The Inherent Power of Reconsideration in Recent ICSID Case … · The Inherent Power of Reconsideration in Recent ... Power of Reconsideration IN RECENT ICSID CASE LAW 233 ... ‘ConocoPhillips

Journal of World Investment & Trade 18 (2017) 232–270

© koninklijke brill nv, leiden, 2�17 | doi 10.1163/22119000-12340040

The Inherent Power of Reconsideration in Recent ICSID Case Law

Tobia CantelmoUniversity of Naples Federico II, Naples, Italy

[email protected]

Abstract

The present article deals with the issue of the power of reconsideration of ICSID tribu-nals. In 2014, the majority in ConocoPhillips v. Venezuela rejected Respondent’s Request for Reconsideration, ruling that an interim decision had res judicata effect. However, in a powerful dissent in that case, Professor Abi-Saab argued that the tribunal in fact pos-sessed an inherent power of reconsideration. The following year, the ICSID tribunal in Perenco v. Ecuador unanimously endorsed the reasoning of the majority in ConocoPhillips. While judicial economy is potentially undermined if interim decisions can later be revisited, the question is how to strike the proper balance between judicial efficiency and fundamental fairness. As this article shows, the most sensible position, recently taken by the ICSID tribunal in SCB HK v. TANESCO – and one that still promotes judi-cial economy – is to recognize a limited power of reconsideration during the period until a final judgment has been rendered.

Keywords

ICSID partial decision – request for reconsideration – power to reconsider – res judicata – inherent powers

* LLB, LLM magna cum laude (University Federico II of Naples), PhD Student, University Federico II of Naples, Italy, Visiting Scholar at Loyola Law School, Loyola Marymount University, Los Angeles, California. Admitted to the Italian Bar. I am grateful to Christopher May, Massimo Iovane, Eduardo Savarese and Fulvio M Palombino for their thoughtful advice and comments, which have greatly improved this article. Thanks are due to Odysseas Repousis, Lisa M Bohmer and Loris Marotti for their constructive comments.

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233Power of Reconsideration IN RECENT ICSID CASE LAW


1 Introduction

In recent years, ICSID tribunals are increasingly being asked to reconsider and revise prior decisions before a final award has been rendered, bringing to the fore divergent views of scholars, practitioners and arbitrators.1 The increase in requests for reconsideration is linked to the increasing use of bifurcated pro-ceedings. Bifurcation has traditionally been associated with a separation of the jurisdictional phase of a case from its merits phase. Such bifurcation may lead to a request for reconsideration or revision of an interim jurisdictional deci-sion. However, a more recent form of bifurcation distinguishes between the merits of the dispute and the quantum phase, or between different questions relating to the merits. While the ICSID Convention and the ICSID Arbitration Rules both specifically recognize the use of bifurcated decisions on jurisdic-tion and the final award, they are silent as to the use of interim decisions on the merits. The question that we address here is the extent to which reconsidera-tion is available for bifurcated decisions of either type. The answer, as we will see, hinges in part on how one classifies such interim rulings in terms of their finality for res judicata purposes.

Pursuant to Article 48 of the ICSID Convention, only a decision that deals with every question submitted by the parties and that sets forth its reasoning as to each can be designated as an ‘award’. In this sense, the ICSID Convention clearly distinguishes an award from previous interim decisions. While it is com-mon ground that an award is final and therefore has res judicata effect, it is still

1 See, eg, Lisa M Bohmer, ‘Finality in ICSID Arbitration Revisited’ (2016) 31(1) ICSID Rev-FILJ 236; Mélida Hodgson, ‘Case Comment: Churchill Mining PLC and Planet Mining Pty Ltd v Republic of Indonesia: Procedural Order No 15 – Reconsideration Under the ICSID Convention: No Award Required’ (2016) 31(1) ICSID Rev-FILJ 114. See Matthew Weiniger and Alejandro I Garcia, ‘Apropos of ConocoPhillips v Venezuela: Revision of Earlier Decisions in Fragmented Proceedings – A Matter of Principle?’ (Kluwer Arbitration Blog, 27 March 2014) <http://kluwerarbitrationblog.com/blog/2014/03/27/apropos-of-conocophillips-v-venezuela -revision-of-earlier-decisions-in-fragmented-proceedings-a-matter-of-principle/> accessed 15 November 2015; Mark W Friedman, Jennifer Lim and Ina C Popova, ‘Perenco v Ecuador Deters 2nd-Guessing Arbitration Tribunal’ (Law360, 7 May 2015) <www.law360 .com/articles/651147/perenco-v-ecuador-deters-2nd-guessing-arbitration-tribunal> accessed 15 November 2015; Andrew McDougall and Samy Markbaoui, ‘ConocoPhillips Petrozuata, ConocoPhillips Hamaca BV and ConocoPhillips Gulf of Paria BV v Bolivarian Republic of Venezuela’ (2014) 15 JWIT 1062, 1069. Jarrod Hepburn, ‘Analysis: Tribunal’s Decision to Re-Open Corruption Issue in Bangladesh Case Does Not Delve Into Ongoing Debate Over Powers of Reconsideration’ (IAReporter, 16 June 2016) <http://tinyurl.com/hzglpu4> accessed 14 July 2016.

