2020 Annual Report Excellence in Investment Dispute Resolution ABOUT ICSID ICSID is an international facility available to States and foreign investors for the resolution of investment disputes. Established in 1966 by the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (the ICSID Convention), it is the only global institution dedicated to international investment dispute settlement. Through its specialized rules of procedure, world-class facilities, and expert legal and administrative support, ICSID provides unparalleled dispute resolution services to States and investors. Since the first case was registered with ICSID in 1972, the majority of all known international investment disputes have been administered by ICSID. 2 0 2 0 I C S I D A N N UA L R E P ORT iii Letter of Transmittal September 21, 2020 Mr. David R. Malpass Chair, Administrative Council International Centre for Settlement of Investment Disputes Dear Chair Malpass, I am pleased to submit the Annual Report on the operation of the International Centre for Settlement of Investment Disputes for approval by the Administrative Council. This Annual Report covers the fiscal year from July 1, 2019 to June 30, 2020. The Report includes the audited financial statements of the Centre, presented pursuant to Administrative and Financial Regulation 19. Yours sincerely, Meg Kinnear Secretary-General iv EXCELL EN CE I N I N V ESTM EN T D I S P UT E R ES OLU T I ON Contents Letter of Transmittal iv Message from the Secretary-General 3 Message from the Chair 5 ICSID Secretariat 6 Membership 11 Panels of Arbitrators and of Conciliators 14 Caseload Trends 19 Spotlight on Technology 32 Outreach and Training 34 Fifty-Third Annual Meeting 43 Finance 44 List of Member States 61 2 0 2 0 I C S I D A N N UA L R E P ORT 1 Meg Kinnear, Secretary-General of ICSID. © ICSID Meg Kinnear ICSID Secretary-General 2 EXCELL EN CE I N I N V ESTM EN T D I S P UT E R ES OLU T I ON Message from the Secretary-General Fiscal year 2019–2020 has been an extraordinary Yet for all the focus on technology, the human year, at times posing challenges that none of us had element has been just as important to our contemplated at the start of the year. In particular, achievements. the immense economic upheaval caused by the One of ICSID’s first virtual hearings during the COVID-19 pandemic has underscored the much- pandemic featured tribunal members, counsel, needed stability that is fostered by international witnesses and experts spread-out across two legal frameworks and multilateral institutions. My continents. Originally planned for ICSID’s hearing colleagues at the World Bank Group have moved centre in Paris, the ICSID Secretariat and with remarkable speed to help over 100 countries participants quickly organized this virtual hearing strengthen their emergency response and health in less than a week. care systems. Beyond that, the challenge of building as robust a recovery as possible lies ahead of us. Shortly after, the tribunal members, counsel for both parties, and the tribunal secretary convened As a part of the World Bank Group, ICSID has also an online event to share their insights from the been committed to the emergency response and hearing. It was an admirably frank discussion on will be part of addressing the recovery in the organizing a successful online hearing—one that months to come. The closing of our offices in March moved from the nuts-and-bolts of screens, 2020 pushed us to find new ways of doing headsets and microphones, to effective advocacy business so that we could continue to provide our techniques in an online setting. The event was one usual services and facilities in a seamless manner. of many examples over the past year of counsel, Overnight, all filings went to electronic format and arbitrators and institutions sharing knowledge on awards and decisions were issued electronically. how to overcome the barriers imposed by the In-person hearings scheduled for ICSID’s hearings pandemic—for the benefit of the entire dispute centres in Washington, D.C. and Paris—and many resolution community. other venues around the world—have been held virtually. From real-time court reporting to A highlight of last year’s report was Djibouti’s simultaneous interpretation, the essential features signing of the ICSID Convention. I am pleased to of an ICSID hearing have been brought to our update that Djibouti deposited its instrument of secure video-conferencing platforms. ratification with the World Bank on June 9, 2020, thereby becoming the 155th ICSID Member State. Our success in this endeavor is a credit to the I very much look forward to working with Djibouti dedication, ingenuity, and flexibility of tribunals, as it takes its seat on the Administrative Council. counsel and the ICSID Secretariat. From home offices, kitchens and living rooms around the Other important work of ICSID has also continued globe, ICSID’s 303 pending cases have continued to advance over the past year. High on this list is to advance—while 40 new cases were added to the project of amending ICSID’s procedural rules. the ICSID docket over the fiscal year. Following a consultation with Member States in Meg Kinnear, Secretary-General of ICSID. © ICSID 2 0 2 0 I C S I D A N N UA L R E P ORT 3 World Bank Group Headquarters. © World Bank November 2019, ICSID released its fourth working Taken in sum, the last year has been one of paper on the amended rules in February 2020. I am remarkable progress in the face of immense pleased to say that the updated rules are close to challenges. None of this would have been possible completion and should be ready for adoption by without the dedication and talent of ICSID staff, Member States in 2021. and I thank them sincerely for their efforts. In May 2020, ICSID and UNCITRAL also published The road to recovery from the pandemic is a draft Code of Conduct for Adjudicators, and I undoubtedly daunting. But ICSID remains look forward to the discussion with State dedicated to playing its role—together with its representatives and the broader legal profession membership, clients, and sister organizations in on the Code. the World Bank Group—in encouraging the much-needed investment for sustainable and ICSID continues to see great demand for inclusive growth and a robust recovery in the capacity building services. While these courses coming months. have also moved to online formats in 2020, they have remained available to ICSID’s Member States and practitioners. In the course of FY2020, ICSID participated in over 100 events and courses around the world. Meg Kinnear, Secretary-General, ICSID 4 EXCELL EN CE I N I N V ESTM EN T D I S P UT E R ES OLU T I ON Message from the Chair Over the past year, ICSID has made substantial disputes. Its goal: to encourage the flow of cross- progress with its Member States to further border investment for development by ensuring a modernize its procedural rules for arbitration, peaceful means to address disputes between conciliation, mediation and fact-finding. States and foreign investors. Today, ICSID’s mission Additionally, ICSID has been leveraging is more relevant than ever. The need to maximize technology to transform how cases are private investment to end extreme poverty and conducted—from fully electronic filing to virtual boost shared prosperity has only grown in urgency hearings. In sum, ICSID has been adapting its as we confront the immense health, economic and services in ways that meet the current needs of social damage caused by COVID-19. States and investors, avoid fragmentation of the investor-State dispute settlement system, and remain true to its original mission. David Malpass ICSID is the only multilateral institution dedicated President, World Bank Group to the resolution of international investment Chair, ICSID Administrative Council David Malpass, President, World Bank Group. © World Bank 2 0 2 0 I C S I D A N N UA L R E P ORT 5 ICSID Secretariat The ICSID Secretariat carries out the day-to-day by Member States, providing courses on request, operations of the Centre. Its composition and and publishing guidance notes on ICSID principle functions are set out in the ICSID practices and procedures. Convention (Articles 9 to 11) and the Administrative The Secretariat plays an important role in and Financial Regulations. The ICSID Secretariat is publishing data on ICSID cases, and fostering led by the Secretary-General, who is assisted by awareness of international investment dispute two Deputy Secretaries-General. settlement more broadly. ICSID maintains an The majority of staff are dedicated to providing information-rich website, including databases on professional administrative and financial services cases, membership, and arbitrators, conciliators to cases. A case management team is assigned to and committee members. Since 1986, ICSID has each case, led by an experienced legal counsel and also published the world’s leading journal on assisted by paralegals and legal assistants. A international investment law, the ICSID Review— financial and administrative team oversees the Foreign Investment Law Journal. financial aspects of cases, as well as the ICSID The ICSID Secretariat is amongst the most budget. It also handles ICSID’s archives, human diverse organizations in the World Bank Group. resources and information technology. Seventy-five percent of the Secretariat are The Secretariat also supports ICSID women, across all levels and roles. ICSID’s 64 stakeholders. This includes maintaining up-to- staff members represent 24 nationalities and are date lists of notifications and designations made fluent in 25 languages. 