trade Law (UNCITRAL) and the international investment arbitration system and the legal and practical criteria for selection of in the 60th Session of the UNCITRAL’s Working Group II (Arbitration and Conciliation) on the Rules qualified candidates in light of the duties they may be called on to perform in ICSID cases. By the on Transparency in Treaty-based Investor-State Arbitration. In October 2013, ICSID participated in end of FY2014 a number of Contracting States have responded with updated designations to the the work of the Mediation Committee of the International Bar Association (IBA) on Investor-State ICSID Panels, and others are in the process of selecting nominees. Mediation Rules. In March 2014, ICSID co-organized a conference to mark the 20th anniversary of the signing of the Energy Charter Treaty (ECT) with the Energy Charter Secretariat and the A list of members of the ICSID Panels of Arbitrators and of Conciliators nominated in FY2014 and Arbitration Institute at the Stockholm Chamber of Commerce (SCC). the State nominating them is found in Chapter 3. The full list of members of the ICSID Panels is available on the ICSID website. In April 2014, the Secretary-General of ICSID made a presentation on investor-State dispute settlement under investment treaties to the International Trade Committee of the European Official Visits Parliament in Brussels. On this occasion, ICSID prepared and published a special focus issue of its In October and November 2013, the Secretary-General visited Cameroon and Nigeria where she caseload statistics, dealing with cases involving EU member States as the State Party to the dispute, as met with Ministers and officials representing those governments. In the course of FY2014, the ICSID well as cases involving investors from an EU member State. These are available on the ICSID website. Secretariat received several delegations from Contracting States at its headquarters in Washington, D.C., including from the Republic of Indonesia, Republic of Korea, Republic of San Marino and the In the course of FY2014, ICSID took part in the deliberations of several professional organizations Kingdom of Saudi Arabia. Informational meetings were also held with government officials from dedicated to enhancing expertise and knowledge in the practice and administration of Australia, Iraq, Japan, Kyrgyz Republic, Trinidad and Tobago, and Turkmenistan. The Secretary- arbitration. The Secretary-General continued her work as a member of the advisory bodies of General held a series of meetings with representatives of more than 30 ICSID Contracting States the American Society of International Law (ASIL), Centre for International Governance Innovation accredited to the World Bank Executive Directors offices. (CIGI), International Council for Commercial Arbitration (ICCA), and International Federation of Commercial Arbitration Institutions (IFCAI). Institutional Arrangement Agreements ICSID offers disputing parties the option of holding hearings in any location agreed upon, and has As part of its efforts to contribute to the discourse on international investment law, ICSID has served developed partnerships with other arbitration institutions to complement its ability to offer hearings as a supporting organization in a number of events hosted by international organizations and in World Bank facilities around the world. In FY2014, ICSID entered into a renewed cooperation educational institutions. Further information can be found in Chapter 5 of this Report. agreement with the Lagos Regional Centre for International Commercial Arbitration. Young ICSID ICSID has 13 such agreements in place, including agreements with: the Australian Centre for Young ICSID continues to encourage professional development among international investment International Commercial Arbitration in Melbourne; the Australian Commercial Disputes Centre dispute resolution practitioners under the age of 45. As at June 30, 2014, Young ICSID has received in Sydney; the Centre for Arbitration and Conciliation at the Chamber of Commerce in Bogota; over 400 enrollment applications from all regions of the world. In December 2013, Young ICSID the China International Economic and Trade Arbitration Commission; the German Institution of co-hosted a Young Arbitrators Forum in Paris, France. In February 2014, Young ICSID organized and Arbitration; the Gulf Cooperation Council Commercial Arbitration Centre in Bahrain; the Hong hosted, in Washington, D.C., a book launch event for Dr. Todd Weiler’s new book, The Interpretation Kong International Arbitration Centre; Maxwell Chambers in Singapore; the Permanent Court of of International Investment Law: Equality, Discrimination and Minimum Standards of Treatment in Arbitration in The Hague; the Regional Arbitration Centers of the Asian-African Legal Consultative Historical Context. Committee in Cairo, Kuala Lumpur and Lagos; and the Singapore International Arbitration Centre. 34 | ICSID ANNUAL REPORT 2014 | 35 Best Practices When completed, the enhanced ICSID website will also provide a standardized web-based During FY2014, ICSID continued to develop and implement its best practices in investment curriculum vitae form developed by the Centre, with biographical information on arbitrators arbitration. As part of this project, the ICSID Secretariat has continued creating and updating and conciliators on the ICSID Panels of Arbitrators and of Conciliators, as well as all arbitrators, templates related to various aspects of the administration of proceedings. The best practices conciliators and annulment committee members who have served in ICSID cases. This information tools and templates have also been incorporated in the ICSID case management system and have will be searchable through an advanced system that will help users identify arbitrators with particular significantly reduced ICSID staff time for completing various tasks in the administration of a case. language skills or nationalities, and even identify all cases in which an arbitrator has participated The Centre has also launched an internal Knowledge Management initiative to compile relevant concomitantly with another arbitrator or counsel. case related information (e.g., awards, decisions, procedural orders) as well as internal research, presentations, memoranda and other data. This project will facilitate and expedite research time Staffing for ICSID staff and preserve institutional knowledge. During the fiscal year, ICSID continued to align its workforce with the growing caseload, mainly by recruiting additional counsel, paralegals and administrative support staff. The majority of the The ICSID Secretariat continued to expedite its target timelines for conclusion of internal steps and Secretariat staff is dedicated to case administration, and the remainder has responsibility for the procedures in the administration of cases. For example, in FY2014, the Secretariat completed the Centre’s institutional, general administration and financial operations. review of a Request for Arbitration in an average of 21 days from the date the file was received. Similarly, when ICSID was asked to appoint arbitrators under Article 38 of the ICSID Convention, The Secretariat is currently composed of 55 staff members from 32 countries, and remains one of the process was completed in an average of six weeks from the date the request to appoint was the most culturally diverse organizations within the World Bank Group. Most staff are fluent in two filed by the parties. or all three of the Centre’s official languages (English, French and Spanish), and several are fluent in other languages, including Akan, Amharic, Arabic, Bulgarian, Cantonese, Czech, German, Italian, This year, ICSID also adopted practices to provide parties with enhanced, real-time information Kirundi, Kinyarwanda, Malay, Mandarin, Polish, Portuguese, Somali, Swahili, Swedish, Tagalog, about the status of a case, including budget and the progress of a tribunal in drafting decisions Wolof and