http://kluwerarbitrationblog.com/blog/2014/03/27/apropos-of-conocophillips-v-venezuela-revision-of-earlier-decisions-in-fragmented-proceedings-a-matter-of-principle/

http://kluwerarbitrationblog.com/blog/2014/03/27/apropos-of-conocophillips-v-venezuela-revision-of-earlier-decisions-in-fragmented-proceedings-a-matter-of-principle/

http://www.law360.com/articles/651147/perenco-v-ecuador-deters-2nd-guessing-arbitration-tribunal

http://www.law360.com/articles/651147/perenco-v-ecuador-deters-2nd-guessing-arbitration-tribunal

http://tinyurl.com/hzglpu4

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unclear whether interim decisions are final in the same sense.2 Because the ICISD Convention does not explicitly address the finality of pre-award deci-sions, the issue is one that ICSID tribunals have struggled with in the face of a steadily-increasing number of requests for reconsideration of interim decisions.

In exploring the issue of the powers of reconsideration of arbitral tribunals, we will focus on three recent ICSID cases: ConocoPhillips v. Venezuela,3 decided in 2014; Perenco v. Ecuador,4 issued in 2015; and Standard Charter Bank (Hong Kong) Ltd. v. Tanzania Electric Supply Co. Ltd. (TANESCO),5 decided in 2016. In ConocoPhillips, the Tribunal was deeply split. While arbitrator Abi-Saab, in a powerful dissent, urged that the Tribunal possesses an inherent power of recon-sideration, the decision of the majority rejected this. A year later, in Perenco, Ecuador relied on Abi-Saab’s dissent to argue that the Tribunal had an inherent power to reverse its earlier interim decision where doing so was ‘in the interest of justice’.6 But the Tribunal sided with the ConocoPhillips majority and rejected the motion for reconsideration. Then came the 2016 ruling in TANESCO, which may herald the dawn of a new era. In it, for the first time, an ICSID tribunal, endorsing the reasoning of Abi-Saab, reconsidered and reversed a previous decision after finding that it had been deliberately misled by Respondent. It is too early to know whether the TANESCO decision will stand, for Respondent has vowed to file an appeal seeking an annulment of the award.7

These three cases represent the current case law on the matter. While ConocoPhillips and Perenco reflect what has been the traditional view,8

2 See Bohmer (n 1) 239.3 ConocoPhillips Petrozuata BV, ConocoPhillips Hamaca BV and ConocoPhillips Gulf of Paria

BV v Bolivarian Republic of Venezuela, ICSID Case No ARB/07/30, Decision on Respondent’s Request for Reconsideration (10 March 2014).

4 Perenco Ecuador Ltd v The Republic of Ecuador and Empresa Estatal Petróleos del Ecuador (Petroecuador), ICSID Case No ARB/08/6, Decision on Ecuador’s Reconsideration Motion (10 April 2015).

5 Standard Chartered Bank (Hong Kong) Ltd v Tanzania Electric Supply Company Ltd (TANESCO), ICSID Case No ARB/10/20, Award (12 September 2016).

6 Perenco (n 5), Ecuador Motion of Reconsideration (19 December 2014) para 97.7 See Tanzania Daily News (Dar es Salaam, 23 September 2016) <http://allafrica.com/stories/

201609230668.html> accessed 1 November 2016.8 The issue has been addressed subsequently in Churchill Mining PLC and Planet Mining Pty Ltd

v Republic of Indonesia, ICSID Case No ARB/12/14, Procedural Order No 15 (12 January 2015), Burlington Resources, Inc v Republic of Ecuador, ICSID Case No ARB/08/5, Hearing on quan-tum and on the Request for Reconsideration (2 March 2015–6 March 2015) and Niko Resources (Bangladesh) Ltd v Bangladesh Petroleum Exploration & Production Company Limited (Bapex), and Bangladesh Oil Gas and Mineral Corporation (Petrobangla), ICSID Case Nos ARB/10/11 and ARB/10/18, Procedural Order No 16 (14 November 2016) paras 14, 38(i) (merely assuming

http://allafrica.com/stories/201609230668.html

http://allafrica.com/stories/201609230668.html



TANESCO takes the position that we advocate for in this article. Even if the doctrine of stare decisis operates only on factual grounds in the ICSID system,9 the ConocoPhillips and Perenco approach will make it much more difficult for dissatisfied parties to obtain a revision on issues over which an ICSID tribunal has rendered only an interim decision.10 This article argues that Abi-Saab’s dis-senting opinion in ConocoPhillips and the ruling in TANESCO reflect the better resolution of the core issue. To deny a request for reconsideration when it is clear that the tribunal rendered the award based on erroneous factual prem-ises would compromise the ‘legitimacy of investor-State resolution’ and the ‘very idea of adjudication’ in general.11 In striking the right balance between finality and justice, and between predictability of outcome and the correct-ness of an award, a tribunal should at least sometimes be allowed to protect the integrity of its proceedings by prioritizing correctness over finality. How to achieve this goal, however, is a more difficult question, absent any specific regulation addressing the question. Yet, it is possible to discern the general contours of such a reconsideration principle that respects the importance of both finality and justice.