6 EXCELL EN CE I N I N V ESTM EN T D I S P UT E R ES OLU T I ON 64 24 25 ICSID STAFF NATIONALITIES LANGUAGES 2 0 2 0 I C S I D A N N UA L R E P ORT 7 SECRETARIAT STAFF AS OF JUNE 30, 2020 SECRETARY-GENERAL Alicia Martín Blanco Meg Kinnear Sara Marzal Marco Tulio Montañés-Rumayor DEPUTY SECRETARY-GENERAL Leah W. Njoroge Gonzalo Flores Marisa Planells-Valero Martina Polasek Ella Rosenberg Celeste Salinas Quero LEGAL STAFF Luisa Fernanda Torres Anna Toubiana SENIOR LEGAL ADVISER Milanka Kostadinova LEGAL COUNSEL— INSTITUTIONAL MATTERS Daniela Argüello TEAM LEADER/LEGAL COUNSEL Randi Ayman Aurélia Antonietti Celeste Mowatt Jara Mínguez Almeida Paul-Jean Le Cannu PARALEGAL, ADMINISTRATIVE AND Frauke Nitschke CLIENT SUPPORT STAFF Natalí Sequeira PARALEGAL LEGAL COUNSEL Jacqueline G. Argueta Francisco Abriani Vanina L. Bauza Laura Bergamini Colleen Ferguson Jonathan Chevry Ivania Fernández Ana Conover Ayling Kocchiu Mercedes Cordido-Freytes de Kurowski Ekaterina Minina Aïssatou Diop Phoebe Ngan Geraldine Fischer Céline Pommier Benjamin Garel Maria-Rosa B. Rinne Francisco J. Grob Federico Salon Kajganich Anna Holloway Elizabeth Starkey Alex B. Kaplan Marisela Vázquez Marrero Catherine Kettlewell Veronica Lavista 8 EXCELL EN CE I N I N V ESTM EN T D I S P UT E R ES OLU T I ON LEGAL ASSISTANT FINANCIAL OFFICER Alix Ahimon Azeb Debebe Mengistu Paula Carazo Dante Herrera Guzmán FINANCIAL ANALYST Lanny Isimbi Walter Meza-Cuadra Jennifer Ann Meléndez Cynthia Nyaoro Mayra A. Román HEARINGS AND EVENTS ORGANIZER ADMINISTRATIVE ASSISTANT TO Lamiss Al-Tashi SECRETARY-GENERAL Cindy Ayento COMMUNICATIONS OFFICER Damon Vis-Dunbar PROGRAM ASSISTANT Sherri Akanni INFORMATION TECHNOLOGY ANALYST Anita Chen Patricia V. Romero RECEPTIONIST FINANCIAL AND GENERAL Rachel Evangelista ADMINISTRATION STAFF RECORDS ASSISTANT TEAM LEADER/SR. PROGRAM OFFICER Sebastian Shepherd Javier Castro 2 0 2 0 I C S I D A N N UA L R E P ORT 9 10 EXCELL EN CE I N I N V ESTM EN T D I S P UT E R ES OLU T I ON Membership By the end of FY2020, ICSID numbered 163 signatories to the ICSID Convention, of which 155 are Contracting States to the Convention. Membership has been expanding since ICSID’s establishment in 1966, reflecting its global relevance and role as the only institution with a primary mandate to support the resolution of international investment disputes. The Republic of Djibouti is the newest Contracting State, having deposited its instrument of ratification with the World Bank on June 9, 2020. All Contracting States are equally represented on the ICSID Administrative Council. As ICSID’s governing body, the Administrative Council adopts the Centre’s annual budget, elects the Secretary-General and Deputy Secretaries-General, and approves the annual report. Contracting States also have the right to propose and vote on amendments to the ICSID Convention and Rules, as well as to designate individuals to the ICSID Panels of Arbitrators and of Conciliators (see page 14 for further information on the Panels). Republic of Djibouti signs the ICSID Convention. © World Bank 2 0 2 0 I C S I D A N N UA L R E P ORT 11 ICSID Contracting and Signatory States as of June 30, 2020 Contracting States to the ICSID Convention Signatory States to the ICSID Convention This map was produced by the Cartography Unit of the World Bank  Group. The boundaries, colors, denominations and any other information  shown on this map do not imply, on the part of the World  roup, any judgment on the legal status of any territory, or any  Bank G endorsement or acceptance of such boundaries. 12 EXCELL EN CE I N I N V ESTM EN T D I S P UT E R ES OLU T I ON 2 0 2 0 I C S I D A N N UA L R E P ORT 13 Panels of Arbitrators and of Conciliators The ICSID Panel of Arbitrators and Panel of ARMENIA Conciliators are important components of the ICSID dispute resolution system. When the Panels of Arbitrators and of Conciliators Chairman of the Administrative Council is called Designations effective January 24, 2020: upon to appoint arbitrators, conciliators or ad hoc Grant Hanessian, Levon Gevorgyan committee members under Articles 30, 38 or 52 Panels of Arbitrators and of Conciliators of the ICSID Convention, these appointees are Redesignations effective January 24, 2020: drawn from the Panels. The Panels also provide a Yeghishe Kirakosyan, Thomas J. Samuelian diverse and qualified pool of arbitrators and conciliators for parties to consider when making appointments in ICSID cases. BAHAMAS Panels of Arbitrators and of Conciliators Each Member State may designate up to four Redesignations effective January 15, 2020: persons to each of the Panel of Arbitrators and the Bertha Cooper-Rousseau, Caryl Lashley, Panel of Conciliators (Articles 12 to 16 of the ICSID Rubie Nottage Convention). In addition, the Chairman of the ICSID Administrative Council may designate up to ten BOTSWANA persons to each Panel. The designees may be nationals or non-nationals of the designating State Panels of Arbitrators and of Conciliators and are nominated for a renewable six-year term. Designations effective September 23, 2019: Edward William Fashole Luke, Athaliah Lesiba ICSID has been encouraging Member States to Molokomme, Sanji Mmasenono Monageng make designations of open positions on the list, with great success. During FY2020, 22 ICSID CHAD Contracting States made 90 designations to the Panels of Conciliators and Arbitrators ICSID Panels: Armenia, Bahamas, Botswana, Designations effective April 22, 2020: Chad, Denmark, Georgia, Germany, Greece, Mbaigangnon Athanase, Stephane Broquet, Guatemala, Hungary, Ireland, Kuwait, Latvia, Victoire Kolingar-Lhermenier, Yenan Timothee Madagascar, Mongolia, Mozambique, Sierra Leone, Slovak Republic, Somalia, Spain, Sweden, and Uruguay. DENMARK Panels of Arbitrators and of Conciliators By the end of FY2020, there were 687 individuals Redesignations effective August 19, 2019: on the ICSID Panels of Arbitrators and of Jan Schans Christensen, Per Magid, Mogens Conciliators. A complete list of ICSID Panel Skipper-Pedersen, Jon Ulrik Stokholm nominees is available on the ICSID website. The names of designees to the ICSID Panels made in FY2020 follow. 14 EXCELL EN CE I N I N V ESTM EN T D I S P UT E R ES OLU T I ON Hearing in the case of Gramercy Funds Management LLC and Gramercy Peru Holdings LLC v. Republic of Peru, Washington, D.C. © ICSID 2 0 2 0 I C S I D A N N UA L R E P ORT 15 GEORGIA GUATEMALA Panels of Arbitrators and of Conciliators Panel of Arbitrators Redesignation effective February 27, 2020: Designation effective June 25, 2020: Paul Friedland Julio Roberto Bermejo Quiñonez Panel of Arbitrators Redesignations effective February 27, 2020: HUNGARY Rolf Knieper, Brigitte Stern Panel of Arbitrators Designations effective May 11, 2020: GERMANY David Kohegyi, Andras Nemescsoi Panel of Arbitrators Panel of Arbitrators Designations effective September 12, 2019: Redesignations effective May 11, 2020: Patricia Nacimiento, Stephan Schill, Janos Martonyi, Attila Menyhard Franco Ferrari Panel of Conciliators Panel of Arbitrators Designations effective May 11, 2020: Redesignation effective September 12, 2019: Csongor Istvan Nagy, Katalin Raffai, Csaba Sabine Konrad Rusznak, Reka Somssich Panel of Conciliators IRELAND Designations effective December 15, 2019: Joachim Knoll, Steffen Hindelang Panel of Arbitrators Designations effective January 22, 2020: Panel of Conciliators Louise Reilly, Patrick Leonard Redesignations effective December 15, 2019: Anke Meier, Sebastian Seelmann-Eggebert Panel of Arbitrators Redesignations effective January 22, 2020: Colm Ó Hoisín, James Bridgeman GREECE Panel of Conciliators Panel of Conciliators Redesignation effective February 4, 2020: Designations effective January 22, 2020: Chariton Harry Kyriazis Susan Ahern, Klaus Reichert Panel of Conciliators Panel of Conciliators Designations effective February 4, 2020: Redesignations effective January 22, 2020: Zoe Giannopoulou, Lazaros Panourgias, Ercus Stewart, Patricia Moran Aphrodite Vassardani KUWAIT Panel of Arbitrators Designations effective February 4, 2020: Panels of Arbitrators and of Conciliators Nikolas Kanellopoulos, Glykeria Sioutis, Designations effective February 10, 2020 Loannis Vassardanis, Dimitris Ziouvas Ahmed Ghazi Al Abduljaleel, Shahad Khaled Al Muhaini*, Abeer Sahib A. Al Rasheed 16 EXCELL EN CE I N I N V ESTM EN T D I S P UT E R ES OLU T I ON LATVIA SOMALIA Panels of Arbitrators and of Conciliators Panel of Conciliators Redesignations effective February 24, 2020: Designation effective May 6, 2020: Inga Kačevska, Eva Kalniņa, Mārtiņš Paparinskis, Guled Yusuf Ziedonis Ūdris SPAIN MADAGASCAR Panel of Arbitrators Panels of Arbitrators and of Conciliators Designations effective February 4, 2020: Designations effective June 2, 2020: Deva Villanua Gomez, Manuel Conthe Gutierrez, Lalaoniaina Odile Andrianarisoa, Raphael Jakoba, Antonio Hierro Hernandez-Mora, Josiane Marie Chantal Razafinarivo, Rivoniaina Carmen Nunez-Lagos Razafindrakoto Panel of Conciliators Designations effective February 4, 2020: MONGOLIA Katia Fach Gomez, Javier Fernandez Samaniego, Panel of Arbitrators Gonzalo Stampa Casas, Mercedes Tarrazon Rodon Redesignation effective March 12, 2020: Michael D. Nolan SWEDEN Panel of Arbitrators MOZAMBIQUE Designations effective March 11, 2020: Panels of Arbitrators and of Conciliators Christer Danielsson, Jakob Ragnwaldh, Designation effective January 24, 2020: Johan Sidklev Angelo Matusse Panel of Arbitrators SIERRA LEONE Redesignation effective March 11, 2020: Kaj Hobér Panels of Arbitrators and of Conciliators Designation effective January 20, 2020: Panel of Conciliators Patrick Pearsall Designations effective March 11, 2020: Charlotta Falkman, Therese Isaksson, Aisha SLOVAK REPUBLIC Nadar, Eric M. Runesson Panel of Arbitrators URUGUAY Designations effective December 27, 2019: Stephen P. Anway Panel of Arbitrators Designations effective August 19, 2019: Panels of Arbitrators and of Conciliators Paul Arrighi Bustamante, Fernando Jiménez de Redesignations effective December 27, 2019: Aréchaga Peter Tomka, Václav Mikulka * Pending acceptance 2 0 2 0 I C S I D A N N UA L R E P ORT 17 Hearing in the case of Eco Oro Minerals Corp. v. Republic of Colombia, Washington, D.C. © ICSID 18 EXCELL EN CE I N I N V ESTM EN T D I S P UT E R ES OLU T I ON ICSID Caseload Trends ICSID is the premiere global institution for the resolution of international investment disputes, having administered the vast majority of all known international investment cases. Highlights in FY2020 include a record number of concluded cases, as ICSID continues to work with tribunals and parties to reduce the time and cost of proceedings. Also notable over the fiscal year was progress in enhancing the diversity of arbitrators, conciliators and ad hoc committee members appointed to ICSID cases. A record 44 nationalities were represented amongst the appointments made in FY2020. 40 68 NEW CASES REGISTERED PROCEEDINGS CONCLUDED 303 CASES ADMINISTERED 2 0 2 0 I C S I D A N N UA L R E P ORT 19 CASES ADMINISTERED AND REGISTERED IN FY2020 A total of 303 ICSID cases were administered administered 768 cases under the ICSID in FY2020. This constitutes the second highest Convention and Additional Facility Rules since number of cases ever administered at ICSID in the first case was registered in 1972. a single fiscal year. Overall, ICSID has ICSID ADMINISTERED CASES BY FISCAL YEAR 350 306 303 300 279 250 243 247 258 209 195 200 172 145 154 154 159 118 130 150 103 100 85 63 50 0 FY2003 FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 FY2020 ICSID CASES ADMINISTERED BY THE SECRETARIAT (FY2003–FY2020) A total of 40 new ICSID cases were registered in followed by arbitrations invoking the Additional the fiscal year. The majority were arbitrations Facility Rules (three cases). instituted under the ICSID Convention (37 cases), 20 EXCELL EN CE I N I N V ESTM EN T D I S P UT E R ES OLU T I ON CASES REGISTERED UNDER THE ICSID CONVENTION AND ADDITIONAL FACILITY IN FY2020 50 ICSID Conv ntion Arbitr tion C s s 40 37 ICSID Addition l F cilit Arbitr tion C s s 30 20 10 3 0 In addition, the number of investment cases As in previous years, the majority of cases were administered by ICSID under non-ICSID sets of instituted on the basis of bilateral or multilateral rules continues to grow, in particular those of the treaties. Twenty-five cases asserted ICSID United Nations Commission on International Trade jurisdiction on the basis of a bilateral investment Law (UNCITRAL). In total, ICSID provided a range treaty, and seven were brought on the basis of the of services for 21 cases governed by non-ICSID Energy Charter Treaty. In addition, two cases were rules in FY2020, compared to 17 in FY2019 and instituted under the U.S.