Yoruba. and awards. New Headquarters Finally, ICSID continued its effort to support transparency of the process by encouraging the In FY2014, the ICSID Secretariat relocated to new offices within the World Bank Headquarters publication of awards, decisions, and procedural orders and information about the status of each in Washington, D.C. The Centre continues to meet the needs of disputing parties by providing case. Over 1,450 individual entries were posted on the website in this fiscal year. superior facilities to manage their proceedings. Technology In FY2014, ICSID continued to use information technology to enhance its ability to deliver cost- effective, high-quality services. The Centre introduced several innovative in-house financial systems, including a state-of-the-art solution to streamline payments to arbitrators, conciliators and ad hoc Committee members and automate other key case-related financial transactions. This system makes available real-time financial information on the cases. Other initiatives include development of a new website, a system to expedite refunds to parties in concluded cases, and a searchable web portal which will house the curricula vitae of ICSID arbitrators. 36 | ICSID ANNUAL REPORT 2014 | 37 CHAPTER 5 OUTREACH The Fall 2013 issue covered a variety of topics, such as an analysis of the bilateral investment treaty between India and Nepal; the impact of bilateral investment treaty proliferation on the demand for investment insurance; counterclaims in investment arbitration; and the promotion of the legitimacy ICSID undertakes various activities each year to contribute to a better understanding of the ICSID and vitality of international investment arbitration. The 2013 Lalive Lecture on the Case Law of the process and to advance knowledge of, and discussion about, current developments in international International Court of Justice on Investment Arbitration was also published in this issue. investment arbitration. This includes making presentations in locations around the world and publishing general and specialized materials on international investment law and dispute settlement. The Winter 2014 issue devoted an entire section to alternative dispute resolution in investment disputes, and the International Bar Association Rules for Investor-State Mediation were published in Publications Update this section. This issue also contained a discussion on the use of the plea of illegality in investment ICSID REVIEW—FOREIGN INVESTMENT LAW JOURNAL — As a result of ICSID’s partnership treaty arbitration and sovereign immunity in enforcement proceedings under German law. with Oxford University Press in 2011, the ICSID Review is now available online and in print. The full archive of the ICSID Review has also been made available online. This has increased access to The Spring 2014 issue included the 2013 Karl-Heinz Böckstiegel Lecture and analyses of issues the journal for international audiences, simplified legal research, and complemented the research such as foreign investment law as a complex adaptive system; the impact of mutual termination initiatives of the Centre. Beginning in 2013, the journal moved from two to three publications per of investment treaties on investor rights; and U.S. national security implications of foreign direct year. During FY2014, the Centre published the Fall 2013, Winter 2014 and Spring 2014 issues. investment. This issue also contained the two winning submissions from the fourth annual ICSID Every issue contains three sections: case comments, articles and notes. The case comments analyze Review Student Writing Competition, which was held during FY2014. The winning submissions significant decisions under the ICSID Convention, Additional Facility, or other rules. The articles were entitled ICSID and the Right to Water: An Ingredient in the Stone Soup by Heather L. Bray address topics related to investment law and arbitration in depth, while the notes consider current and La conformité de l’investissement au droit national, condition de sa protection international issues on a more specific basis. In addition, important primary sources of international investment (Compliance of the Investment with National Law, A Condition of International Protection) by law are included in the ICSID Review. Francisco-Xavier Paredes. The 2014 Competition is currently underway. COLLECTIONS — In FY2014, the Centre published four supplements of its two loose-leaf collections, Investment Laws of the World and Investment Treaties. The Investment Laws of the World release contained new or revised investment legislation from the following countries: Costa Rica, El Salvador, Guatemala, Honduras and Mexico (release 2014-1). Three updated supplements of the Investment Treaties collection were published containing the texts of 60 bilateral investment agreements and protocols, concluded by 57 countries from all regions of the world between 1993 and 2010 (releases 2013-2, 2013-3 and 2014-1). The editorial staff at the Centre also completed two additional updating supplements to the Investment Treaties, adding to the collection another 40 bilateral investment agreements, concluded by 41 different countries, which will be published together with the launch of the 12th and 13th volumes of the publication. THE ICSID CASELOAD—STATISTICS — In FY2014, the Centre published Issues 2013-2 and 2014-1 of the ICSID Caseload—Statistics online in English, French and Spanish. In these issues, the Centre continued its practice of profiling the ICSID caseload by reporting quantitative analyses on the cases registered and administered by the ICSID Secretariat; the basis of consent to ICSID jurisdiction ICSID Review—Foreign Investment Law Journal, Deborah W. Campos, World Bank 38 | ICSID ANNUAL REPORT 2014 | 39 invoked in registered arbitration and conciliation cases; the geographic distribution of ICSID cases International Conferences by State party to the dispute; the economic sectors involved in ICSID disputes; the outcomes in ICSID staff were panelists and speakers at international investment arbitration conferences organized ICSID arbitration and conciliation proceedings; the nationality and geographic origins of arbitrators, by the American Bar Association, the American Society of International Law, the Energy Charter conciliators and ad hoc Committee members appointed in ICSID proceedings; and the outcomes Secretariat, the Institute of Transnational Arbitration, the International Bar Association (IBA), the in annulment proceedings under the ICSID Convention. Issue 2014-2, updating the information to International Chamber of Commerce (ICC), International Council for Commercial Arbitration, the June 30, 2014, was published in July 2014. On April 1, 2014, ICSID was invited to participate in a International Law Association, the International Law Institute, the International Union of Lawyers, workshop of the International Trade Committee of the European Parliament in Brussels, Belgium. the Latin American Association for Arbitration, the summer Arbitration Academy in Paris, the Rocky In preparation for this workshop, ICSID generated statistics specific to the European Union and Mountain Mineral Law Foundation, the Senegal Bar, and the Stockholm Chamber of Commerce. In has now released a special focus issue of these statistics, which are available on the ICSID website. several instances, ICSID was the organizer or co-organizer of the conference. PUBLICATION INITIATIVE — The Centre continued to publish procedural details, awards, decisions As in past years, on July 2 and 3, 2013, ICSID Legal Counsel presented to students, government and orders in ICSID cases on the ICSID website. The Centre also publishes excerpts of the legal officials and lawyers taking part in the Arbitration Academy in Paris, France, on ICSID arbitration reasoning in an award where a party withholds its consent for ICSID to publish the full award. During and in particular, on nationality requirements and counterclaims. FY2014, ICSID