The analysis will proceed as follows. Part 2 of this article briefly sum-marizes the relevant aspects of the disputes in ConocoPhillips, Perenco, and TANESCO: the decision on jurisdiction and merits in ConocoPhillips; the dis-senting opinion of Professor Abi-Saab in that case; the subsequent decision on jurisdiction and liability in Perenco; and the award in TANESCO. Part 3 focuses on the doctrine of inherent powers, analysing its scope and legal source, both in international adjudication and in investment arbitration. Part 4 addresses the inherent tension between the power of reconsideration in ICSID arbitra-tions and the principle of res judicata. It will evaluate the boundaries of both concepts and suggest a way in which they can be reconciled.

arguendo that a power of reconsideration exists, but not resolving the question). As their conclusions do not add original points to the debate, and simply refer to the reasoning of ConocoPhillips, for the purpose of this article we will focus on ConocoPhillips, Perenco and TANESCO as reflecting the two different approaches of ICSID tribunals.

9 See on this issue Fulvio M Palombino, Il trattamento «giusto ed equo» degli investimenti stranieri (Il Mulino 2012) 173 ff; Lucy Reed, ‘The de facto Precedent Regime in Investment Arbitration: A Case for Proactive Case Management’ (2010) 25(1) ICSID Rev-FILJ 95; Stephan W Schill, The Multilateralization of International Investment Law (CUP 2009) 278–361.

10 See Friedman, Lim and Popova (n 1) 3.11 See Bohmer (n 1) 243. See also ConocoPhillips (n 3), Dissenting Opinion of Georges Abi-

Saab, para 67.

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2 ConocoPhillips, Perenco, and TANESCO

In order to understand the issues related to the cases, it is necessary to start with a brief description of the factual background and the most relevant phases of the three disputes.

2.1 ConocoPhillips

2.1.1 The Majority DecisionThe ICSID proceedings in ConocoPhillips v. Venezuela12 began in November 2007 and concerned the Netherlands-Venezuela Bilateral Investment Treaty (BIT) and Venezuela’s Foreign Investment Law. The Claimants based their claims for compensation on a number of changes in the law, and on mea-sures concerning three extra-heavy oil projects that led to the breach of sev-eral clauses of the BIT and the Foreign Investment Law. On 3 September 2013, the Tribunal bifurcated the proceedings, issued a decision on jurisdiction and on the merits. Among others things, it found Venezuela to have ‘breached its obligation to negotiate in good faith for compensation’.13 The Tribunal then assigned the quantum issues to a subsequent stage of the proceedings.14

Immediately following the decision, on 8 September 2013, Venezuela moved for reconsideration. In its motion, Venezuela alleged that the Arbitral Tribunal has been under ‘certain misapprehensions’ in reaching its conclusions with respect to the progress of the negotiations between the parties because Claimant’s representations were patently false.15 Indeed, in November 2010, after the hearing of the case, WikiLeaks16 released US embassy classified cables, which demonstrated that Venezuela had engaged in good faith negotia-tions with ConocoPhillips. The cables left no doubt that the representations made by ConocoPhillips to the tribunal regarding respondent’s unwillingness

12 ibid. For a deeper analysis see McDougall and Markbaoui (n 1) 1062–1069.13 ConocoPhillips (n 3), Decision on Jurisdiction and Merits (3 September 2013) para 401.14 The arbitration continued for determination of ‘all other questions, including those con-

cerning the costs and expenses’, ibid para 404(g).15 In particular with respect to the issue of good faith negotiation of compensation for the

2007 nationalization and with respect to the parties’ confidentiality commitments. Letter to Tribunal Regarding Decision on Jurisdiction and Merits (8 September 2013) 1 <www .italaw.com/sites/default/files/case-documents/italaw1583.pdf> accessed 2 June 2016.

16 A non-profit organization that publishes submissions from anonymous whistleblowers, specialized in the analysis and publication of large datasets of censored or otherwise restricted official materials involving war, spying and corruption.

http://www.italaw.com/sites/default/files/case-documents/italaw1583.pdf

http://www.italaw.com/sites/default/files/case-documents/italaw1583.pdf



to negotiate fair market value had been completely false.17 The records showed that many compensation meetings had been held over a long period of time, both before and after the parties entered into a confidentiality agreement.

Since the Tribunal majority had relied on Claimants’ misrepresentations in reaching its conclusion on bad faith negotiation, Respondent expected that the Tribunal would want to reconsider its decision on the merits in order to avoid an obvious and gross miscarriage of justice.18 The expectation was based on the premise that every tribunal has the power to re-open a case and amend its own decision while the case is still pending before it, and that it should exercise that power if the decision was indeed based on patently false representations.

In support of its Request for Reconsideration, Respondent noted that the ICSID framework presented a lacuna concerning the power of an arbitral tri-bunal to revise a decision. Under Article 44 of the ICSID Convention, they argued that the Tribunal had the power to fill this gap and therefore pos-sessed the power to reconsider.19 Article 44 of the ICSID Convention, said the Respondent, recognized the ‘well-established principle’ that tribunals have inherent powers to make decisions regarding the conduct of proceedings going beyond the specific rules under which they are constituted.20 Respondent also contended that a Tribunal that was ‘still in session’ could always revise its ‘interim’ and ‘preliminary’ decisions,21 and that the Tribunal in this case was therefore empowered to do so since the proceedings were still open with respect to quantum.22