-Colombia Trade eight in FY2018. In the majority of these cases Promotion Agreement and in one case the investor (16), ICSID provided full administrative services. In sought to establish ICSID jurisdiction on the basis some of these cases, ICSID also acted as of the North American Free Trade Agreement. For appointing authority. In the other five cases, ICSID the first time, two cases were brought on the basis assisted with hearings. of the U.S.-Peru Trade Promotion Agreement. A further five cases were based on contracts BASIS OF CONSENT TO ICSID between an investor and host State, and two PROCEEDINGS cases were brought on the basis of investment Arbitration and conciliation under the ICSID laws. Two cases relied, respectively, on two bases Convention and Additional Facility Rules are for jurisdiction and one case invoked three bases voluntary, and parties provide consent to ICSID to establish jurisdiction. jurisdiction in a variety of investment laws, contracts, and bilateral or multilateral treaties that they have concluded. 2 0 2 0 I C S I D A N N UA L R E P ORT 21 BASIS OF CONSENT TO ESTABLISH JURISDICTION IN FY2020 U.S.-Colombia Trade Promotion Agreement 4% 2% North American Free Trade Agreement U.S.-Peru Trade Promotion Agreement 5% 57% Bilateral Investment Treaty Investment Law of the Host-State 5% Investment Contract between the Investor and the Host-State 11% Energy Charter Treaty 16% STATE PARTIES TO ICSID PROCEEDINGS cases were fairly evenly spread among Western Europe (13%), the Middle East and North Africa States from every geographic region of the world (10%), and Sub-Saharan Africa (10%). A further 7% were involved in ICSID proceedings in FY2020. of newly registered cases involved the Central Thirty-two percent of newly registered cases America and Caribbean region, followed by 5% in involved States in South America, followed by North America, and 3% in South and East Asia 20% in Eastern Europe and Central Asia. New and the Pacific region. 22 EXCELL EN CE I N I N V ESTM EN T D I S P UT E R ES OLU T I ON DISTRIBUTION OF CASES REGISTERED IN FY2020 BY REGION 13% Western Europe Eastern Europe & Central Asia 20% 10% Middle East & North Africa 10% Sub-Saharan Africa South America 32% 7% Central America & the Caribbean 5% North America (Canada, Mexico & U.S.) South & East Asia & the Pacific 3% 2 0 2 0 I C S I D A N N UA L R E P ORT 23 DISTRIBUTION OF CASES REGISTERED IN FY2020 BY COUNTRY Lithuania 1 2 Romania Norway 1 1Azerbaijan Germany 1 1Georgia 2 Italy 1 Spain 1Egypt 1 Iraq 1 China Algeria 1 Mexico 2 1 Dominican Republic 2 Venezuela 1 Panama 2 Colombia5 Cameroon 1 Saudi Arabia DR Congo 1 Peru 5 1 Sierra Leone 1 Zambia 1 Argentina Croatia 3 1 Serbia North America (Canada, Mexico & U.S.) South America Eastern Europe & Central Asia Sub-Saharan Africa Central America & the Caribbean Western Europe Middle East & North Africa South & East Asia & the Pacific 24 EXCELL EN CE I N I N V ESTM EN T D I S P UT E R ES OLU T I ON ECONOMIC SECTORS INVOLVED IN continued in FY2020. Thirty percent of new cases NEW CASES involved the oil, gas and mining industry, and 20% The economic sectors involved in ICSID related to electric power and other energy proceedings are also diverse. Historically, the sources. Also prominent were disputes involving extractives and energy sectors have accounted the construction sector, which accounted for 17% for the largest share of cases, and this trend of cases registered in the fiscal year. DISTRIBUTION OF CASES REGISTERED IN FY2020 BY ECONOMIC SECTOR 20% Electric Power & Other Energy Oil, Gas & Mining 30% 17% Construction Services and Trade 3% Agriculture, Fishing & Forestry 3% Transportation 5% Other Industry 5% 10% Information & Communication Finance 7% 2 0 2 0 I C S I D A N N UA L R E P ORT 25 CONSTITUTION OF COMMISSIONS, applicable default provisions. In total, ICSID acted TRIBUNALS AND AD HOC COMMITTEES as appointing authority 77 times in FY2020. A total of 211 appointments were made to ICSID tribunals, commissions and ad hoc DIVERSITY OF APPOINTMENTS committees in FY2020. This represents the ICSID continues to see progress in the diversity of second highest number of appointments made arbitrators, conciliators and committee in ICSID’s history. These appointments were members. Individuals of 44 nationalities were made to 45 tribunals in original arbitrations represented amongst the appointments made in and 19 ad hoc committees. In addition, one the fiscal year. This is the greatest nationality conciliation commission was constituted and diversity in arbitrator appointments in a single 16 appointments were made in reconstitutions year at ICSID. of tribunals, conciliation commissions and ad hoc committees. Moreover, 15% were appointed for the first time to an ICSID case, thereby representing a significant Sixty-four percent of appointments were made number of new entrants to the field. Notably, 42% either by the parties or by the party-appointed of first-time appointees in FY2020 involved arbitrators, while the remaining 36% were made by nationals of low or middle income countries, and ICSID based on agreement of the parties or the 19% were women. GEOGRAPHIC DISTRIBUTION OF APPOINTMENTS BY ICSID AND THE PARTIES IN FY2020 60 51 50 40 32 30 28 23 20 15 11 11 12 10 4 6 5 4 5 3 1 0 0 Western Europe North America South America South & East Asia Middle East & Sub-Saharan Eastern Europe Central America (Canada, & the Pacific North Africa Africa & Central Asia & the Caribbean Mexico & U.S.) Appointm nts b ICSID Appointm nts b th P rti s (or P rt - ppoint d Arbitr tors or Concili tors) 26 EXCELL EN CE I N I N V ESTM EN T D I S P UT E R ES OLU T I ON STATE OF NATIONALITY OF ARBITRATORS, CONCILIATORS AND AD HOC COMMITTEE MEMBERS APPOINTED IN FY2020 Argentina France United Kingdom 15 United States of America Mexico 12 Australia Canada 9 Spain Singapore 8 Netherlands Switzerland 6 Finland Germany 5 Korea, Rep. of Argentina/Spain Colombia 4 Italy Bulgaria Egypt 3 STATE OF NATIONALITY OF APPOINTEE Guatemala Mexico/Germany Portugal Australia/Ireland Austria Belgium Chile France/Lebanon France/Sweden Ireland Ireland/United States of America Lebanon/Chile 2 Malta/South Africa Pakistan Peru Peru/Switzerland United Kingdom/Italy United Kingdom/Nigeria Algeria/France Argentina/United States of America Bahamas Brazil Brazil/Switzerland Burundi Cameroon Canada/United Kingdom China El Salvador France/Switzerland 1 Mexico/United States of America Morocco Nigeria Paraguay Romania South Africa United Kingdom/Iran Uruguay/France NUMBER OF APPOINTMENTS 2 0 2 0 I C S I D A N N UA L R E P ORT 27 ICSID appointed 53% of female appointees in female appointments were made jointly by the FY2020, respondents appointed 34%, and parties. No female appointments were made by claimants appointed 3%. The remaining 10% of co-arbitrators. MEN AND WOMEN APPOINTED BY ICSID AND PARTIES 120 120 100 80 61 60 40 20 16 14 0 Men Women Appointm nts b ICSID Appointm nts b th P rti s (or P rt - ppoint d Arbitr tors) LOCATION AND LANGUAGE OF In FY2020, 201 cases were conducted in English PROCEEDINGS (68%), 16 in Spanish (5%) and seven in French In the course of the fiscal year, 165 sessions or (2%). Seventy-three proceedings were conducted hearings were held in the cases administered by simultaneously in two languages (25%), with the ICSID. FY2020 saw a significant increase of English-Spanish combination continuing to be sessions and hearings being held remotely (70%), the most frequent. using ICSID’s state-of-the-art audio and video- conferencing services. The rest were held in- AWARDS RENDERED AND person at the seat of the Centre in Washington, DECISIONS ISSUED D.C., at the World Bank offices in Paris, or at other During the fiscal year, 35 awards were rendered venues as agreed by the parties. and 467 decisions and procedural orders were issued. The Centre publishes these rulings on its 28 EXCELL EN CE I N I N V ESTM EN T D I S P UT E R ES OLU T I ON website with the parties’ permission. Where a for post-award remedies under the ICSID party withheld permission to publish awards, the Convention. These included four requests for Centre published excerpts of the legal reasoning rectification of an award, one request for a of the tribunal or ad hoc committee, as required tribunal to supplement its award, and one by the ICSID Rules, or included bibliographic request for revision of an award. In addition, 19 references to rulings made public by other sources annulment applications were registered during on ICSID’s website and in its publications. the year, which largely reflects the increased number of awards rendered in the previous year. POST-AWARD REMEDIES Fourteen of these applications were brought by the respondent and five by the claimant in the Limited post-award remedies are available to original proceeding. the parties in ICSID proceedings. In FY2020, the Centre registered 25 applications and requests AWARDS RENDERED AND OUTCOMES IN ANNULMENT PROCEEDINGS UNDER THE ICSID CONVENTION, BY DECADE 250 213 200 150 96 100 53 50 18 24 4 9 3 0 13 8 5 7 0 0 0 1 0 1 1 0 1971–1980 1981–1990 1991–2000 2001–2010 2011– Numb r of Conv ntion w rds r nd r d Numb r of d cisions r j ctin th pplic tion for nnulm nt Numb r of d cisions nnullin th w rd in p rt or in full Numb r of nnulm nt proc din s discontinu d 2 0 2 0 I C S I D A N N UA L R E P ORT 29 CASES CONCLUDED IN FY2020 Forty-five original arbitration proceedings were concluded in FY2020. Twelve of these were A record 68 proceedings concluded in FY2020, settled or otherwise discontinued, and 33 were compared to 59 concluded proceedings in decided by the tribunal. FY2019. ARBITRATION PROCEEDINGS UNDER THE ICSID CONVENTION AND AF—OUTCOMES IN FY2020 Dispute decided by Tribunal 74% 26% Dispute settled or proceeding otherwise discontinued Of the cases decided by tribunals, four awards claims in part or in full. One award embodied the declined jurisdiction, two awards decided that parties’ settlement, 10 cases were discontinued the claims were manifestly without legal merit, at the request of one or both parties, and one 12 awards rejected all of the investors’ claims on case was discontinued for lack of payment of the merits, and 15 awards upheld the investors’ the required advances. 30 EXCELL EN CE I N I N V ESTM EN T D I S P UT E R ES OLU T I ON ARBITRATION PROCEEDINGS UNDER THE ICSID CONVENTION AND AF—TRIBUNAL RULINGS, SETTLEMENT AND DISCONTINUANCES Proceeding discontinued Award dismissing all claims 26% 18% at the request of both parties 9% Award declining jurisdiction Award upholding claims in part or in full 35% Award declining that claims are 4% manifestly without legal merit Proceeding discontinued at 4% the request of one party Proceeding discontinued for lack of Settlement agreement embodied 2% payment of the required advances 2% in an award at parties’ request In addition, 23 post-award proceedings were rejected the application for annulment, one concluded. This includes four rectification committee annulled the award in full, three proceedings, three revision proceedings and one annulment proceedings were discontinued for resubmission. In addition, 15 annulment lack of payment of the required advances, and proceedings were concluded in FY2020. In nine two annulment proceedings were discontinued of these proceedings, ad hoc committees at the request of both parties. 