published numerous awards, decisions, and orders in cases concluded in 2012, 2013 and early 2014. The Centre continued to contact ICSID parties in concluded cases to seek their On August 29 and 30, 2013, ICSID Legal Counsel participated in a conference in Stockholm, authorization to publish all rulings. This ongoing initiative supports the Centre’s outreach mission Sweden, on the procedural aspects of corruption allegations in investor-State arbitration. by enhancing public understanding of ICSID proceedings and investment law, and offering free access to ICSID case law. PUBLIC HEARING BROADCASTS — The Centre continued to offer parties to ICSID cases the option to webcast proceedings. In FY2014, ICSID arranged to broadcast the hearing on jurisdiction and the merits in Apotex Holdings Inc. and Apotex Inc. v. United States of America (ICSID Case No. ARB(AF)/12/1), a North American Free Trade Agreement (NAFTA)/ICSID Additional Facility proceeding. The hearing was held on November 18–26, 2013, in Washington, D.C. WEB UPDATES — ICSID continued to utilize its website as a primary means of communicating information in English, French, and Spanish about ICSID cases and practices, as well as significant events and institutional developments. ICSID is currently designing and implementing an updated website, which will be launched in early FY2015. Events and Presentations During FY2014, ICSID held several of its own events and co-sponsored a number of conferences with other international arbitration bodies and multilateral organizations. Nearly 90 presentations were made during the year in countries in different regions of the world, including Australia, Austria, Belgium, Cameroon, Canada, France, India, Italy, the Republic of Korea, Mexico, Nigeria, Senegal, Singapore, Sweden, Switzerland, the United Kingdom, and the United States. Aïssatou Diop, ICSID Counsel, presenting an ICSID 101 course in Senegal, Saly, Senegal, March 1, 2014, Moustapha Diop 40 | ICSID ANNUAL REPORT 2014 | 41 On October 8, 2013, ICSID Legal Counsel attended the International Bar Association’s annual Meg Kinnear, ICSID Secretary-General, presenting at the conference and participated on a panel discussing the IBA Investor-State Mediation Rules, and Stockholm Conference, Stockholm, Sweden, May 12, 2014, specifically, how they complement the existing investor-State dispute resolution system. Nike Larsson, Stockholm Chamber of Commerce On November 19 and 22, 2013, ICSID staff also spoke on international investment arbitration at events during the Law, Justice and Development Week organized by the World Bank along with the Multilateral Investment Guarantee Agency (MIGA) and the International Finance Corporation (IFC). On December 5 and 6, 2013, ICSID partnered with the American Arbitration Association/ International Centre for Dispute Resolution and the International Chamber of Commerce for the Young Arbitrators Forum (YAF) and Joint Conference, and the 30th Joint Colloquium on International Arbitration. Both events took place in Paris, France. The YAF Joint Conference provided a forum for young practitioners to exchange thoughts on international arbitration and to enrich their network in the field, while the Colloquium focused on the enforcement of arbitration agreements and awards. The program included panels of experts and the heads of each arbitral institution who discussed institutional developments and arbitration practice and procedure, including interim measures, emergency arbitrator proceedings and enforcement issues, and state perspectives on commercial and investment arbitration. On January 30, 2014, ICSID Legal Counsel participated in an ICC Young Arbitrators Forum event in Paris, France on the standards for disqualifying arbitrators in commercial and investment arbitration. On April 12, 2014, ICSID participated in the Joint Annual Meeting of the American Society of International Law and the International Law Association, and presented on the topic of standards In cooperation with the Energy Charter Secretariat and the Stockholm Chamber of Commerce, and outcomes in the disqualification of arbitrators. ICSID organized a conference in recognition of the twentieth anniversary of the Energy Charter Treaty held on March 7, 2014 in Paris, France. The conference addressed current legal issues, On May 12, 2014, ICSID co-organized an event with the Stockholm Chamber of Commerce on including the State’s right to regulate, denial of benefits, and the definition of investor, all in light investment protection and investor-State dispute settlement during which the Secretary-General of recent decisions and awards, as well as a vision of the future of the ECT. and fellow panelists shared insights about ICSID and SCC experience in administering investment arbitrations and addressed questions about topics such as transparency, the purpose of investor-State On April 1, 2014, the Secretary-General gave a presentation on procedural innovations in recent dispute settlement, current trends and future directions. The Secretary-General also participated in a investment treaties during the American Bar Association’s Annual Spring Meeting, held in New York. roundtable discussion on investment arbitration in Frankfurt, Germany, on May 14, 2014. On April 3, 2014, the Secretary-General also accepted an award from the ABA International Law Section for Outstanding Performance of an International Organization. On June 18 and 19, 2014, ICSID Legal Counsel participated in a roundtable discussion during the 26th Annual Institute of Transnational Arbitration Workshop, held in Dallas, Texas, on the topic of During the annual meeting of the International Council for Commercial Arbitration held in Miami, modern enforcement of arbitral awards. on April 7, 2014, the Secretary-General participated on a panel discussing the role of arbitral institutions in furthering legitimacy. 42 | ICSID ANNUAL REPORT 2014 | 43 Similarly, from November 4 through 8, 2013, the ICSID Secretary-General and ICSID Legal Counsel Lindsay Gastrell, ICSID Counsel, presenting at traveled to Lagos, Nigeria to visit World Bank and IFC country office staff, meet government a workshop for the Iraqi Ministry of Trade, Washington, D.C., November 4, 2013, officials, present an ICSID 101 course at the Regional Centre for International Commercial U.S. Department of Commerce Arbitration (RCICA), and provide an institutional perspective during a panel discussion on alternate dispute resolution in Africa at a conference hosted by the International Bar Association on mergers, acquisitions and inward investment in Africa. On November 4, 2013, ICSID Legal Counsel gave an overview of international dispute settlement to participants in the Commercial Law Development Program (CLDP) Commercial Attaché Training Program from Iraq. On November 11, 2013, ICSID Legal Counsel presented on the contribution of ICSID to investor- State arbitration during a conference hosted by UNCITRAL, the Ministry of Justice, and the Korean Commercial Arbitration Board on Arbitration Reform in the Asia Pacific Region in Seoul, Korea. ICSID Legal Counsel also attended the Joint Seminar on International Arbitration co-hosted by the International Union of Lawyers and the Senegal Bar from February 29 to March 2, 2014, and presented an overview of ICSID procedure on March 1, 2014 to the African Institute of Management. Regional Focus As part of ICSID’s global outreach initiative, the Secretary-General and ICSID Legal Counsel On April 1, 2014, the Secretary-General presented a Workshop on Investor-State Dispute addressed numerous groups of government officials, judges, lawyers and other interested groups Settlement Provisions in the EU’s International Investment Agreements before the International at meetings held at ICSID’s offices in Washington, D.C. and in locations abroad. Trade Committee of the European Parliament in Brussels, Belgium. On July 15, 2013, ICSID Legal Counsel provided an introduction to ICSID’s dispute settlement From June 16 to 18, 