In contrast to Respondent’s characterization of the decision as being interim, Claimants asserted that the relief sought by Respondent was ‘unprec-edented’ in ICSID practice.23 Stressing the principle of finality of arbitration under Article 53 of the ICSID Convention, Claimants viewed the decision ‘as having res judicata effect’ and therefore as being challengeable only through the post-award remedies provided for by Articles 49 through 52 of the ICSID Convention.24 The ICSID system, they noted, ‘[f]orbids appeal entirely, and

17 ConocoPhillips (n 3), Respondent Application for Reconsideration of Decision (10 August 2015) 5.

18 ibid.19 See ConocoPhillips (n 3), Decision on Respondent’s Request for Reconsideration, para 11.20 ibid.21 ibid para 12 (quoting Second Brief of the Bolivarian Republic of Venezuela Pursuant to the

Tribunal’s Request of 1 October 2013 (25 November 2013) paras 2–13 and 25).22 ConocoPhillips (n 3) para 20.23 ibid para 18.24 ibid (quoting claimants’ Second Submission on Respondent’s Application for Recon-

sideration of the Decision on Jurisdiction and the Merits, and Suspension of the Quantum Proceedings).

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restricts even the extraordinary review mechanisms provided for in the Convention until after a final award is issued’.25 Unlike other systems of inter-national arbitration, they said, ‘the drafters of the Convention consciously chose to permit only one instrument called an award and to defer any rem-edies until after its issuance’.26

In dismissing Respondent’s Request for Reconsideration, the two-member ConocoPhillips majority (Kenneth Keith and L. Yves Fortier) focussed on whether a Tribunal had the power to reconsider a decision. They ruled that the Decision on Jurisdiction and the Merits did not constitute an award within the meaning of Article 53 of the ICSID Convention, which makes the final award binding on the parties and subject to the exceptional remedy of annul-ment by ad hoc committees on the grounds listed in Article 52 of the ICSID Convention. Instead, a decision qualified as an award under Article 53 of the ICSID Convention only at the end of the merits-quantum phase, a stage not yet reached in that case.27

At the same time, the majority noted that the Tribunal’s Decision on Jurisdiction and the Merits was not of an ‘interim or preliminary form’ as to the matters decided; instead, it fully and finally resolved those issues, and hence would be incorporated in the final award and as a result it rejected the recon-sideration request.28 It also emphasized that the decision resolved an issue that was in dispute between the parties. It would therefore have res judicata effect ‘as a matter of principle and practice’.29 Citing the Electrabel v. Hungary case, the majority stressed that tribunal decisions ‘are intended to be final and not to be revisited by the Parties or the Tribunal in any later phase of their arbi-tration proceedings’.30 In short, while the majority held that the Decision on Jurisdiction and the Merits was not an award for purposes of Articles 48 and 53 of the ICSID Convention, it nevertheless had full res judicata effect and could not later be revisited.

In dismissing the application for reconsideration, the majority stated that Article 44 of the ICSID Convention, on which Respondent relied, was designed to fill procedural gaps and did not confer a ‘broad unexpressed power’ of

25 ibid.26 ibid para 18.27 ibid para 19. The only reason supporting the Respondent’s assertion would have been

merely a temporal one: ‘a further stage in the proceedings, relating to quantum, remains’, ibid para 20.

28 ibid.29 ibid para 21.30 ibid (citing Electrabel SA v Hungary, ICSID Case No ARB 07/19, Decision on Jurisdiction,

Applicable Law and Liability (30 November 2012) para 10.1).



reconsideration.31 Moreover, the overall structure of the ICSID Convention was plainly designed to allow for review of a tribunal’s decisions after an award pursuant to Articles 48 and 53 of the ICSID Convention had been rendered32 – something that had not yet occurred here. After such an award has been entered, Articles 50 through 52 of the ICSID Convention would allow a tribu-nal to interpret and revise an award, and allow an ad hoc committee to annul an award on limited grounds. Those were the only ways through which the September 2013 Decision on Jurisdiction and the Merits could be, in the major-ity’s view, questioned, changed or set aside.33

2.1.2 The Dissenting Opinion of Professor Abi-SaabProfessor Georges Abi-Saab strongly disagreed with the ConocoPhillips’ major-ity. He took a more flexible ‘teleological’ view of an arbitral tribunal’s power to revisit its own decisions.34 The majority’s conclusion that Respondent had not negotiated in good faith with ConocoPhillips was, in his eyes, based on ‘extraor-dinary speculative reasoning . . . extrapolated from an erroneously established fact’.35 In this regard, the WikiLeaks cables would provide unquestionable evidence that the majority’s findings on good faith negotiation were simply wrong. Under such circumstances, said Prof. Abi-Saab, when confronted with elements of a possible material error in the establishment of facts:

I don’t think that any self-respecting Tribunal that takes seriously its overriding legal and moral task of seeking the truth and dispensing jus-tice according to law on that basis, can pass over such evidence, close its blinkers and proceed to build on its now severely contestable findings, ignoring the existence and the relevance of such glaring evidence.36

Instead, he believed, the ICSID arbitration system provided for a general power of reconsideration where, as here, a tribunal had merely issued a partial rather than a final decision.37

31 ConocoPhillips (n 3) para 22.32 ibid para 23.33 ibid.34 See Weiniger and Garcia (n 1). See also McDougall and Markbaoui (n 1) 1065.35 ConocoPhillips (n 3), Dissenting Opinion of Georges Abi-Saab, para 18.36 ibid paras 66–76.37 The aforementioned decision did not address the whole quantum issue; in this sense it

could be considered not ‘final’, ibid para 32.

