This is a big step forward for the development of the institution of mediation. This means that the institution of mediation is recognized at the interstate level as a convenient and effective tool for resolving a dispute.
In 1965, the Washington Convention on the Procedure for Settling Investment Disputes between States and Foreign Persons was adopted (Russia joined it, but did not ratify it).
The Convention established the International Center for the Settlement of Investment Disputes. The parties may choose this center to resolve an international dispute through arbitration.
To resolve disputes through arbitration, the parties may choose arbitrators of different nationalities. The most popular arbitrators are from France, USA and UK, Canada, Switzerland, Spain, Germany and Australia (listed in descending order).
Unfortunately, (this may have something to do with the geography of the disputes, as well as the fact that Russia has not ratified the Washington Convention), for the entire period of ICSID's work, arbitrators have not had to come from Russia. But this situation can be changed by the parties themselves.
In total, 869 cases were registered at ICSID during its work. 98.5% of disputes are resolved (or are being considered) by arbitration, and only 1.5% of disputes were referred to the conciliation procedure. ICSID realized that the conciliation procedure was not suitable for investment disputes. Until 2018, ICSID offered parties arbitration or conciliation. In 2018, ICSID began developing mediation rules for investment disputes.
The mediation procedure through ICSID is open to everyone. In order to use it, the country does not need to be a party to the Washington Convention.
Any person chosen by the parties can be a mediator. The parties may choose a mediator from Russia or several mediators of different nationalities to settle an international dispute.
The parties may also contact ICSID for recommendations on candidate mediators.
ICSID offers rules for the mediation of investment disputes and administrative support, that is, it provides mediation sessions, exchange and storage of correspondence on the case, and provides secretarial services.
Mediation is a dialogue between disputing parties. Mediation can be used whenever negotiations between the parties go through difficulties. Thus, mediation is not limited to the time the dispute arises. It can be used throughout the investment life cycle to resolve any disputes.
The differences between the mediation procedure and the ICSID conciliation procedure are as follows:
1) The mediation procedure is open to everyone without any national restrictions and requirements for membership in ICSID, that is, parties from the same country can also use these rules,
2) The mediator does not resolve the issue of the jurisdiction of the dispute, therefore, there can be no objections to jurisdiction,
3) Strictly speaking, the mediator does not resolve legal issues at all, he/she only contributes to reaching a compromise, while the role of the conciliation commission is to clarify controversial issues,
4) The mediator is not entitled to issue any recommendations without the consent of the parties,
5) The mediation process is less formal, the mediator does not issue any instructions, decisions or determinations,
6) A party may at any time refuse to participate in mediation,
7) Information about the ongoing mediation is not published on the ICSID website (unlike the conciliation procedure), that is, it is a completely confidential procedure.
The difference lies in the cost of the procedure.
For arbitration and conciliation administration services, ICSID charges a fee of USD 42,000 per year (divided by the number of parties to the dispute).
The administrative fee includes the use of ICSID premises for negotiations and hearings (in Washington, in the World Bank building). If the hearing takes place elsewhere, the parties pay that separately.
For support in administering mediation, ICSID charges $200 per hour for the work of an ICSID case officer. An additional fee of $200 per hour will be charged if the hearing or meeting is not taking place on ICSID premises and the presence of an ICSID secretary is required.
Hourly rates of mediators, translation services, case reports, catering, video conferences, couriers are paid separately.
Rules link: https://icsid.worldbank.org/sites/default/files/documents/ICSID_Mediation.pdf
The Solis Mediation Center invites you to discuss the new ICSID rules at the Investment Dispute Mediation business breakfast, which will be held in Moscow on 4 September 2022. For more information about the event, please follow the link: https://www.solismediation.com/tpost/1pdis0s6y1-business-breakfast-mediation-of-investme
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