2014, the Secretary-General and ICSID Legal Counsel traveled to Mexico City, mechanisms—with a focus on the Latin American experience—for lawyers from the legal Mexico, to meet with government officials, participate in the First Annual Conference of the Latin departments of the IBRD and the Inter-American Development Bank during their Quarterly Meeting. American Association for Arbitration, and present an ICSID 101 course in Spanish. On October 25, 2013, the Secretary-General participated in a conference on international Lectures and Academic Events arbitration hosted by the International Chamber of Commerce Canada in Toronto and provided an The Secretary-General and ICSID Legal Counsel delivered numerous lectures and participated in update on developments and trends in ICSID proceedings. various panels at universities around the world, either in person or through video-conference. From October 29 through November 1, 2013, the Secretary-General and ICSID Legal Counsel In particular, ICSID Legal Counsel presented overviews of investment arbitration and ICSID visited Yaoundé, Cameroon to meet with government officials, attend a symposium on investment procedure to students at the American University Washington College of Law, Bocconi University arbitration, present a one-day introductory course on ICSID practice and procedure, and participate in Milan, Georgetown University Law Center, Government Law College in Mumbai, Hong Kong on a panel on OHADA (Organization for the Harmonization of Business Law in Africa) arbitration in University, Inter-American University of Puerto Rico, John Marshall Law School, Stanford University commercial and investment matters in Africa. Law School, the University of Richmond School of Law, and Washington & Lee University. 44 | ICSID ANNUAL REPORT 2014 | 45 ICSID served as a supporting organization for the 5th Government Law College International Law On February 27, 2014, Young ICSID hosted a launch event for a new book by Todd Weiler titled Summit held in Mumbai, India from January 31 until February 2, 2014. In that context, on February The Interpretation of International Investment Law: Equality, Discrimination and Minimum Standards 1, 2014, the Secretary-General gave a presentation through video conference on international of Treatment in Historical Context. Both members of ICSID staff and the general public attended investment law. the event. ICSID Legal Counsel also participated on career panels and in networking sessions for law students ICSID staff also participated in a number of roundtable and panel events hosted by universities, at local universities and organizations, and also held ICSID 101 courses in Milan, Italy, and Chicago, bar associations, and law firms on developments in international arbitration and related fields of Illinois. These events were attended by aspiring lawyers and current legal practitioners interested law and policy. in developing their awareness of, and involvement in, investment arbitration. ICSID Official Documents ICSID Legal Counsel also assisted with several moot competitions on international arbitration to AVAILABLE FROM THE CENTRE FREE OF CHARGE UNLESS OTHERWISE INDICATED participate in the development of the next generation of legal professionals with knowledge and skills in the field. List of Contracting States and Other Signatories of the Convention, Doc. ICSID/3 (periodic updates) (English, French and Spanish) Other Events On October 23, 2013, ICSID held an open house to showcase its new offices in Washington, Contracting States and Measures Taken by Them for the Purpose of the Convention, Doc. ICSID/8 (periodic updates) (English) D.C., in which it moved in August 2013, and to provide an opportunity for the users of ICSID dispute settlement and other interested parties to view ICSID’s Washington, D.C. hearing and Members of the Panels of Arbitrators and of Conciliators, Doc. ICSID/10 (periodic updates) (English) administration facilities. ICSID Regulations and Rules, Doc. ICSID/4/Rev. 1 (May 1975) (contains the texts of the Centre’s Regulations and Rules in effect from January 1, 1968 to September 25, 1984) (English, French and Spanish) ICSID Basic Documents, Doc. ICSID/15 (January 1985) (contains the texts of the Centre’s Regulations and Rules in effect from September 26, 1984 to December 31, 2002 and the text of the ICSID Convention) (English, French and Spanish) ICSID Convention, Regulations and Rules, Doc. ICSID/15/Rev. 1 (January 2003) (contains the texts of the Centre’s Regulations and Rules in effect from January 1, 2003 to April 9, 2006 and the text of the ICSID Convention) (English, French and Spanish) ICSID Convention, Regulations and Rules, Doc. ICSID/15 (April 2006) (contains the texts of the Centre’s Regulations and Rules in effect from April 10, 2006 and the text of the ICSID Convention) (English, French and Spanish) ICSID Additional Facility for the Administration of Conciliation, Arbitration and Fact-Finding Proceedings, Doc. ICSID/11 (June 1979) (contains the texts of the Additional Facility Rules in effect Inside ICSID’s new offices, Washington, D.C., Deborah W. Campos, World Bank from September 27, 1978 until December 31, 2002) (English, French and Spanish) 46 | ICSID ANNUAL REPORT 2014 | 47 ICSID Additional Facility Rules, Doc. ICSID/11/Rev. 1 (January 2003) (contains the texts of the The ICSID Caseload—Statistics (Special Focus - European Union) (contains statistics on ICSID cases Additional Facility Rules in effect from January 1, 2003 to April 9, 2006) (English, French and Spanish) involving European Union States and investors as of March 1, 2014) (English, French and Spanish) (Internet edition only) ICSID Additional Facility Rules, Doc. ICSID/11 (April 2006) (contains the texts of the Additional Facility Rules in effect from April 10, 2006) (English, French and Spanish) Bilateral Investment Treaties 1959–1996: Chronological Country Data and Bibliography (May 30, 1997) (English) ICSID Model Clauses, Doc. ICSID/5/Rev. 1 (February 1, 1993) (English, French and Spanish) (Internet edition only) ICSID Staff Publications Meg Kinnear, Navigating International Dispute Resolution: Innovations in Investor-State Arbitration, List of ICSID Cases, ICSID/16 (Internet edition only) VI Hugo Grotius Lecture (2013) Memorandum on the Fees and Expenses of ICSID Arbitrators (July 6, 2005) (English, French and Meg Kinnear, Opening remarks, ICSID and the International Investment Treaty Arbitration: Progress Spanish) and Prospects, in Silk Road Collected Courses on International Economic Law, Volume: International Investment Law and Arbitration (Wenhua Shan ed., forthcoming 2014) ICSID Schedule of Fees (January 1, 2013) (English, French and Spanish) Frauke Nitschke, The IBA’s Investor-State Mediation Rules and the ICSID Dispute Settlement Framework, 29(1) ICSID Rev. 112-132 (2014) ICSID Annual Report (1967–2013) (English, French and Spanish) Frauke Nitschke and Eloïse Obadia, Institutional Arbitration and the Role of the Secretariat, in Other ICSID Publications Litigating International Investment Disputes: A Practitioner’s Guide (Chiara Giorgetti ed., Brill ICSID Review—Foreign Investment Law Journal (three issues per year) (available from Oxford Nijhoff Publishers, forthcoming 2014) University Press, Journals Customer Service Department, 2001 Evans Road, Cary, N.C. 27513, U.S.A.; Tel.: 800–852–7323; Fax: 919–677–1714; URL: http://icsidreview.oxfordjournals.org; Email: Natalí Sequeira and Mauricio París, El arbitraje ante el CIADI como mecanismo de resolución de jnlorders@oup.com at US$79 for individuals (print and online combined) and US$188, US$216, or disputas de inversión en Costa Rica, 1 Costa Rican J. Intl. Arb. 29-40 (2014) US$235 for institutions for online, print, or print and online combined subscriptions) Documents Concerning the Origin and Formulation of the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (1967; 2001; 2006) (English, French and Spanish) (available from the Centre at US$250) Investment Laws of the World (ten loose-leaf volumes) and Investment Treaties (thirteen loose-leaf volumes) (available from Oxford University Press, Order Management Department, North Kettering Business Park, Hipwell Road, Kettering, Northamptonshire, NN14 1UA, UK; Tel.: +44 (0) 1536 452773; Email: customer.services@oup.com at US$255 per release, US$2,690 for both sets, US$1,345 for the Investment Laws of the World volumes only and US$1,345 for the Investment Treaties volumes only) The ICSID Caseload—Statistics, Issues 2010-1, 2010-2, 2011-1, 2011-2, 2012-1, 2012-2, 2013-1, 2013-2, 2014-1, 2014-2 (contains a profile of the ICSID caseload; semi-annual updates) (English, French and Spanish) (Internet edition only) Martina Polasek, Geraldine Fischer, and Aïssatou Diop, ICSID Counsel, discussing a case with Meg Kinnear, ICSID Secretary-General, Washington, D.C., June 13, 2014, Benjamin Garel, World Bank 48 | ICSID ANNUAL REPORT 2014 | 49 2013 ICSID Administrative Council Meeting, Washington, D.C., October 11, 2013, Deborah W. Campos, World Bank 2012 ICSID Administrative Council Meeting, photo by Deborah W. Campos, Tokyo, Japan, October 12, 2012 CHAPTER 6 FORTY-SEVENTH ANNUAL MEETING OF THE ADMINISTRATIVE COUNCIL Pursuant to Article 4 of the ICSID Convention, the ICSID Administrative Council is composed of one AC(47)/RES/123— AC(47)/RES/124— representative of each Contracting State. In the absence of a contrary designation, the governor Approval of the Annual Report Adoption of Budget for Fiscal Year 2014 for the World Bank appointed by that State serves ex officio as representative on the Council. Each member has one vote on the Administrative Council. The Administrative Council The Administrative Council RESOLVES RESOLVES The 47th Annual Meeting of the Administrative Council took place on October 11, 2013, in To approve the 2013 Annual Report on the To adopt, for the period July 1, 2013 to June Washington, D.C., on the occasion of the Annual Meetings of the Boards of Governors of the World operation of the Centre. 30, 2014, the budget set forth in paragraph 2 Bank Group and the International Monetary Fund. of the Report and Proposal of the Secretary- General on the Budget for Fiscal Year 2014, At its 47th Meeting, the Administrative Council approved the Centre’s 2013 Annual Report and its dated June 27, 2013. administrative budget for FY2014. The Resolutions adopted at the Meeting are reproduced on page 51. 50 | ICSID ANNUAL REPORT 2014 | 51 View of the ICSID atrium, Washington, D.C., Scholastica Nguyen, Patricia Hord Graphik Design CHAPTER 7 FINANCE ICSID’s administrative expenditures in FY2014 were covered by fee income and by the International Bank for Reconstruction and Development (IBRD) pursuant to the Memorandum of Administrative Arrangements concluded between the IBRD and ICSID. It is therefore not necessary to assess any excess expenditures on Contracting States pursuant to Article 17 of the Convention. Expenditures relating to pending arbitration proceedings are borne by the parties in accordance with ICSID’s Administrative and Financial Regulations. The Financial Statements of the Centre for FY2014 are set forth in the following pages. 52 | ICSID ANNUAL REPORT 2014 | 53 FINANCIAL STATEMENTS all amounts Expressed in u.s. dollars unless otherwise noted STATEMENTS OF FINANCIAL POSITION STATEMENTS OF ACTIVITIES June 30, 2014 and june 30, 2013 for THE years ended June 30, 2014 and june 30, 2013 2014 2013 2014 2013 Assets: Support and revenues: Cash $ 7,229,113 $ 5,566,349 Revenues from arbitration/conciliation proceedings $ 34,182,606 $ 29,332,044 Share of cash and investments in the Pool (Notes 2 and 3) 31,523,162 25,523,764 (Notes 2 and 8) In-kind contributions (Notes 2 and 10) 3,004,840 2,848,664 Due from parties to arbitration/conciliation proceedings (Note 2) 825,039 586,082 Net investment income (Note 2) 62,469 56,321 Other receivables 64,048 80 Sales of publications 70,664 34,306 Other assets, net (Note 4) 480,014 375,922 Total support and revenues 37,320,579 32,271,335 Total assets $ 40,121,376 $ 32,052,197 Expenses: Liabilities and net assets: Expenses related to arbitration/conciliation proceedings Liabilities: 27,516,213 23,513,696 (Notes 2 and 9) Payable to International Bank for Reconstruction $ 1,607,338 $ 1,285,353 Administrative expenses (Note 10) 8,332,714 6,794,722 and Development (Note 2) Advance from International Bank for Reconstruction and Amortization expenses (Notes 2, 4 and 10) 69,768 118,495 189,719 379,438 Development (Note 5) Net investment income applied to arbitration/conciliation 62,469 56,321 Advance received for miscellaneous services 13,000 — proceedings (Note 2) Total expenses 35,981,164 30,483,234 Deferred revenue (Note 2) 2,217,167 1,871,025 Accrued expenses related to arbitration/conciliation proceedings Change in net assets 1,339,415 1,788,101 6,805,659 6,378,259 (Note 2) Net assets, beginning of the year 2,406,536 618,435 Advances from parties to arbitration/conciliation proceedings (Note 2) 25,542,542 19,731,586 Net assets, end of the year $ 3,745,951 $ 2,406,536 Total liabilities 36,375,425 29,645,661 Net assets, unrestricted (Note 6) 3,745,951 2,406,536 Total liabilities and net assets $ 40,121,376 $ 32,052,197 The notes to the financial statements are an integral part of these statements. The notes to the financial statements are an integral part of these statements. 54 | ICSID ANNUAL REPORT 2014 | 55 NOTES TO FINANCIAL STATEMENTS June 30, 2014 and JUNE 30, 2013 STATEMENTS OF Cash flows Note 1 — Organization for THE years ended June 30, 2014 and june 30, 2013 Established on October 14, 1966, the International Centre for Settlement of Investment Disputes (ICSID or the Centre), is a member of the World Bank Group which also includes the International Bank for Reconstruction and Development (IBRD), the International Finance Corporation (IFC), 2014 2013 the International Development Association (IDA) and the Multilateral Investment Guarantee Cash flows from operating activities: Agency (MIGA). Under the ICSID Convention, the Centre provides facilities for the conciliation Change in net assets $ 1,339,415 $ 1,788,101 and arbitration of investment disputes between Contracting States (countries which have ratified Adjustments to reconcile change in net assets to the ICSID Convention) and nationals of other Contracting States. Pursuant to Additional Rules net cash provided by operating activities: Amortization 69,768 118,495 adopted in 1978, ICSID also administers certain types of proceedings between governments and Increase in due from parties to arbitration/conciliation proceedings (238,957) (306,382) foreign nationals that fall outside the scope of the ICSID Convention. These include conciliation (Increase)/Decrease in other receivables (63,968) 32,012 and arbitration proceedings for the settlement of investment disputes where either the home or the Increase in payable to International Bank for host country of the investor concerned is not a Contracting State. ICSID also administers investor- 321,985 385,609 Reconstruction and Development State proceedings under other sets of rules, such as the Arbitration Rules of the United Nations Increase in advance received for miscellaneous services 13,000 — Commission on International Trade Law (UNCITRAL). Finally, the Centre also acts as appointing Increase in deferred revenue 346,142 309,006 Increase in accured expenses related to arbitration/ authority under various arbitral rules and international treaties. In order to process the cases, 427,400 17,763 conciliation proceedings the Centre constitutes Arbitral Tribunals, Conciliation Commissions and ad hoc Committees, as Increase in advances from parties to arbitration/ 5,810,956 3,620,321 necessary. On February 13, 1967, IBRD and the Centre entered into Administrative Arrangements, conciliation proceedings Net cash provided by operating activities 8,025,741 5,964,925 which were effective as of the date of the establishment of the Centre. The Memorandum of Administrative Arrangements (the Memorandum) provides