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Professor Abi-Saab accepted the majority’s literal interpretation, and noted their references to the ‘principle[s] and practice’ of the ICSID system.38 The incorporation of interim decisions in the final award is not only a matter of practice, but also one of legal necessity.39 According to Article 48(3) of the ICSID Convention, which provides that ‘[t]he award shall deal with every question submitted to the tribunal’, the final award must incorporate any conclusions (findings and decisions) on a question submitted to the tribu-nal that it would have formulated before the final award,40 for ‘final’ means ‘definitive’ and implies that the tribunal has deployed and totally discharged its adjudicative function.41 In this regard, an incomplete arbitral award would not correspond to the substantive definition of ‘award’ in Article 48(3) ICSID Convention. Instead, earlier decisions became final only when they are incor-porated into the final award. Before then, a fortiori, such earlier rulings were interim and subject to review by an arbitral tribunal.42

That only a final award should have res judicata effect is admittedly a ‘pecu-liarity’ of the ICSID system. By contrast, other international procedural sys-tems, such as those of the International Court of Justice (ICJ), the International Criminal Court and the European Court of Human Rights, provide for interim decisions in the form of final judgments or awards open to whatever remedies are available in these diverse systems.43 Abi-Saab thus recognized that the ICSID procedural rules constitute a lex specialis in this regard.44 The rationale for this ICSID peculiarity is to have all the contested issues in a case resolved in a kind of ‘package deal’, so as to ensure that, in deciding them, the tribunal will have clearly in mind the total ‘balance of equities’.45 Finality thus comes with the closure of this ‘all-inclusive package’, in the form of the so-called ‘award’.46 Until that moment, all of the components of the package, i.e. partial decisions, remained on the table and were ‘amenable to rectification and adjustment’.47 In short, in the dissenter’s view, ICSID partial decisions were not final, and could be reconsidered by an ICSID tribunal.

38 ibid para 37.39 ibid para 38.40 ibid.41 ibid para 39.42 ibid para 40.43 ibid para 42.44 ibid.45 ibid para 43.46 ibid paras 43–44.47 ibid para 44.



Professor Abi-Saab also noted that support for the power of an ICSID tribu-nal to reconsider its interim decisions can be found in Article 44 of the ICSID Convention. This provision, cited by Respondent, but summarily dismissed by the majority as being merely procedural nature, in effect constitutes a partial codification and specific application of the inherent jurisdiction or power of any judicial or adjudicative organ.48

2.2 PerencoThe year after ConocoPhillips was handed down, the Tribunal in Perenco v. Ecuador decided on the same issue. Perenco Ecuador Limited was the sole operator and majority shareholder of rights in two oil blocks under two production-sharing contracts entered into between Ecuador’s national oil company and several foreign investors. Claims arose out of Ecuador’s Law No. 42 enacted in June 2006 and Decree No. 662 issued in October 2007. These provisions imposed a 99% windfall levy on foreign oil revenues and allegedly resulted in the expropriation of Perenco’s investment.

The arbitration started in April 2008 and proceeded in separate phases on jurisdiction, liability, counterclaims and quantum. On 12 September 2014, the Tribunal issued its Decision on Remaining Issues of Jurisdiction and on Liability, which found that Ecuador had violated various obligations under the France-Ecuador BIT, as well as certain contractual obligations. As in Conoco Phillips, the quantum stage of the proceedings remained open.

Ecuador moved to re-open the decision and amend some of its substantive findings in November 2014, but the Tribunal denied that motion on 10 April 2015.49 In its Motion for Reconsideration, Ecuador contended that the Tribunal had the power to re-open the case and amend its decision, and that that power should be exercised because of the ‘repeated instances of the [Tribunal’s] omitting to determine issues put to it, violating fundamental rules of proce-dure, manifestly exceeding its powers and failing to state the reasons’ on which the decision was based.50

Ecuador also argued that contrary to the holding in ConocoPhillips, deci-sions preceding the final award did not have res judicata or other preclusive effect.51 In support, it cited a statement made by Professor Schreuer with respect to Article 51 of the ICSID Convention: ‘while the procedure for revision was designed for situations in which the tribunal has terminated its activity

48 ibid para 54.49 Perenco v Ecuador (n 4).50 ibid para 5 (citing Ecuador’s Motion for Reconsideration, para 3).51 Perenco v Ecuador (n 4) paras 17–19.

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and issued a final award, [a] tribunal that is still in session can always revise its preliminary decisions informally’.52 Ecuador relied in particular on Article 52 of the ICSID Convention, which provides for the remedy of annulment of an ICSID award on five specific grounds by an ad hoc annulment committee. In Ecuador’s view, because the annulment grounds justify the reversal of a final ICSID award, it necessarily followed that upon a showing of these grounds prior to the making of a final award, a tribunal had to have the power to re-open, amend or reverse these interim decisions.53

Finally, Ecuador urged that a tribunal had the inherent power to reconsider its decisions in cases where there are overarching exceptional circumstances, or where doing so was in the interest of justice.54 For this argument, Ecuador relied on Article 44 of the ICSID Convention and the Dissenting Opinion of Abi-Saab in ConocoPhillips.55

The Tribunal rejected these arguments, concluding that none of the ICSID Convention’s Articles or the ICSID Arbitration Rules invoked by Ecuador vested it with a power ‘to re-open, amend and/or reverse a decision prelimi-nary to its award’.56 According to the Tribunal, once it had decided with finality any of the legal or factual questions presented to it, the decision became res judicata and could not be revised,57 except in the specific circumstances pro-vided for in Article 51 of the ICSID Convention which provides that:

Either party may request revision of the award . . . on the ground of dis-covery of some fact of such a nature as decisively to affect the award, provided that when the award was rendered that fact was unknown to the Tribunal and to the applicant and that the applicant’s ignorance of that fact was not due to negligence.