2 0 2 0 I C S I D A N N UA L R E P ORT 31 Spotlight on Technology Evolving technology has always influenced how HEARING OPTIONS AT ICSID cases are conducted and administered at ICSID. ICSID hearings are tailored to the needs of the However, the pace of change is not always uniform. parties and tribunals. Many different And over the past year, the need to safeguard the configurations are available. As a starting point, it health of participants in ICSID cases in the midst of is helpful to consider three primary set-ups. the COVID-19 pandemic has quickened the transition to technological solutions. This is 1. IN PERSON exemplified in two developments over the past year. First, ICSID announced that electronic filing was its In this scenario, the tribunal and parties gather default procedure, and decisions and awards would at ICSID’s hearing centres in Washington, D.C. be issued electronically. Second, hearings and or Paris, in one of the 138 offices of the World sessions were moved to virtual formats. Bank Group, or at the facilities of one of the many dispute resolution institutions with The fact that ICSID was able to pivot so quickly which ICSID has entered into a cooperation is due to the investments it had made in its agreement. Witnesses, experts and other information technology (IT) systems. The participants may be connected by video Centre’s secure file-sharing platform has been conference as required—but usually, everyone tested and refined over the years. Similarly, is in the same location. ICSID has worked closely with the World Bank’s IT department to ensure its video-conferencing technology was fully capable of handling TRIBUNAL TRIBUNAL complex hearings. Its features include: SECRETARY AUDIO & VIDEO TECHNICAL BOOTH § Robust security, including end-to-end encryption § High-definition audio and video RESPONDENT CLAIMANT § Real-time court reporting § Simultaneous interpretation § File sharing and document annotation The immediate benefits of ICSID’s information technology are clear. Cases have proceeded with minimal disruption while parties, tribunals and the ICSID Secretariat operated remotely. But the COURT REPORTER longer-term benefits are also evident. Both electronic filing and virtual hearings offer green INTERPRETATION BOOTH and cost-effective options to parties. 32 EXCELL EN CE I N I N V ESTM EN T D I S P UT E R ES OLU T I ON TRIBUNAL 2. HYBRID This is a mix of an in-person and virtual INTERPRETER hearing. For example, the tribunal may meet & COURT in one location, the respondent party in a REPORTER TECHNICAL ICSID SUPPORT second, and the claimant party in a third. HEARING Again, the availability of the World Bank CENTRE Group offices and of cooperating institutions means that parties have options for secure and modern conference facilities in most TRIBUNAL countries. ICSID’s hearing centres in CLAIMANT SECRETARY RESPONDENT Washington, D.C. and Paris often serve as hubs for technical support and interpretation. TRIBUNAL 3. VIRTUAL In a fully virtual hearing—of which ICSID has held many over the last year—all TRIBUNAL participants connect from different SECRETARY locations. This includes court reporters and interpreters, who provide transcription and interpretation via dedicated text feeds and COURT TECHNICAL audio channels. ICSID’s platform allows for INTERPRETER REPORTER SUPPORT hearings of any size—from a handful to hundreds of participants. All participants have the ability to share audio and video, SECURE ONLINE PLATFORM as well as content such as PowerPoint presentations. A virtual chat function allows participants to communicate individually amongst each other or with the entire group. PARTY REPRESENTATIVES 2 0 2 0 I C S I D A N N UA L R E P ORT 33 Outreach and Training ICSID webinar on virtual hearings. © ICSID The ICSID Secretariat engages regularly with the arbitrators and conciliators, updated in real ICSID membership, most notably over the last time, as well as detailed guidance on ICSID two years on the amendment to ICSID’s rules and practices and procedure. The Centre’s suite of regulations. ICSID is also committed to the publications, which include the ICSID Review and exchange of knowledge and capacity building in Caseload Statistics, are highly regarded for their the field of international investment dispute quality, timeliness and relevance. resolution. Towards this end, ICSID organizes Another priority for ICSID is supporting the next events and provides training courses to generation of professionals to establish government officials, civil society organizations themselves in the field of international investment and students. In FY2020, ICSID organized or law and dispute settlement. This was the participated in over 100 events and courses. rationale behind the creation of Young ICSID, ICSID publications and online resources provide a which counted over 800 members as of June 30, wealth of information and data on the ICSID 2020. Young ICSID convened a number of events system and international investment law more and meetings in FY2020 on topics such as generally. The ICSID website features a range of investor-State mediation and trends at ICSID. databases related to Member States, cases, and 34 EXCELL EN CE I N I N V ESTM EN T D I S P UT E R ES OLU T I ON AMENDING THE ICSID RULES: DIALOGUE WITH STATES In FY2020, a major focus of the ICSID Secretariat’s dialogue with States centered on the process of amending the Centre’s procedural rules for investor-State dispute settlement. ICSID published two working papers with proposals for amendment of the ICSID rules during the fiscal year: Working Paper #3, published in August 2019, and Working Paper #4, published in February 2020. Representatives of Member States met in November 2019 for the third in-person consultation on the rule amendments. The rule amendment project will modernize and streamline ICSID’s procedural rules, while also reducing the time, cost and environmental footprint of cases. ICSID is also addressing a number of topics that were raised by Member States and other stakeholders during the consultation process. These include third-party funding, transparency, and security for costs. In addition, the ICSID Secretariat and the Secretariat of the United Nations Commission on International Trade Law (UNCITRAL) released a draft Code of Conduct for Adjudicators in May 2020. The draft Code was developed jointly by ICSID and UNCITRAL in the context of ICSID’s rule amendment process and the work of UNCITRAL Working Group III (ISDS reform). In June 2020, ICSID and UNCITRAL began a series of online consultations with Member States and the public to gather input on the draft code. Consultation with Member States on the ICSID Rule Amendments, Washington, D.C. © ICSID 2 0 2 0 I C S I D A N N UA L R E P ORT 35 GLOBAL OUTREACH: HIGHLIGHTS ICSID engages frequently with legal professionals, academics, students, non-governmental organizations and media to raise awareness of the ICSID system for dispute settlement and provide updates on key initiatives and developments at the Centre. Highlights from FY2020 include: MONTREAL, CANADA OCTOBER 2, 2019 Meg Kinnear delivers the John E.C. Brierley Memorial Lecture on the theme of ‘Continuity and Change in the ICSID System: Challenges and Opportunities in the Search for Consensus’ at McGill University. MINNEAPOLIS, UNITED STATES OF AMERICA FEBRUARY 21, 2020 CASABLANCA, MOROCCO Meg Kinnear and Frauke DECEMBER 5, 2019 Nitschke address the topic of Benjamin Garel, ICSID Legal ‘Innovative Strategies for Counsel, discusses mechanisms Conflict Management: for protecting investments in Improving Investor-State Africa at the Casablanca Relations to Propel Global Arbitration Days 2019. Growth’ at a seminar hosted by the University of St. Thomas School of Law. GUAYAQUIL, ECUADOR NOVEMBER 20, 2019 Natali Sequeira, ICSID Team Lead and Senior Legal Counsel, discusses emerging trends in investor-State dispute settlement at a conference organized by the Quito Chamber of Commerce, Guayaquil Chamber of Commerce, and ICC Ecuador. DOUALA, CAMEROON SANTIAGO, CHILE JANUARY 16, 2020 SEPTEMBER 25, 2019 Ella Rosenberg, ICSID Legal Counsel, Gonzalo Flores, ICSID Deputy Secretary- participates in a symposium on the General, reviews recent trends at ICSID settlement of investment disputes by at an event organized by the Santiago arbitration and mediation within the Arbitration and Mediation Center. Organisation for the Harmonization of Business Law in Africa (OHADA) area, organized by the Association for the Promotion of Arbitration in Africa. 36 EXCELL EN CE I N I N V ESTM EN T D I S P UT E R ES OLU T I ON BUCHAREST, ROMANIA XI’AN CITY, CHINA OCTOBER 21, 2019 SEPTEMBER 15, 2019 Martina Polasek discusses investment Meg Kinnear, ICSID Secretary-General, delivers the arbitration under the ICSID rules at a keynote speech at the conference ‘Multilateral seminar hosted by Bucharest Reform of ISDS: A Dialogue between Different University of Economic Studies. Approaches’, organized by the Silk Road Institute for International and Comparative Law, Xi’an Jiaotong University. ONLINE MAY 4, 2020 ICSID hosts a webinar on the ‘Art and Science of a Virtual Hearing’. Jara Minguez Almeida, ICSID Team Lead and Senior Legal Counsel, spoke from the perspective of ICSID as an administering institution, and was joined by counsel and arbitrators from a recent ICSID virtual hearing. HONG KONG OCTOBER 25, 2019 Frauke Nitschke, ICSID Team Lead and Senior Legal Counsel, joins representatives of the Department of Justice of the Hong Kong SAR and KATHMANDU, NEPAL the Asian Academy for an in-depth SEPTEMBER 8, 2019 course on investor-State mediation. Martina Polasek, ICSID Deputy Secretary-General, provides an overview of the ICSID dispute resolution system to Nepali practitioners and arbitrators in an on-line presentation. BANGKOK, THAILAND SEPTEMBER 26-28, 2019 Meg Kinnear leads a three-day training program that includes an introduction to ICSID and a discussion of current issues in international investment dispute settlement in collaboration with the International Institute for Trade and Development. 