that, except to the extent that ICSID, Cash flows from investing activities: pursuant to its Administrative and Financial Regulations (the Regulations), collects funds from the Increase in share in pooled investments (5,999,398) (3,331,703) parties to proceedings to cover its administrative expenses, IBRD shall provide reasonable facilities Purchase of other assets (173,860) (116,604) and services to ICSID without charge, as described in Notes 2 and 10. Net cash used in investing activities (6,173,258) (3,448,307) Effective February 2012, pursuant to Operational Guidelines for the Funding of the Operations of Cash flows from financing activities: the Centre entered into by IBRD and the Centre, if at the end of each fiscal year the Centre’s total Payment of advance from International Bank for (189,719) (189,719) Reconstruction and Development expenditure less the IBRD’s in-kind contribution is less than the revenues collected by the Centre, Cash provided by financing activities (189,719) (189,719) then the accumulated surplus amount will be retained by the Centre and may be carried forward Net increase in cash 1,662,764 2,326,899 indefinitely. In the event the Centre’s total expenditure, less the IBRD’s in-kind contribution, is Cash at beginning of the year 5,566,349 3,239,450 greater than the revenues collected by the Centre during the year, the excess expenditure will be Cash at end of the year $ 7,229,113 $ 5,566,349 charged against the balance of any accumulated surpluses retained by the Centre before the Centre requests supplementary funding from IBRD. The notes to the financial statements are an integral part of these statements. 56 | ICSID ANNUAL REPORT 2014 | 57 NOTES TO FINANCIAL STATEMENTS (CONTINUED) Note 2 — Significant Accounting Policies Payable to IBRD: These amounts represent the balance of outstanding expenses incurred in the Basis of Accounting and Financial Statement Presentation: The financial statements have been normal course of business, which are paid by IBRD on behalf of ICSID. prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) and with International Financial Reporting Standards (IFRS), as issued by the Accrued expenses related to arbitration/conciliation proceedings: Accrued expenses are International Accounting Standards Board (IASB). recorded when it is probable that the expense has been incurred and the amount can be reasonably estimated. Management estimates the amount of unbilled expenses incurred by arbitrators, Use of Estimates: The preparation of financial statements in conformity with U.S. GAAP and IFRS conciliators and Committee members, and related revenues, for ongoing cases at each year end. requires management to make estimates and assumptions that affect the reported amounts of The nature of the cases handled by the Centre requires the use of external arbitrators, conciliators assets, liabilities, revenues and expenses, together with the related disclosures as at the date of and Committee members, who charge fees for their services based on time spent on the cases. the financial statements. Actual results could differ from those estimates. Significant items subject The estimation process uses information received from those individuals about unbilled time spent to such estimates and assumptions include the amount of accrued expenses and related revenues on the cases through the end of the fiscal year. In some instances the determination of fees and for ongoing cases at each year end; the fair value of the share of cash and investments in the pool; expenses incurred in ongoing cases is based on estimated time spent by them in relation to the and the useful lives of other assets. progress of the case and the number of hearings and sessions held during the year. Actual results of case-related fees earned and expenses incurred but unbilled during the year may differ materially Cash: Cash consists of cash held in a bank account. from management’s estimates. Share of the cash and investments in the Pool: Investments in the Pool are held for trading and Advances from parties to arbitration/conciliation proceedings: In accordance with its Regulations, are reported at fair value. Resulting gains or losses are reported as an increase or a reduction in Net the Centre periodically requests parties to proceedings to make advance payments to cover case investment income in the Statement of Activities. All income earned is required to be used by the administrative charges and the fees and expenses of Tribunal, Commission and Committee parties to arbitration/conciliation proceedings to offset the costs of the proceedings. members. These advances are recorded as liabilities. Due from parties to arbitration/conciliation proceedings: Direct expenses incurred by arbitrators, Revenues from arbitration/conciliation proceedings: The Centre’s direct expenses attributable conciliators and Committee members in excess of advance payments made by the parties to to proceedings are borne by the parties in accordance with the Centre’s Regulations. These direct ongoing proceedings are recognized as due from parties and are payable in accordance with the expenses, which include fees and expenses of arbitrators, conciliators and Committee members, Centre’s Regulations. as well as costs associated with meeting rooms and support services for conducting proceedings, are paid from advances from the parties (see Note 9). Accordingly, the Centre recognizes revenues Other assets and amortization: The Centre’s other assets comprise computer systems software from these transactions to the extent expenses related to arbitration/conciliation proceedings are costs, which are capitalized at cost and amortized using the straight line method over a range of incurred during the period. four to ten years. Amortization is charged from commencement of the use of the software. In addition, revenues from proceedings also include the following (see Note 8): The Centre evaluates the carrying value of software annually, and whenever events or changes in circumstances indicate that impairment has occurred. Impairment is considered to have occurred if Registration fees: The Centre charges a non-refundable fee of $25,000 to parties requesting the the carrying amount exceeds its recoverable amount, at which time, a write-down would be recorded. institution of arbitration/conciliation proceedings under the ICSID Convention or the Additional 58 | ICSID ANNUAL REPORT 2014 | 59 NOTES TO FINANCIAL STATEMENTS (CONTINUED) Facility Rules; applying for annulment of an arbitral award rendered pursuant to the Convention; The Centre recognizes expenses, as incurred, for the value of services provided by IBRD, which or requesting the institution of fact-finding proceedings under the Additional Facility Rules. is determined by the estimated fair value of such services. Services by IBRD for which the Centre The Centre charges a fee of $10,000 to parties requesting a supplementary decision to, or the provides no compensation are similarly recognized and measured, and are recorded as in-kind rectification, interpretation or revision of, an arbitral award rendered pursuant to the Convention; contribution revenue. requesting a supplementary decision to, or the correction or interpretation of an arbitral award rendered pursuant to the Additional Facility Rules; or requesting the resubmission of a dispute to Relevant accounting and reporting developments: a new tribunal after the annulment of an arbitral award rendered pursuant to the Convention. The Financial Accounting Standards Board: In May 2011, the FASB issued ASU 2011-04, Fair Value revenues are recognized upon receipt of payment. Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and International Financial Reporting Standards (IFRS). The amendments Administration fees: The Centre charges $32,000 following the constitution of the Tribunal, result in common fair value measurement and disclosure requirements in U.S. GAAP and IFRS. The Commission or Committee concerned, and the same amount on an annual basis thereafter. The ASU is similar to IFRS 13, Fair Value Measurement issued by the International Accounting Standards same annual fee is charged in proceedings administered by the Centre under rules other than the Board in May 2011. The ASU is effective for annual periods beginning after December 15, 2011, and ICSID Convention or Additional Facility Rules. IFRS 13 is effective for annual periods beginning after January 1, 2013. Many of the amendments are changes in wording and do not have material impact on the Centre’s financial reporting. The Centre collects administration fees from advance deposits from the parties to arbitration/ conciliation proceedings. Revenues are recognized on a straight-line basis, over the twelve month In May 2014, the FASB issued ASU 2014-09 (Topic 606) and the IASB issued IFRS 15 Revenue period during which services are performed. The unearned revenue at year end is deferred and from Contracts with Customers jointly with the FASB. The ASU provides a common framework recognized in the subsequent fiscal year. for revenue recognition for U.S. GAAP and IFRS, and supersedes most of the existing revenue recognition guidance in U.S. GAAP. The core principle of the guidance is that an entity recognizes Investment of undisbursed advances from parties and refund of surplus advance to the revenue when it transfers control of promised goods and services to customers in an amount that parties: Net investment income earned on funds advanced from parties is recorded as revenue reflects consideration to which the entity expects to be entitled. The ASU also requires additional and expense in the Statement of Activities, and applied to advances from parties to arbitration/ quantitative and qualitative disclosures to enable financial statement users to understand the conciliation proceedings, which can be used for expenses related to the parties’ respective nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with arbitration/conciliation proceedings. After the completion of the proceedings, if there is an excess customers. For nonpublic entities, the ASU will be effective for annual reporting periods beginning of advances and investment income over expenditures for the proceedings, the surplus is refunded after December 15, 2017 and interim periods within annual periods beginning after December to the parties in proportion to the amounts advanced by them to the Centre. 15, 2018. IFRS 15 will be effective from January 1, 2017, with early application permitted. ICSID is currently evaluating the impact of this ASU and IFRS on its financial statements. Value of services provided by IBRD and in-kind contributions: IBRD provides support services and facilities to the Centre including the following: International Accounting Standards Board (IASB): In November 2013, the IASB issued an 1) The services of staff members and consultants; and amendment to IFRS 9 Financial Instruments. The amendment introduces a new hedge accounting 2) Other administrative services and facilities, such as travel, communications, office mode; allows entities to adopt ‘own-credit’ treatment of IFRS 9 to financial liabilities without accommodations, furniture, equipment, supplies and printing. adopting other requirements of the standard; and removes the January 1, 2015 mandatory effective date of IFRS 9. The standard is available for application. It is not expected that this standard will have an impact on the Centre’s financial reporting. 60 | ICSID ANNUAL REPORT 2014 | 61 NOTES TO FINANCIAL STATEMENTS (CONTINUED) Note 3 — Share of Cash and Investment in the Pool and Fair instruments, where available. Financial instruments for which quoted market prices are not readily Value Measurement available are valued based on discounted cash flow models. These models primarily use market- Amounts paid to the Centre, but not yet disbursed, are managed by IBRD, which maintains an based or independently-sourced market parameters such as yield curves, interest rates, volatilities, investment portfolio (the Pool) for all the trust funds administered by the World Bank Group. IBRD, foreign exchange rates and credit curves, and may incorporate unobservable inputs. Selection of on behalf of the World Bank Group, maintains the Pool’s assets separate and apart from the funds these inputs involves judgment. of the World Bank Group. The Pool’s financial instruments are categorized based on the priority of the inputs to the valuation The Pool is divided into sub-portfolios to which allocations are made based on fund specific technique. The fair value hierarchy gives the highest priority to quoted prices in active markets for investment horizons, risk tolerances and/or other eligibility requirements for trust funds with identical assets or liabilities (Level 1), the next highest priority to observable market-based inputs common characteristics as determined by IBRD. Generally, the Pool includes cash and financial or inputs that are corroborated by market data (Level 2), and the lowest priority to unobservable instruments such as time deposits, money market securities, government and agency obligations, inputs that are not corroborated by market data (Level 3). When the inputs used to measure fair and asset-backed securities. The Pool may also include securities pledged as collateral under value fall within different levels of the hierarchy, the level within which the fair value measurement repurchase agreements as well as derivatives with other counterparties, and receivables from is categorized is based on the lowest level input that is significant to the fair value measurement resale agreements as well as derivatives for which it has accepted collateral. Additionally, the Pool of the instrument in its entirety. ICSID categorizes overnight time deposits as Level 1 and the other may also include derivative contracts such as currency forward contracts, currency swaps, interest money market instruments as Level 2. rates swaps and contracts to purchase or sell mortgage-backed-securities to-be-announced (TBA). Payables and receivables associated with the investment activities are also included in the Pool. The Centre’s funds are invested in a sub-portfolio of the Pool, which invests solely in cash and money Hierarchy level June 30, 2014 June 30, 2013 market instruments, such as overnight time deposits, time term deposits, certificate of deposits, Level 1 $ 2,442,033 $ 5,324,709 and commercial paper with terms of three months or less recorded at par value which approximates Level 2 29,081,129 20,199,055 fair value. Level 3 — — Total $ 31,523,162 $ 25,523,764 The share in pooled cash and investments represents the Centre’s share of the Pool’s fair value at the end of each reporting period. Net investment income consists of the Centre’s allocated share of interest income earned by the Pool, realized gains/losses from sales of securities, and unrealized As of June 30, 2014 and June 30, 2013, ICSID does not have any financial instruments measured at gains/losses resulting from recording the assets held by the Pool at fair value. As explained in Note fair value on a non-recurring basis. During the fiscal year ended June 30, 2014, transfers between 2, net investment income is recorded as revenue and expense in the Statement of Activities and levels were not significant. is applied to advances from parties to arbitration/conciliation proceedings, which can be used for expenses related to such proceedings. All other financial assets and financial liabilities are carried at cost. Their carrying values are considered to be a reasonable estimate of fair value because these instruments tend to be very IBRD, on behalf of the World Bank Group, has an established and documented process to short-term in nature and none are considered to be impaired. determine fair values. Fair value is based upon quoted market prices for the same or similar 62 | ICSID ANNUAL REPORT 2014 | 63 NOTES TO FINANCIAL STATEMENTS (CONTINUED) Note 4 — Other Assets