The Tribunal concluded that no new, potentially decisive facts existed that would justify a revision of the decision under Article 51 of the ICSID Convention.58

The Tribunal also focused on the annulment procedure set forth in Article 52 of the ICSID Convention. This clarified the difference between the role and powers conferred upon a tribunal involved in resolving the dispute, and the

52 ibid para 7.53 ibid para 29.54 ibid para 19.55 ibid para 21.56 ibid para 97.57 ibid para 43.58 ibid para 50.



powers conferred upon an ad hoc annulment committee.59 As intended by the ICSID Convention, the roles of both bodies were different and had to remain separate.60 The power to re-open, amend or reverse a decision under Article 51 of the ICSID Convention could not be inferred from the annulment procedure in Article 52 of the ICSID Convention, for a tribunal acting like an annulment committee would exceed its lawful powers.61

The Perenco v. Ecuador tribunal also held that a general appeal to inher-ent powers could not override the clear structure of the ICSID Convention and the ICSID Rules.62 In addition, it rejected the argument that Article 44 of the ICSID Convention allowed for reconsideration of a decision. The circum-stances under which a tribunal could reconsider an award were addressed in very narrow terms in both the ICSID Convention and the ICSID Arbitration Rules.63 The ‘absence’ of a general power to re-open and reverse awards did not create a procedural gap that needed to be filled.64

Finally, with respect to Prof. Abi-Saab’s Dissenting Opinion in ConocoPhillips, the Tribunal noted that the specific situation that concerned Abi-Saab was not present in Perenco,65 for in ConocoPhillips, Venezuela had adduced new and potentially significant evidence that was not available when the tribunal ren-dered its earlier decision on the merits.66 No such new evidence was involved in Perenco. Instead, while the WikiLeaks cables in ConocoPhillips represented irre-futable proof that undermined the core of the decision, the motion in Perenco’s case, largely based on alleged procedural violations, essentially constituted a request for reconsideration without the submission of any new evidence.

In sum, though it invoked different reasoning, the Perenco tribunal endorsed the ConocoPhillips majority conclusion that ICSID tribunals simply do not possess a power of reconsideration – at least not one that is based on the text of the ICSID Convention or Arbitration Rules.

2.3 TANESCOThe dispute in SCB HK v. TANESCO arose out of a Power Purchase Agreement (PPA) concluded between the Respondent and Independent Power Tanzania

59 ibid para 27.60 ibid para 33.61 ibid para 34.62 ibid para 80.63 ibid para 77.64 ibid.65 ibid para 86.66 ibid para 87.

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Limited (ITPL), which was the owner of an electricity plant in Tanzania. Claimant SCB HK filed the ICSID case acting as security agent and assignee of ITPL’s rights. The case concerned money allegedly owed by TANESCO to ITPL, after TANESCO had stopped making payments on the ground that the agreed tariff needed to be recalculated.

The Claimant originally sought a declaration from the Tribunal that the Respondent owed those payments under the PPA. In its Decision on Jurisdiction and Liability of 12 February 2014, the Tribunal stated that while it could make a declaration of the amount owed, it could not issue an order for payment of that amount, as that would interfere with ITPL’s administrator’s rights.67

The Claimant subsequently argued that the Respondent had misled the Tribunal by failing to disclose that it had already settled a dispute with ITPL emptying an escrow account that should have been used as protection for the interests of the Claimant in collecting any judgement. The Tribunal, requested to reconsider its previous decision, had ‘no difficulty in concluding that the failure of Respondent to disclose these facts was anything other than deliber-ate’ and ‘misleading’.68 It then went on to hold that even though the ICSID Convention and rules do not expressly allow tribunals to reconsider their decisions, and even though previous tribunals – namely ConocoPhillips and Perenco – had declined to do so, the Tribunal in fact possessed the power to reconsider its earlier decisions. The TANESCO tribunal did just that, and issued an order of payment in Claimant’s behalf of nearly USD 150 million, plus interest until the award was paid.69

In sum, TANESCO’s approach is clearly different from, and in many ways contrary to, that taken by the tribunals in ConocoPhillips and Perenco. As for the relationship between a decision and an award, while the majority in ConocoPhillips concluded that interim decisions were indeed res judicata, in the view of TANESCO this statement was ‘at the very least too broad’. According to TANESCO, tribunals make decisions on procedural matters and on provisional measures, all of which were subject to being reconsidered, despite the absence of anything in the Convention authorizing this.70 Moreover, the Tribunal stated that it ‘ha[d] difficulty’ seeing how interim decisions of tribunals could have the character of res judicata when, under the Convention, they only attained that status under Article 53(1) of the ICSID Convention once they