2 0 2 0 I C S I D A N N UA L R E P ORT 37 SPOTLIGHT ON THE ICSID PUBLICATIONS ICSID REVIEW ICSID CASELOAD – STATISTICS The ICSID Review–Foreign The ICSID Caseload - Statistics contains a profile of Investment Law Journal is the ICSID caseload since the first case was the premiere peer- registered in 1972. Published in English, French reviewed periodical and Spanish every 6 months, it is a valuable devoted exclusively to empirical reference about trends in international foreign investment law investment dispute settlement. Two issues were and international published in FY2020: investment dispute § The ICSID Caseload - Statistics (Issue 2019-2) – settlement. Published covering trends in cases registered and three times a year, it features articles, case administered by ICSID in fiscal year 2019, comments, documents, and book reviews on the spanning July 1, 2018 to June 30, 2019. law and practice relating to foreign investments. § The ICSID Caseload - Statistics (Issue 2020-1) – In September 2019, the Review welcomed five new covering trends in cases registered and Associate Editors to its editorial team. Kabir administered by ICSID in the 2019 calendar Duggal and Esmé Shirlow took on the position of year (January – December). Associate Editors for Case Comments, and Gloria Alvarez and Kiran Gore as Associate Editors for The latest caseload trends for fiscal year 2020 Book Reviews. Jeremy Sharpe assumed the role of are contained in Issue 2020-2, published in Associate Editor for Notes, joining Chester Brown, August 2020, and reflected on pages 19-31 of this who continues as Associate Editor of the Notes Annual Report. section. Meg Kinnear and Campbell McLachlan QC serve as Editors-in-Chief. COLLECTIONS Among the Review’s highlights over FY2020 was a ​CSID publishes a multi-volume loose-leaf I special issue focused on Africa’s contribution to collection of Investment Treaties containing the ICSID and investor-State dispute settlement. texts of investment treaties and protocols With contributions from a wide range of experts, concluded by over 165 countries from 1959 until the special issue examines the role played by the present. The Investment Treaties collection has representatives of African States in creating been published since 1986. ICSID, the seminal cases in which African ICSID’s multi-volume loose-leaf collection, countries participated as respondents and Investment Laws of the World, features investment claimants, and insights into how international legislation and contact information of national investment law is developing on the African investment agencies from over 140 countries. continent today. Investment Laws of the World has been published since 1973 and the legislation reproduced is 38 EXCELL EN CE I N I N V ESTM EN T D I S P UT E R ES OLU T I ON Judge Bruno Simma speaks with the ICSID Secretariat. © ICSID available in the official language(s) as provided to Meg Kinnear and Paul Jean Le Cannu, ‘Concluding ICSID by the respective governments. Remarks: ICSID and African States Leading International Investment Law Reform’, (2020) ICSID STAFF PUBLICATIONS ICSID Review—Foreign Investment Law Journal. Jara Minguez Almeida and Natali Sequeira, ‘La Meg Kinnear, ‘Foreword’, The ICSID Convention, jurisdicción del centro internacional de arreglo de Regulations and Rules: A Practical Commentary, diferencias relativas a inversiones’, Tratados Julien Fouret, Rémy Gerbay and Gloria M. Alvarez Internacionales y el Arbitraje de Inversión: (eds), (2019) Edward Elgar Publishing. Experiencias de Colombia y del Derecho Comparado, Alfredo Fuentes Hernández (Ed) (2019) Grupo Meg Kinnear, ‘Continuity and Change in the ICSID Editorial Ibáñez System: Challenges and Opportunities in the Search for Consensus’, (2019) McGill Journal of Catherine Kettlewell, ‘International Centre For Dispute Resolution. Settlement of Investment Disputes, Commentary on Articles 1-8’, The ICSID Convention, Regulations Veronica Lavista, ‘Oil Prices in Investment and Rules: A Practical Commentary, Julien Fouret, Arbitration, Partial Assimilation’, Beyond Market Rémy Gerbay, Gloria M. Alvarez (Eds) (2019) Assumptions: Oil Prices as a Global Institution, Edward Elgar Publishing. Andrei V. Belyi (Ed) (2020) Springer. Frauke Nitschke, ‘ICSID’s Role in Advancing Veronica Lavista, ‘Book Review: The Boundaries of Investor-State Mediation’, (2019) Global Investment Arbitration – The Use of Trade and Arbitration Review. European Human Rights Law in Investor State 2 0 2 0 I C S I D A N N UA L R E P ORT 39 Disputes (by José E. Alvarez)’ (2020) Leiden § Members of the Panels of Arbitrators and of Journal of International Law. Conciliators, Doc. ICSID/10 (periodic updates) (English) Martina Polasek and Celeste E. Salinas Quero, ‘Security for Costs: Overview of ICSID Case Law’ § ICSID Regulations and Rules, Doc. ICSID/4/Rev. 1 Finances in International Arbitration: Liber Amicorum (May 1975) (contains the texts of the Centre’s Patricia Shaughnessy, Sherlin Tung, Fabricio Fortese, Regulations and Rules in effect from January 1, and Crina Baltag (Eds) (2019) Wolters Kluwer. 1968 to September 25, 1984) (English, French and Spanish) Jakob Ragnwaldh, Fredrik Andersson, and Celeste E. Salinas Quero, A Guide to the SCC Arbitration § ICSID Basic Documents, Doc. ICSID/15 (January Rules, (2019) Wolters Kluwer. 1985) (contains the texts of the Centre’s Regulations and Rules in effect from ICSID OFFICIAL DOCUMENTS September 26, 1984 to December 31, 2002 and the text of the ICSID Convention) (English, § List of Contracting States and Other Signatories French and Spanish) of the Convention, Doc. ICSID/3 (periodic updates) (English, French and Spanish) § ICSID Convention, Regulations and Rules, Doc. ICSID/15/Rev. 1 (January 2003) (contains the § Contracting States and Measures Taken by Them texts of the Centre’s Regulations and Rules in for the Purpose of the Convention, Doc. ICSID/8 effect from January 1, 2003 to April 9, 2006 (periodic updates) (English) Mediation training organized with the Department of Justice of the Hong Kong SAR and the Asian Academy of International Law. © Asian Academy of International Law 40 EXCELL EN CE I N I N V ESTM EN T D I S P UT E R ES OLU T I ON and the text of the ICSID Convention) (English, § ICSID Additional Facility for the Administration of French and Spanish) Conciliation, Arbitration and Fact-Finding Proceedings, Doc. ICSID/11 (June 1979) (contains § ICSID Convention, Regulations and Rules, Doc. the texts of the Additional Facility Rules in ICSID/15 (April 2006) (contains the texts of the effect from September 27, 1978 until December Centre’s Regulations and Rules in effect from 31, 2002) (English, French and Spanish) April 10, 2006 and the text of the ICSID Convention) (English, French and Spanish) § ICSID Additional Facility Rules, Doc. ICSID/11/ Rev. 1 (January 2003) (contains the texts of § List of Pending and Concluded Cases, ICSID/16 the Additional Facility Rules in effect from (Internet edition only) January 1, 2003 to April 9, 2006) (English, § Memorandum on the Fees and Expenses of ICSID French and Spanish) Arbitrators (July 6, 2005) (English, French and § ICSID Additional Facility Rules, Doc. ICSID/11 (April Spanish) 2006) (contains the texts of the Additional § ICSID Schedule of Fees (January 1, 2019) (English, Facility Rules in effect from April 10, 2006) French and Spanish) (English, French and Spanish) § ICSID Annual Report (1967–2019) (English, French and Spanish) 2 0 2 0 I C S I D A N N UA L R E P ORT 41 2019 World Bank Group Annual Meetings, Washington, D.C. © World Bank 42 EXCELL EN CE I N I N V ESTM EN T D I S P UT E R ES OLU T I ON Fifty-Third Annual Meeting of the Administrative Council The ICSID Administrative Council is the governing At its 53rd Annual Meeting, the Administrative body of ICSID. Its composition, functions and Council approved the Centre’s 2019 Annual decision-making procedure are provided for in the Report and its administrative budget for FY2020. ICSID Convention (Articles 4 to 8). The Resolutions adopted at the Meeting are Pursuant to Article 4 of the ICSID Convention, the reproduced below. ICSID Administrative Council is composed of one representative of each Contracting State. In the AC(53)/RES/138—APPROVAL OF THE absence of a contrary designation, the governor ANNUAL REPORT for the World Bank appointed by that State The Administrative Council RESOLVES serves ex officio as its representative on the Council. Each member has one vote on the To approve the 2019 Annual Report on the Administrative Council. At the end of FY2020, 154 operation of the Centre. Contracting States were represented on the ICSID Administrative Council. An up-to-date list of AC(53)/RES/139—ADOPTION OF members of the Administrative Council is BUDGET FOR FISCAL YEAR 2020 available on the ICSID website. The Administrative Council RESOLVES On October 18, 2019, the Chair of the To adopt, for the period July 1, 2019 to June 30, Administrative Council, Mr. David R. Malpass, 2020, the budget set forth in paragraph 2 of presided over the 53rd Annual Meeting of the the Report and Proposal of the Secretary- Administrative Council, which took place in General on the Budget for Fiscal Year 2020, Washington, D.C., on the occasion of the Annual dated June 29, 2019. Meetings of the Boards of Governors of the World Bank Group and the International Monetary Fund. 2 0 2 0 I C S I D A N N UA L R E P ORT 43 Finance ICSID’s administrative expenditures in FY2020 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 FY2020 are presented in the following pages. 44 EXCELL EN CE I N I N V ESTM EN T D I S P UT E R ES OLU T I ON Independent Auditors’ Report and Financial Statements Statement of Financial Position 46 Statement of Activities 47 Statement of Cash Flows 48 Notes to the Financial Statements 49 Independent Auditors’ Report 59 2 0 2 0 I C S I D A N N UA L R E P ORT 45 Finance Statement of Financial Position June 30, 2020 and June 30, 2019 All amounts expressed in U.S. dollars unless otherwise noted 2020 2019 Assets: Cash (Note 2) $ 400,097 $ 511,823 Share of cash and investments in the Pool (Notes 2 and 3) 77,311,181 68,796,379 Due from parties to arbitration/conciliation proceedings (Note 2) 168,396 433,687 Other assets, net (Notes 2 and 4) 25,095 58,556 Total assets $77,904,769 $ 69,800,445 Liabilities and net assets: Liabilities: Payable to International Bank for Reconstruction and Development (Note 2) $ 4,027,414 $ 2,865,871 Other liabilities 39,560 36,476 Deferred revenue (Note 2) 6,356,319 6,454,531 Accrued expenses related to arbitration/conciliation proceedings (Note 2) 7,785,436 9,250,504 Advances from parties to arbitration/conciliation proceedings (Note 2) 53,141,832 46,361,145 Total liabilities 71,350,561 64,968,527 Net assets, unrestricted (Note 5) 6,554,208 4,831,918 Total liabilities and net assets $ 77,904,769 $ 69,800,445 The notes to the financial statements are an integral part of these statements. 46 EXCELL EN CE I N I N V ESTM EN T D I S P UT E R ES OLU T I ON Statement of Activities For the years ended June 30, 2019 and June 30, 2018 All amounts expressed in U.S. dollars unless otherwise noted 2020 2019 Support and revenues: Revenues/Fees from arbitration/conciliation proceedings (Notes 2 and 7) $ 49,995,672 $ 51,288,121 In-kind contributions (Notes 2 and 9) 661,644 1,068,885 Net investment income (Notes 2, 3 and 10) 1,286,108 1,637,943 Sales of publications 72,321 63,910 Total support and revenues $ 52,015,745 $ 54,058,859 Expenses: Expenses related to arbitration/conciliation proceedings (Notes 2 and 8) $ 34,921,658 $ 37,735,934 Administrative expenses (Note 9) 14,329,892 12,809,864 Amortization expenses (Notes 2 and 4) 33,460 33,460 Net Investment income applied to arbitration/conciliation proceedings (Notes 2, 3 1,008,445 1,318,353 and 10) Total expenses 50,293,455 51,897,611 Change in net assets 1,722,290 2,161,248 Net assets, beginning of the year 4,831,918 5,116,642 Cumulative effect adjustment for the adoption of ASU 2014-09 — (2,445,972) Adjusted Net assets, beginning of the year 4,831,918 2,670,670 Net assets, end of the year $ 6,554,208 $ 4,831,918 The notes to the financial statements are an integral part of these statements. 