Credit risk – The risk that one party to a financial instrument will fail to discharge an obligation Other assets comprise computer systems software. Amortization charges amounted to $69,768 for and cause the other party to incur a financial loss. Of the Centre’s financial assets, cash held in the the year ended June 30, 2014 (2013: $118,495). None of these assets are considered impaired. depository bank account which is subject to U.S. Federal Deposit Insurance Corporation (FDIC) insurance limits of $250,000 is not subject to credit risk. Therefore, the Centre’s maximum credit exposure at June 30, 2014 is equivalent to the gross value of the remaining assets amounting to Note 5 — Advance from IBRD $38,566,323 (2013: $30,840,193). The Centre does not hold credit enhancements or collateral to During the year ended June 30, 2008, IBRD agreed to lend up to $917,000 to the Centre to enable mitigate credit risk. it to acquire software and develop information systems. The loan bears no interest and is repayable in full within four years upon completion of the development of the information systems. The IBRD invests the Centre’s share of pooled investments in money market securities. The Centre’s Centre had borrowed $758,876 and repaid the third installment, $189,719 (2013: $189,719), with share of the cash and investments in the Pool is not traded in any market. However, the assets an outstanding balance of $189,719 (2013: $379,438). within the Pool are traded in the market and are reported at fair value. IBRD’s policy is to only invest in money market instruments issued or guaranteed by financial institutions whose senior debt securities are rated at least A- in the U.S. markets or equivalent. Note 6 — Net Assets, Unrestricted Net assets, unrestricted represents accumulated surplus in the amount of $3,745,951 (2013: The following table presents investment holdings in terms of the counterparty credit risk exposure $2,406,536). The amount may be carried forward indefinitely. categories as of June 30, 2014 and June 30, 2013. Counterparty credit ratings As of June 30, 2014 As of June 30, 2013 Note 7 — Risks Arising from Financial Instruments AA- or greater 63% 52% The Centre’s financial assets consist of its share of cash and investments in the Pool, cash and other A- or greater 100% 100% receivables. The Pool is actively managed and invested in accordance with the investment strategy established by IBRD for all trust funds administered by the World Bank Group. The objectives of IBRD defines the concentration of credit risk as the extent to which the pooled investments are the investment strategy are foremost to maintain adequate liquidity to meet foreseeable cash flow held by an individual counterparty. The concentration of credit risk with respect to the Pool of needs and preserve capital and then to maximize investment returns. The Centre holds the cash in investments is mitigated because IBRD has investment policies that limit the amount of credit a depository bank account. exposure to any individual issuer. The Centre is exposed to credit and liquidity risks. There has been no significant change during Other receivables and amounts due from parties to arbitration/conciliation proceedings result from the fiscal year to the types of financial risks faced by the Centre or its general approach to the the ordinary course of business. The amounts are neither past due nor impaired. management of those risks. The exposure and the risk management policies employed to manage these risks are discussed below: Liquidity risk – The risk that an entity will encounter difficulty in raising liquid funds to meet its commitments. ICSID Regulations require parties to arbitration/conciliation proceedings to make advance deposits with the Centre to meet anticipated expenses of such proceedings. The Centre’s share of cash and investments in the pool are invested in highly liquid money market instruments and liabilities carried generally have no stated maturity. 64 | ICSID ANNUAL REPORT 2014 | 65 NOTES TO FINANCIAL STATEMENTS (CONTINUED) Note 8 — Revenues from Arbitration/Conciliation Proceedings Note 10 — In-Kind Contributions Revenues from arbitration/conciliation proceedings comprise: As described in Note 1, the Memorandum provides that, except to the extent that the Centre may collect funds from the parties to proceedings to cover its administrative expenses, IBRD will provide 2014 2013 facilities and services to the Centre. Therefore, in-kind contributions represent the value of services Drawdown of advances from parties for direct expenses provided by IBRD, less amounts reimbursed by ICSID to IBRD using proceeds from non-refundable related to arbitration/conciliation proceedings* $ 27,516,213 $ 23,513,697 fees and the sale of publications. Administration fees 4,990,005 4,413,046 Registration fees 1,676,388 1,405,301 A summary is provided below: Total $ 34,182,606 $ 29,332,044 2014 2013 *The Centre recognizes revenue to the extent expenses related to arbitration/conciliation proceedings Recorded value of services provided by IBRD are incurred. The details of such expenses are provided in Note 9. Staff services (including benefits) $ 6,317,147 $ 4,951,154 Administrative services and facilities: Contractual services 263,725 353,588 Note 9 — Expenses Related to Arbitration/Conciliation Administrative services 284,561 298,551 Proceedings Communications and information technology 803,452 618,733 Direct expenses related to arbitration/conciliation proceedings are paid out of advances made by Office accommodations 519,002 476,724 parties to the proceedings. The expenses comprise: Travel 144,827 95,972 Total administrative services and facilities 8,332,714 6,794,722 2014 2013 Amortization expense 69,768 118,495 Arbitrators’ fees and expenses $ 22,387,949 $ 20,333,932 Total recorded value of services provided by IBRD 8,402,482 6,913,217 Arbitration/conciliation meeting costs 4,663,998 2,757,092 Less: ICSID reimbursement 5,397,642 4,064,553 Travel expenses 297,996 301,050 In-kind contributions $ 3,004,840 $ 2,848,664 Other costs 166,270 121,622 Total $ 27,516,213 $ 23,513,696 Note 11 — Authorization of Financial Statements ICSID’s management has evaluated subsequent events through August 27, 2014, the date the financial statements were approved and authorized for issue. 66 | ICSID ANNUAL REPORT 2014 | 67 KPMG LLP Suite 12000 1801 K Street, NW Washington, DC 20006 Independent Auditors’ Report Chairman of the Administrative Council and Secretary General of the International Centre for Settlement of Investment Disputes: We have audited the accompanying financial statements of the International Centre for Settlement of Investment Disputes, which comprise the statements of financial position as of June 30, 2014 and 2013, and the related statements of activities and cash flows for the years then ended, and the related notes to the financial statements. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America and International Financial Reporting Standards as issued by the International Accounting Standards Board; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of the financial statements that are free from material misstatement, whether due to fraud or error. Auditors’ Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and International Standards on Auditing. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the International Centre for Settlement of Investment Disputes as of June 30, 2014 and 2013, and the results of its operations and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America and International Financial Reporting Standards as issued by the International Accounting Standards Board. August 27, 2014 KPMG LLP is a Delaware limited liability partnership, the U.S. member firm of KPMG International Cooperative (“KPMG International”), a Swiss entity. 68 | ICSID 1818 H STREET, NW WASHINGTON, D.C. 20433 USA TELEPHONE (202) 458 1534 FACSIMILE (202) 522 2615 EMAIL ICSIDsecretariat@worldbank.org WEBSITE www.worldbank.org/icsid