67 TANESCO (n 5) para 227.68 ibid paras 333–335.69 ibid para 414.70 ibid para 311.



were incorporated into the final award.71 Accordingly, while an essential fea-ture of res judicata was that the decision in question produced effects on the parties outside the proceedings in which it is granted, tribunals’ interim deci-sions were only binding within the scope of the proceedings; this did not, how-ever, make them res judicata.72

In dealing with the ConocoPhillips and Perenco decisions, the TANESCO tribunal criticized their conclusion on the legal effect of interim decisions. Even if they sustained that it ‘fi[t] within a well-established view’, they did not offer any additional reasoning on which that conclusion was based.73 On the contrary, the TANESCO tribunal was of the view that it was incorrect to characterize the decisions of ICSID tribunals, as opposed to their awards, as res judicata.74 The Tribunal pointed out that if the decision that a Claimant wished to reopen were res judicata, then by analogy with Article 51 of the ICSID Convention, it might still be reopened in defined circumstances. And if it were not res judicata, then a fortiori it could be reopened without the con-straints of the requirements of Article 51 of the ICSID Convention. Yet, said the Tribunal, even if the conclusion were that decisions do have res judicata effect, this would not provide a sufficient answer to the question of whether a tribunal has the power to reopen them.75

While the ConocoPhillips and Perenco tribunals rejected the idea of a gen-eral power to reopen, as well as a specific power to reopen under the particu-lar facts of those cases,76 TANESCO concluded that since there was nothing in the ICSID Convention that prohibited the reopening of decisions, the starting point as the general power of the tribunal under Article 41(1) of the ICSID Convention to determine its own competence.77 Yet, the question for the TANESCO tribunal was not whether there was a specific power to recon-sider under the Convention – ‘clearly there [was] not’78 – but whether, in the absence of a specific power, the right of a tribunal to determine its own com-petence was limited. Accordingly, the Tribunal criticized the ConocoPhillips’ and Perenco’s refusal of using Article 44 of the ICSID Convention as a basis for

71 ibid para 312.72 ibid para 313.73 ibid para 318.74 ibid.75 ibid.76 ibid para 317.77 ibid para 319.78 ibid para 320.

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admitting a reconsideration request.79 It went on stating that their reasoning was not ‘compelling’ as the power to reopen a decision involved both proce-dural and substantive aspects, and in any case the reference in Article 44 of the ICSID Convention to ‘any question of procedure’ did not trammel the broader power of a tribunal under Article 41 of the ICSID Convention to determine its own competence.80

In sum, in the Tribunal’s view, the two grounds raised by the Claimant, namely the error of law in the Tribunal’s decision and the subsequent coming to light of new facts withheld by Respondent, justified the reconsideration of its earlier decision.

3 The Doctrine of Inherent Powers

In reaching the decision that it did, the Perenco tribunal underplayed what is perhaps the most powerful argument present in both ConocoPhillips and Perenco, and later endorsed in TANESCO, namely that a power of reconsid-eration is an inherent power, rather than one that must be conferred by some provision of law. We will first briefly examine the doctrine of inherent powers, for it is precisely this concept to which Professor Abi-Saab referred in his dis-sent to justify the existence of a power of reconsideration.

3.1 Legal Source and Scope of Inherent Powers in International Adjudication

The adjective ‘inherent’ is used to describe something which ‘exist[s] in some-thing as a permanent attribute or quality; . . . esp. a characteristic or essential element of something’.81 As a source of judicial power,82 inherent powers appear to have their origin in the practice of English courts.83 However, today,

79 ibid para 319.80 ibid para 320.81 Oxford English Dictionary, vol V (1933 edn) 293. See Chester Brown, ‘Inherent Powers in

International Adjudication’ in Cesare Romano, Karen J Alter and Yuval Shany (eds), The Oxford Handbook of International Adjudication (OUP 2014) 828, 833. See also David D Caron and Lee M Caplan, The UNCITRAL Arbitration Rules: A Commentary (2nd edn, OUP 2013) 1111; Benjamin H Barton, ‘An Article I Theory of the Inherent Powers of the Federal Courts’ (2012) 61(1) Cath U L Rev 1.

82 In this sense see Brown (n 81) 830.83 ibid. English courts have invoked their inherent jurisdiction to exercise certain proce-

dural powers, and in general powers not expressly provided for in the instruments regulating their jurisdiction; see Metropolitan Bank v Pooley (1885) 10 App Cas 210, 220–21 (Lord Blackburn).



many courts of other common law and civil law countries claim inherent pow-ers in a variety of instances.84 Inherent powers are, in this sense, those powers that are not explicitly granted to the tribunal but that are necessary to judicial functioning.85 Yet, despite the well-established exercise of inherent powers by domestic jurisdictions, there is general disagreement as regards the source of these powers.86

Reference to inherent powers can also be found in the practice of many international courts.87 As the International Criminal Tribunal for the former Yugoslavia (ICTY) has ruled, what in international law is termed ‘original’, ‘pri-mary’, or sometimes ‘substantive’ jurisdiction does not include ‘incidental’ or ‘inherent’ jurisdiction, for the latter derives automatically from the exercise of the judicial function.88

Some scholars have suggested that jurisdictional powers that are not expressed in the constitutive instruments of international courts and tribu-nals are nevertheless a necessary attribute of all international jurisdictions.89 It could not be otherwise, ‘as it is neither possible nor desirable to provide for any contingency of international adjudication [and] depriv[e] [the court] of any flexibility to adjust its function to the circumstances of each case’.90 As Paola Gaeta has stated: ‘The doctrine of inherent powers constitutes at the same time the source and legal justification for the exercise of such powers’.91