2 0 2 0 I C S I D A N N UA L R E P ORT 47 Finance Statement of Cash Flows For the years ended June 30, 2020 and June 30, 2019 All amounts expressed in U.S. dollars unless otherwise noted 2020 2019 Cash flows from operating activities: Change in net assets after cumulative effect adjustment for the adoption of $ 1,722,290 ($ 284,724) ASU 2014-09 Adjustments to reconcile change in net assets to net cash provided by (used in) operating activities: Amortization cost 33,460 33,460 Increase/(Decrease) in due from parties to arbitration/conciliation proceedings 265,291 (44,250) Increase in payable to International Bank for Reconstruction & Development 1,161,544 116,377 Increase in Other liabilities 3,084 29,716 (Decrease)/Increase in deferred revenue (98,212) 3,007,267 (Decrease) in accrued expenses related to arbitration/conciliation Proceedings (1,465,067) (1,093,259) Increase in advances from parties to arbitration/conciliation proceedings 6,780,687 5,824,118 Net cash provided by operating activities 8,403,077 7,588,706 Cash flows from investing activities: Increase in Share of cash and investment in the Pool (8,514,802) (7,558,363) Net cash used in investing activities (8,514,802) (7,558,363) Net (Decrease)/Increase in cash (111,725) 30,343 Cash at beginning of the year 511,823 481,479 Cash at end of the year $ 400,097 $ 511,823 The notes to the financial statements are an integral part of these statements. 48 EXCELL EN CE I N I N V ESTM EN T D I S P UT E R ES OLU T I ON Notes to the Financial Statements June 30, 2020 and June 30, 2019 All amounts expressed in U.S. dollars unless otherwise noted NOTE 1—ORGANIZATION The International Centre for Settlement of Investment Disputes (ICSID or the Centre) was established on October 14, 1966 by the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (the ICSID Convention). ICSID is a member of the World Bank Group (WBG), which also includes the International Bank for Reconstruction and Development (IBRD), the International Finance Corporation (IFC), the International Development Association (IDA) and the Multilateral Investment Guarantee Agency (MIGA). Under the ICSID Convention, the Centre provides facilities for the conciliation and arbitration of investment disputes between Member States (countries which have ratified the ICSID Convention) and nationals of other Member States. Pursuant to Additional Rules adopted in 1978, ICSID also administers certain types of proceedings between governments and foreign nationals that fall outside the scope of the ICSID Convention. These include conciliation and arbitration proceedings for the settlement of investment disputes where either the home or the host country of the investor concerned is not a Member State. ICSID also administers investor-State proceedings under other sets of rules, such as the Arbitration Rules of the United Nations Commission on International Trade Law (UNCITRAL). Finally, the Centre also acts as appointing authority under various arbitral rules and international treaties. In order to process the cases, the Centre constitutes arbitral tribunals, conciliation commissions and ad hoc committees, as necessary. On February 13, 1967, IBRD and the Centre entered into Administrative Arrangements, 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, pursuant to its Administrative and Financial Regulations (the Regulations), collects funds from the parties to proceedings to cover its administrative expenses, IBRD shall provide reasonable facilities and services to ICSID without charge, as described in Notes 2 and 9. Effective February 2012, pursuant to Operational Guidelines for the Funding of the Operations of the Centre entered into by IBRD and the Centre, if at the end of each fiscal year the Centre’s total expenditure less the IBRD’s in-kind contribution is less than the revenues collected by the Centre, then the accumulated surplus amount will be retained by the Centre and may be carried forward indefinitely. In the event the Centre’s total expenditure, less the IBRD’s in-kind contribution, is greater than the revenues collected by the Centre during the year, the excess expenditure will be charged against the balance of any accumulated surpluses retained by the Centre before the Centre requests supplementary funding from IBRD. 2 0 2 0 I C S I D A N N UA L R E P ORT 49 NOTE 2—SIGNIFICANT ACCOUNTING POLICIES Basis of Accounting and Financial Statement Presentation: The financial statements have been prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP). Through June 30, 2019, ICSID dual complied with both U.S. GAAP and the International Financial Reporting Standards (IFRS). To bring ICISD in line with the other members of the World Bank Group, ICSID management decided to transition to single basis reporting U.S. GAAP effective July 1, 2019. The transition to U.S. GAAP as the only basis of financial reporting did not have a material impact on the financial statements and related disclosures. Use of Estimates: The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, together with the related disclosures as at the date of the financial statements. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include the amount of accrued expenses and related revenues for ongoing cases at each year end; the fair value of the share of cash and investments in the pool; and the useful lives of other assets. Cash: Cash consists of cash held in a bank account. Share of cash and investments in the Pool: Investments in the Pool (further described in Note 3) are reported at fair value through profit or loss. Resulting gains or losses are reported as an increase or a reduction in Net investment income in the Statements of Activities. All income earned on advances from parties towards arbitration/conciliation costs is applied to the parties’ advance balances and are made available to be used for expenses when costs are incurred by ICSID in facilitating arbitration/conciliation proceedings. The Centre’s share of net investment income is included in the Net investment income on the Statement of Activities with further disclosure in Note 10. Due from parties to arbitration/conciliation proceedings: Direct expenses incurred by arbitrators, conciliators and committee members in excess of advance payments made by the parties to ongoing proceedings are recognized as due from parties and are payable in accordance with the Centre’s Regulations. Other assets and amortization: The Centre’s other assets comprise computer systems software, which are capitalized at cost and amortized using the straight-line method over a range of four to ten years. Amortization is charged from commencement of the use of the software. 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 the carrying amount exceeds its recoverable amount, at which time, a write-down would be recorded. Payable to IBRD: These amounts represent the balance of outstanding expenses incurred in the normal course of business, which are paid by IBRD on behalf of ICSID. Accrued expenses related to arbitration/conciliation proceedings: Accrued expenses are recorded when it is probable that the expense has been incurred and the amount can be reasonably estimated. 50 EXCELL EN CE I N I N V ESTM EN T D I S P UT E R ES OLU T I ON Management estimates the amount of unbilled expenses incurred by arbitrators, conciliators, committee members and other service providers, and related revenues, for ongoing cases at each year end. The nature of the cases handled by the Centre requires the use of external arbitrators, conciliators and committee members, who charge fees for their services based on time spent on the cases. The estimation process uses information received from those individuals about unbilled time spent and expenses incurred on the cases through the end of the fiscal year. In some instances, the determination of fees and expenses incurred in ongoing cases is based on estimated time spent by them in relation to the 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 from management’s estimates. Advances from parties to arbitration/conciliation proceedings: In accordance with its Regulations, the Centre periodically requests parties to proceedings to make advance payments to cover case administrative charges and the fees and expenses of Tribunal, Commission and Committee members. Advance balances not used to cover costs of the proceeding during the period are recorded as liabilities. On completion of proceedings, if there is an excess of advances and investment income over expenditures for the proceedings, then the surplus is refunded to the parties in proportion to the amounts advanced by them to the Centre. Revenues/fees from arbitration/conciliation proceedings: The Centre’s direct expenses attributable to proceedings, are borne by the parties in accordance with the Centre’s Regulations. Pursuant to the Regulations, the Centre has full administrative control and responsibility of these transactions to the extent that advances from the parties are received (see Note 8). As such in line with ASC 606 requirements, the Centre recognizes direct expenses, which include fees and expenses of arbitrators, conciliators and Committee members, as well as costs associated with meeting rooms and support services for conducting proceedings as revenue. In addition, revenues from proceedings also include the following (see Note 7): Registration fees: The Centre charges a non-refundable fee of $25,000 to parties requesting the institution of arbitration/conciliation proceedings under the ICSID Convention and the ICSID Additional Facility Rules; applying for annulment of an arbitral award rendered pursuant to the ICSID Convention; or requesting the institution of fact-finding proceedings under the ICSID Additional Facility Rules. The Centre charges a non-refundable fee of $10,000 to parties requesting a supplementary decision to, or the rectification, interpretation or revision of, an arbitral award rendered pursuant to the ICSID Convention; requesting a supplementary decision to, or the correction or interpretation of an arbitral award rendered pursuant to the ICSID Additional Facility Rules; or requesting the resubmission of a dispute to a new tribunal after the annulment of an arbitral award rendered pursuant to the ICSID Convention. Registration fees are recognized over the estimated time period in which ICSID fulfils its performance obligation. 2 0 2 0 I C S I D A N N UA L R E P ORT 51 Administration fees: The Centre charges an annual administration fee of $42,000. For proceedings registered on or after July 1, 2016, the fee is due on the registration of the request for arbitration, conciliation or post award proceeding and annually thereafter. For proceedings registered before July 1, 2016, the fee is due on the date of constitution of the Tribunal, Commission or Committee concerned and annually thereafter. The same annual fee is charged in proceedings administered by the Centre under rules other than the ICSID Convention and the ICSID Additional Facility Rules. 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 period during which services are performed. The unearned revenue at year end is recorded as deferred revenue in the Statements of Financial Position and recognized in the subsequent fiscal year. Value of services provided by IBRD and in-kind contributions: IBRD provides support services and facilities to the Centre including the following: 1. The services of staff members and consultants; and 2. Other administrative services and facilities, such as travel, communications, office accommodations, furniture, equipment, supplies and printing. The Centre recognizes expenses, as incurred, for the value of services provided by IBRD, which is determined by the estimated fair value of such services. Cost approximates fair value for these services. Services by IBRD for which the Centre provides no compensation are similarly recognized, measured, and are recorded as in-kind contribution revenue in the Statements of Activities. Certain reclassifications of the prior year’s information have been made to conform with the current year’s presentation. Relevant accounting and reporting developments: Financial Accounting Standards Board (FASB): There are no accounting and reporting developments relevant to the Centre currently under consideration. NOTE 3—SHARE OF CASH AND INVESTMENTS IN THE POOL AND FAIR VALUE MEASUREMENT Amounts paid to the Centre, but not yet disbursed, are managed by IBRD, which maintains an investment portfolio (the Pool) for all the trust funds administered by the WBG. IBRD, on behalf of the WBG, maintains the Pool’s assets separate and apart from the funds of the WBG. The Pool is a trading portfolio and is reported at fair value, with realized and unrealized gains/losses included in net investment income. It is divided into sub-portfolios to which allocations are made based on fund specific investment horizons, risk tolerances, and/or other eligibility requirements for trust funds with common characteristics as determined by IBRD. Generally, the Pool includes cash and financial instruments such as government and agency obligations, time deposits, money market securities, and asset-backed securities. Additionally, the Pool includes equity securities, derivative contracts such as currency forward contracts, currency swaps, interest rate swaps, and contracts to purchase or sell 52 EXCELL EN CE I N I N V ESTM EN T D I S P UT E R ES OLU T I ON mortgage-backed securities to-be-announced (TBAs). Payables and receivables associated with the investment activities are also included in the Pool. The Pool may also include securities pledged as collateral under repurchase agreements, receivables from resale agreements, and derivatives for which it has accepted collateral. The Centre’s funds are invested in a sub-portfolio of the Pool, which invests primarily in cash and money market instruments, such as overnight time deposits, time term deposits, certificate of deposits, and commercial paper with terms of three months or less recorded at par value which approximates fair value. The sub-portfolio also includes government and agency obligations as well as derivatives. 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 gains/losses allocated based on ICSID’s share in the Pool. As explained in Note 2, net investment income on advances from parties is recorded as revenue and expense in the Statements of Activities, and it is applied to advances from parties to arbitration/conciliation proceedings to be used for expenses related to such proceedings. IBRD, on behalf of the WBG, has an established and documented process to determine fair values. Fair value is based upon quoted market prices for the same or similar instruments, where available. Financial instruments for which quoted market prices are not readily available are valued based on discounted cash flow models. These models primarily use market-based or independently-sourced market parameters such as yield curves, interest rates, volatilities, foreign exchange rates and credit curves, and may incorporate unobservable inputs. Selection of these inputs involves judgment. The Pool’s financial instruments are categorized based on the priority of the inputs to the valuation technique. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1), the next highest priority to observable market-based inputs or inputs that are corroborated by market data (Level 2), and the lowest priority to unobservable inputs that are not corroborated by market data (Level 3). When the inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement of the instrument in its entirety. IBRD categorizes overnight time deposits and certain government obligations as Level 1 and the other money market instruments, government and agency obligations as Level 2. Hierarchy level June 30, 2020 June 30, 2019 Level 1 $ 10,169 $ 9,839,653 Level 2 78,339,047 62,789,584 Total $ 78,349,216 $ 72,629,302 Cash & receivables/payables (1,038,035) (3,832,858) Fund Balance of ICSID’s TFs $ 77,311,181 $ 68,796,379 2 0 2 0 I C S I D A N N UA L R E P ORT 53 As of June 30, 2020, and June 30, 2019, ICSID’s share of cash and investments in the Pool does not include any financial instruments measured at fair value on a non-recurring basis. 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 short-term in nature and none are considered to be impaired. NOTE 4—OTHER ASSETS Other assets comprise computer systems software, which are amortized over 10 years using the straight-line method. Amortization charges amounted to $33,460 for the year ended June 30, 2020 (2019: $33,460). None of these assets are considered impaired. Cost 2020 2019 At 1st July $ 334,604 $ 334,604 Additions — — At 30th June $ 334,604 $ 334,604 Amortization At 1st July (276,049) (245,589) Charge for the year (30,460) (30,460) At 30th June (309,509) (276,049) Other Assets (net) $ 25,095 $ 58,555 NOTE 5—NET ASSETS, UNRESTRICTED Net assets, unrestricted represents accumulated surplus in the amount of $6,554,208 (2019: $4,831,918). The amount may be carried forward indefinitely. NOTE 6—RISKS ARISING FROM FINANCIAL INSTRUMENTS The Centre’s financial assets consist of its share of cash and investments in the Pool, cash and due from parties to arbitration/conciliation proceedings. The Centre holds the cash in a depository bank account. The Pool is actively managed and invested in accordance with the investment strategy established by IBRD for all trust funds administered by the WBG. The objectives of the investment strategy are 54 EXCELL EN CE I N I N V ESTM EN T D I S P UT E R ES OLU T I ON foremost to maintain adequate liquidity to meet foreseeable cash flow needs and preserve capital and then to maximize investment returns. The Centre is exposed to credit and liquidity risks. There has been no significant change during the fiscal year to the types of financial risks faced by the Centre or its general approach to the management of those risks. The exposure and the risk management policies employed to manage these risks are discussed below: Credit risk: The risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. Of the Centre’s financial assets, cash held in the 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 to the extent that is covered by insurance. Therefore, the Centre’s maximum credit exposure as at June 30, 2020 is equivalent to the gross value of the remaining assets amounting to $77,879,674 (2019: $69,058,202). The Centre does not hold credit enhancements or collateral to mitigate credit risk, and believes the pool is adequately managed. IBRD invests the Centre’s share of pooled investments primarily in money market securities. The Centre’s share of the cash and investments in the Pool is not traded in any market. However, the assets 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. The following table presents investment holdings in terms of the counterparty credit risk exposure categories as of June 30, 2020, and June 30, 2019. Counterparty credit ratings June 30, 2020 June 30, 2019 AA- or greater 68% 52% A- or greater 100% 100% ICSID defines the concentration of credit risk as the extent to which the pooled investments are held by an individual counterparty. The concentration of credit risk with respect to the Pool of investments is mitigated because IBRD has investment policies that limit the amount of credit exposure to any individual issuer. Other receivables and amounts due from parties to arbitration/conciliation proceedings result from the ordinary course of business. The amounts are neither past due nor impaired. 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 substantially invested in highly liquid money market instruments and liabilities carried generally have no stated maturity. 2 0 2 0 I C S I D A N N UA L R E P ORT 55 NOTE 7—REVENUES/FEES FROM ARBITRATION/CONCILIATION PROCEEDINGS Revenues/fees from arbitration/conciliation proceedings comprise: 2020 2019 Drawdown of advances from parties* $ 34,921,658 $ 37,735,934 Administrative fees 12,276,417 11,721,758 Case lodging and other fees 2,797,597 1,830,429 Total $ 49,995,672 $ 51,288,121 *The Centre recognizes revenue to the extent expenses related to arbitration/conciliation proceedings are incurred. The details of such expenses are provided in Note 8. The movement in advances from parties and drawdown of advances during the period is summarized below: 2020 2019 Opening balance $46,361,145 $ 40,537,027 Add: Advances received 40,693,900 42,241,699 Less: Drawdown of advances (34,921,658) (37,735,934) Add: Investment income applied 1,008,445 1,318,353 Closing Balance of Advances Received $ 53,141,832 $ 46,361,145 The impact of ASU 2014-09 adoption on the Centre’s deferred revenue from administration fees is summarized below: 2020 2019 Opening balance $6,454,531 $ 3,447,264 Cumulative impact adjustment from the adoption of ASU 2014-09 — 2,445,972 Adjusted opening balance 6,454,531 5,893,236 Administration fee recognized (3,829,392) (3,447,264) Administration fee received 4,055,625 3,829,392 Registration fee recognized (1,934,445) (1,218,333) Registration fee received 1,610,000 1,397,500 Closing Balance $6,356,319 $ 6,454,531 56 EXCELL EN CE I N I N V ESTM EN T D I S P UT E R ES OLU T I ON NOTE 8—EXPENSES RELATED TO ARBITRATION/CONCILIATION PROCEEDINGS Direct expenses related to arbitration/conciliation proceedings are paid out of advances from parties to the proceedings to the extent that there are funds available and to the extent that due from parties are recognized in the balance sheet. These expenses comprise: 2020 2019 Arbitrators’ fees and expenses $ 30,119,360 $ 31,669,042 Arbitration/conciliation meeting costs 4,462,605 5,483,400 Travel expenses 265,976 456,607 Other costs 73,717 126,885 Total $ 34,921,658 $ 37,735,934 NOTE 9—IN-KIND CONTRIBUTIONS 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 facilities and services to the Centre. Therefore, in-kind contributions represent the value of services provided by IBRD, less amounts reimbursed by ICSID to IBRD using proceeds from non-refundable fees and the sale of publications. A summary is provided below: 2020 2019 Staff Services (including benefits) $ 11,363,199 $ 10,643,948 Contractual Services 123,576 192,542 Administrative Services 422,857 345,326 Communication and Information Technology 1,104,267 764,961 Office Accommodation 1,213,467 750,369 Travel 102,526 112,718 Total Administrative Services and Facilities 14,329,892 12,809,864 Plus: Amortization Expense 33,460 33,460 Total recorded value of services and facilities 14,363,352 12,843,324 Less: Proceeds from Fees and Sale of Publications 15,423,998 11,489,715 (Increase)/Drawdown to/from net assets (1,722,290) 284,724 In-Kind Contributions $ 661,644 $ 1,068,884 2 0 2 0 I C S I D A N N UA L R E P ORT 57 NOTE 10—NET INVESTMENT INCOME 2020 2019 Net Investment Income from Share of Investment in the Pool $1,286,108 $ 1,637,943 Less: Net Investment Income applied to advances from parties to arbitration/conciliation proceedings 1,008,445 1,318,353 Net Investment Income on ICSID’s Share in the Pool $277,663 $ 319,590 NOTE 11—AUTHORIZATION OF FINANCIAL STATEMENTS ICSID’s management has evaluated subsequent events through August 24, 2020, the date the financial statements were approved and authorized for issue. 58 EXCELL EN CE I N I N V ESTM EN T D I S P UT E R ES OLU T I ON Deloitte & Touche LLP 7900 Tysons One Place Suite 800 McLean, VA 22102 USA Tel.: +1 703 251 1000 Fax: +1 703 251 3400 www.deloitte.com 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 (the "Centre"), which comprise the statements of financial position as of June 30, 2020 and 2019, 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; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of 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 audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. 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 auditor’s 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 Centre'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 Centre'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, 2020 and 2019, and the results of their operations and their cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America. August 24, 2020 2 0 2 0 I C S I D A N N UA L R E P ORT 59 Consultation with Member States on the ICSID rule amendments, Washington, D.C. © ICSID 60 EXCELL EN CE I N I N V ESTM EN T D I S P UT E R ES OLU T I ON List of Member States The 163 States listed below signed the 155 States that have deposited their instruments Convention on the Settlement of Investment of ratification are in bold, with the dates of Disputes between States and Nationals of Other deposit and the entry into force of the Convention States on the dates indicated. The names of the for each of them. 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 2 0 2 0 I C S I D A N N UA L R E P ORT 61 DEPOSIT OF ENTRY INTO FORCE STATE SIGNATURE RATIFICATION OF CONVENTION Brunei Darussalam Sep. 16, 2002 Sep. 16, 2002 Oct. 16, 2002 Bulgaria Mar. 21, 2000 Apr. 13, 2001 May 13, 2001 Burkina Faso Sep. 16, 1965 Aug. 29, 1966 Oct. 14, 1966 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 Central African Republic Aug. 26, 1965 Feb. 23, 1966 Oct. 14, 1966 Chad May 12, 1966 Aug. 29, 1966 Oct. 14, 1966 Chile Jan. 25, 1991 Sep. 24, 1991 Oct. 24, 1991 China Feb. 9, 1990 Jan. 7, 1993 Feb. 6, 1993 Colombia May 18, 1993 July 15, 1997 Aug. 14, 1997 Comoros Sep. 26, 1978 Nov. 7, 1978 Dec. 7, 1978 Congo, Democratic Rep. of Oct. 29, 1968 Apr. 29, 1970 May 29, 1970 Congo, Rep. of Dec. 27, 1965 June 23, 1966 Oct. 14, 1966 Costa Rica Sep. 29, 1981 Apr. 27, 1993 May 27, 1993 Côte d’Ivoire June 30, 1965 Feb. 16, 1966 Oct. 14, 1966 Croatia June 16, 1997 Sep. 22, 1998 Oct. 22, 1998 Cyprus Mar. 9, 1966 Nov. 25, 1966 Dec. 25, 1966 Czech Republic Mar. 23, 1993 Mar. 23, 1993 Apr. 22, 1993 Denmark Oct. 11, 1965 Apr. 24, 1968 May 24, 1968 Djibouti Apr. 12, 2019 June 9, 2020 July 9, 2020 Dominican Republic Mar. 20, 2000 Egypt, Arab Rep. of Feb. 11, 1972 May 3, 1972 June 2, 1972 El Salvador June 9, 1982 Mar. 6, 1984 Apr. 5, 1984 Estonia June 23, 1992 June 23, 1992 July 23, 1992 Ethiopia Sep. 21, 1965 62 EXCELL EN CE I N I N V ESTM EN T D I S P UT E R ES OLU T I ON DEPOSIT OF ENTRY INTO FORCE STATE SIGNATURE RATIFICATION OF CONVENTION Fiji July 1, 1977 Aug. 11, 1977 Sep. 10, 1977 Finland July 14, 1967 Jan. 9, 1969 Feb. 8, 1969 France Dec. 22, 1965 Aug. 21, 1967 Sep. 20, 1967 Gabon Sep. 21, 1965 Apr. 4, 1966 Oct. 14, 1966 Gambia, The Oct. 1, 1974 Dec. 27, 1974 Jan. 26, 1975 Georgia Aug. 7, 1992 Aug. 7, 1992 Sep. 6, 1992 Germany Jan. 27, 1966 Apr. 18, 1969 May 18, 1969 Ghana Nov. 26, 1965 July 13, 1966 Oct. 14, 1966 Greece Mar. 16, 1966 Apr. 21, 1969 May 21, 1969 Grenada May 24, 1991 May 24, 1991 June 23, 1991 Guatemala Nov. 9, 1995 Jan. 21, 2003 Feb. 20, 2003 Guinea Aug. 27, 1968 Nov. 4, 1968 Dec. 4, 1968 Guinea-Bissau Sep. 4, 1991 Guyana July 3, 1969 July 11, 1969 Aug. 10, 1969 Haiti Jan. 30, 1985 Oct. 27, 2009 Nov. 26, 2009 Honduras May 28, 1986 Feb. 14, 1989 Mar. 16, 1989 Hungary Oct. 1, 1986 Feb. 4, 1987 Mar. 6, 1987 Iceland July 25, 1966 July 25, 1966 Oct. 14, 1966 Indonesia Feb. 16, 1968 Sep. 28, 1968 Oct. 28, 1968 Iraq Nov. 17, 2015 Nov. 17, 2015 Dec. 17, 2015 Ireland Aug. 30, 1966 Apr. 7, 1981 May 7, 1981 Israel June 16, 1980 June 22, 1983 July 22, 1983 Italy Nov. 18, 1965 Mar. 29, 1971 Apr. 28, 1971 Jamaica June 23, 1965 Sep. 9, 1966 Oct. 14, 1966 Japan Sep. 23, 1965 Aug. 17, 1967 Sep. 16, 1967 Jordan July 14, 1972 Oct. 30, 1972 Nov. 29, 1972 Kazakhstan July 23, 1992 Sep. 21, 2000 Oct. 21, 2000 Kenya May 24, 1966 Jan. 3, 1967 Feb. 2, 1967 2 0 2 0 I C S I D A N N UA L R E P ORT 63 DEPOSIT OF ENTRY INTO FORCE STATE SIGNATURE RATIFICATION OF CONVENTION Korea, Rep. of Apr. 18, 1966 Feb. 21, 1967 Mar. 23, 1967 Kosovo, Rep. of June 29, 2009 June 29, 2009 July 29, 2009 Kuwait Feb. 9, 1978 Feb. 2, 1979 Mar. 4, 1979 Kyrgyz Republic June 9, 1995 Latvia Aug. 8, 1997 Aug. 8, 1997 Sep. 7, 1997 Lebanon Mar. 26, 2003 Mar. 26, 2003 Apr. 25, 2003 Lesotho Sep. 19, 1968 July 8, 1969 Aug. 7, 1969 Liberia Sep. 3, 1965 June 16, 1970 July 16, 1970 Lithuania July 6, 1992 July 6, 1992 Aug. 5, 1992 Luxembourg Sep. 28, 1965 July 30, 1970 Aug. 29, 1970 Macedonia, former Yugoslav Sep. 16, 1998 Oct. 27, 1998 Nov. 26, 1998 Rep. of Madagascar June 1, 1966 Sep. 6, 1966 Oct. 14, 1966 Malawi June 9, 1966 Aug. 23, 1966 Oct. 14, 1966 Malaysia Oct. 22, 1965 Aug. 8, 1966 Oct. 14, 1966 Mali Apr. 9, 1976 Jan. 3, 1978 Feb. 2, 1978 Malta Apr. 24, 2002 Nov. 3, 2003 Dec. 3, 2003 Mauritania July 30, 1965 Jan. 11, 1966 Oct. 14, 1966 Mauritius June 2, 1969 June 2, 1969 July 2, 1969 Mexico Jan. 11, 2018 July 27, 2018 Aug. 26, 2018 Micronesia, Federated States of June 24, 1993 June 24, 1993 July 24, 1993 Moldova Aug. 12, 1992 May 5, 2011 June 4, 2011 Mongolia June 14, 1991 June 14, 1991 July 14, 1991 Montenegro July 19, 2012 April 10, 2013 May 10, 2013 Morocco Oct. 11, 1965 May 11, 1967 June 10, 1967 Mozambique Apr. 4, 1995 June 7, 1995 July 7, 1995 Namibia Oct. 26, 1998 Nauru April 12, 2016 April 12, 2016 May 12, 2016 64 EXCELL EN CE I N I N V ESTM EN T D I S P UT E R ES OLU T I ON DEPOSIT OF ENTRY INTO FORCE STATE SIGNATURE RATIFICATION OF CONVENTION Nepal Sep. 28, 1965 Jan. 7, 1969 Feb. 6, 1969 Netherlands May 25, 1966 Sep. 14, 1966 Oct. 14, 1966 New Zealand Sep. 2, 1970 Apr. 2, 1980 May 2, 1980 Nicaragua Feb. 4, 1994 Mar. 20, 1995 Apr. 19, 1995 Niger Aug. 23, 1965 Nov. 14, 1966 Dec. 14, 1966 Nigeria July 13, 1965 Aug. 23, 1965 Oct. 14, 1966 Norway June 24, 1966 Aug. 16, 1967 Sep. 15, 1967 Oman May 5, 1995 July 24, 1995 Aug. 23, 1995 Pakistan July 6, 1965 Sep. 15, 1966 Oct. 15, 1966 Panama Nov. 22, 1995 Apr. 8, 1996 May 8, 1996 Papua New Guinea Oct. 20, 1978 Oct. 20, 1978 Nov. 19, 1978 Paraguay July 27, 1981 Jan. 7, 1983 Feb. 6, 1983 Peru Sep. 4, 1991 Aug. 9, 1993 Sep. 8, 1993 Philippines Sep. 26, 1978 Nov. 17, 1978 Dec. 17, 1978 Portugal Aug. 4, 1983 July 2, 1984 Aug. 1, 1984 Qatar Sep. 30, 2010 Dec. 21, 2010 Jan. 20, 2011 Romania Sep. 6, 1974 Sep. 12, 1975 Oct. 12, 1975 Russian Federation June 16, 1992 Rwanda Apr. 21, 1978 Oct. 15, 1979 Nov. 14, 1979 Samoa Feb. 3, 1978 Apr. 25, 1978 May 25, 1978 San Marino Apr. 11, 2014 Apr. 18, 2015 May 18, 2015 Sao Tome and Principe Oct. 1, 1999 May 20, 2013 June 19, 2013 Saudi Arabia Sep. 28, 1979 May 8, 1980 June 7, 1980 Senegal Sep. 26, 1966 Apr. 21, 1967 May 21, 1967 Serbia May 9, 2007 May 9, 2007 June 8, 2007 Seychelles Feb. 16, 1978 Mar. 20, 1978 Apr. 19, 1978 Sierra Leone Sep. 27, 1965 Aug. 2, 1966 Oct. 14, 1966 Singapore Feb. 2, 1968 Oct. 14, 1968 Nov. 13, 1968 2 0 2 0 I C S I D A N N UA L R E P ORT 65 DEPOSIT OF ENTRY INTO FORCE STATE SIGNATURE RATIFICATION OF CONVENTION Slovak Republic Sep. 27, 1993 May 27, 1994 June 26, 1994 Slovenia Mar. 7, 1994 Mar. 7, 1994 Apr. 6, 1994 Solomon Islands Nov. 12, 1979 Sep. 8, 1981 Oct. 8, 1981 Somalia Sep. 27, 1965 Feb. 29, 1968 Mar. 30, 1968 South Sudan Apr. 18, 2012 Apr. 18, 2012 May 18, 2012 Spain Mar. 21, 1994 Aug. 18, 1994 Sept. 17, 1994 Sri Lanka Aug. 30, 1967 Oct. 12, 1967 Nov. 11, 1967 St. Kitts & Nevis Oct. 14, 1994 Aug. 4, 1995 Sep. 3, 1995 St. Lucia June 4, 1984 June 4, 1984 July 4, 1984 St. Vincent and the Grenadines Aug. 7, 2001 Dec. 16, 2002 Jan. 15, 2003 Sudan Mar. 15, 1967 Apr. 9, 1973 May 9, 1973 Swaziland Nov. 3, 1970 June 14, 1971 July 14, 1971 Sweden Sep. 25, 1965 Dec. 29, 1966 Jan. 28, 1967 Switzerland Sep. 22, 1967 May 15, 1968 June 14, 1968 Syria May 25, 2005 Jan. 25, 2006 Feb. 24, 2006 Tanzania Jan. 10, 1992 May 18, 1992 June 17, 1992 Thailand Dec. 6, 1985 Timor-Leste July 23, 2002 July 23, 2002 Aug. 22, 2002 Togo Jan. 24, 1966 Aug. 11, 1967 Sep. 10, 1967 Tonga May 1, 1989 Mar. 21, 1990 Apr. 20, 1990 Trinidad and Tobago Oct. 5, 1966 Jan. 3, 1967 Feb. 2, 1967 Tunisia May 5, 1965 June 22, 1966 Oct. 14, 1966 Turkey June 24, 1987 Mar. 3, 1989 Apr. 2, 1989 Turkmenistan Sep. 26, 1992 Sep. 26, 1992 Oct. 26, 1992 Uganda June 7, 1966 June 7, 1966 Oct. 14, 1966 Ukraine Apr. 3, 1998 June 7, 2000 July 7, 2000 United Arab Emirates Dec. 23, 1981 Dec. 23, 1981 Jan. 22, 1982 66 EXCELL EN CE I N I N V ESTM EN T D I S P UT E R ES OLU T I ON DEPOSIT OF ENTRY INTO FORCE STATE SIGNATURE RATIFICATION OF CONVENTION United Kingdom of Great May 26, 1965 Dec. 19, 1966 Jan. 18, 1967 Britain and Northern Ireland United States of America Aug. 27, 1965 June 10, 1966 Oct. 14, 1966 Uruguay May 28, 1992 Aug. 9, 2000 Sep. 8, 2000 Uzbekistan Mar. 17, 1994 July 26, 1995 Aug. 25, 1995 Yemen, Republic of Oct. 28, 1997 Oct. 21, 2004 Nov. 20, 2004 Zambia June 17, 1970 June 17, 1970 July 17, 1970 Zimbabwe Mar. 25, 1991 May 20, 1994 June 19, 1994 2 0 2 0 I C S I D A N N UA L R E P ORT 67 1818 H Street, NW Washington, D.C. 20433 USA Telephone: +1 (202) 458 1534 Facsimile: +1 (202) 522 2615 Email: ICSIDsecretariat@worldbank.org Website: icsid.worldbank.org