The doctrine of inherent powers, however, is not distinctly defined, nor is it consistently applied. International courts and tribunals often exercise inher-ent powers without being fully aware of what they are doing. They also some-times unnecessarily cite some other justification for their authority, rather than

84 Chester Brown, ‘The Inherent Powers of International Courts and Tribunals’ (2005) 76 BYIL 195, 206; Paola Gaeta, ‘The Inherent Powers of International Courts and Tribunals’ in Lal Chand Vohrah and others (eds), Man’s Inhumanity to Man: Essays on International Law in Honour of Antonio Cassese (Kluwer Law International 2003) 365.

85 See Caron and Caplan (n 81) 1111–1126.86 See also Martin Dockray, ‘The Inherent Jurisdiction to Regulate Civil Proceedings’ (1997)

113 Law Quarterly Review 120.87 See Juan A Carillo Salcedo, ‘The Inherent Powers of the International Criminal Tribunal

for The Former Yugoslavia to Issue “subpoeana duces tecum” to a Sovereign State’ in René-Jean Dupuy (ed), Melanges en l’honneur de Nicolas Valticos (Droit et Justice 1999) 269 ff.

88 See Prosecutor v Dusko Tadic a/k/a ‘DULE’, Decision on the Defence Motion for Interlocutory Appeal on Jurisdiction (2 October 1995) para 14.

89 In this sense Constantinos Salonidis, ‘Inherent Powers in ICSID Arbitration’ in Ian Laird and Todd Weiler (eds), Investment Treaty Arbitration and International Law, vol 5 (Juris 2012) 43 (citing Gaeta (n 84) 371).

90 See Salonidis (n 89) 43.91 Gaeta (n 84) 353–71.

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recognizing that it is inherent.92 There is still ‘confusion’ today as to which courts hold inherent jurisdiction and as to ‘the nature and scope of inherent jurisdiction as well as inherent powers’.93 Adding to the confusion, the terms ‘inherent’, ‘implied’ and ‘incidental’ are sometimes used interchangeably to describe ‘the exercise of unexpressed jurisdictional powers’.94

Moreover, much criticism has been expressed as to the frequent practice of international courts and tribunals taking for granted the existence of inherent powers, often by simply citing the practice of other international courts but without any real attempt to explain their legal basis.95

There are essentially five schools of thought concerning inherent judi-cial powers. According to the first, inherent powers are those powers which, though not provided for in the court’s constitutive instrument, are conceived specifically by general principles of international law found in foro domestico, or by general principles of law common to major national legal systems.96 As concerns their legal basis, this approach mainly refers to a general principle within the meaning of Article 38(1)(c) of the Statute of the International Court of Justice.97

According to a second school of thought, the notion of inherent powers covers all those powers that derive exclusively from the ‘judicial nature of the body’ and that are necessary to the administration of justice.98 In a way similar to the first school of thought,99 this second school points more generally to customary international law as the source of inherent powers.100

92 See Salonidis (n 89) 43.93 See Joseph Rosara, ‘Inherent Jurisdiction and Powers in New Zealand’ (2005) 11 Canterbury

LRev 220, 225.94 See Salonidis (n 89) 43; Joost Pauwelyn, Conflict of Norms in Public International Law: How

WTO Relates to Other Rules of International Law (CUP 2003) 447–48.95 Cf Salonidis (n 89) 44. See eg Gaeta (n 84) 354–55, 358–61.96 See Shabtai Rosenne, The Law and Practice of the International Court of Justice, vol II

(Martinus Nijhoff 1920–1996) 600–1.97 Bin Cheng, General Principles of Law as Applied by International Courts and Tribunals

(CUP 1953) 259–78.98 See Gaeta (n 84) 354 and Gerald Fitzmaurice, The Law and Procedure of the International

Court of Justice, vol II (CUP 1986) 770–71; Anthony Arnull, ‘Does the Court of Justice Have Inherent Jurisdiction?’ (1990) 27(4) CMLR 700–7.

99 Martins Paparinskis, ‘Inherent Powers of ICSID Tribunals: Broad and Rightly So’ (2011), available at SSRN: <https://ssrn.com/abstract=1876705> accessed 2 June 2016; Brown (n 84) 228.

100 See Special Tribunal for Lebanon, Appeals Chamber, Case No CH/AC/2010/02, Decision on Appeal of Pre-Trial Judge’s Order Regarding Jurisdiction and Standing (10 November 2010) 47.

https://ssrn.com/abstract=1876705



Thirdly, some use the term ‘inherent powers’ as a synonym for ‘implied powers’.101 According to this school of thought, inherent powers are those derived by necessary implication from the constitutive instruments of an inter-national judicial organ, as being essential to the discharge of its functions.102 Notwithstanding this attempt to combine the two concepts, the distinction between inherent powers and implied powers is clear enough: ‘the former con-cept relates to the nature of the powers, while the latter explains the manner of their exposition in the particular instrument’.103 As stated in The UNCITRAL Arbitration Rules Commentary: ‘Inherent powers . . . imply something more than implied powers’.104 Hence inherent powers may be either implied or expressly set out.105

Under a fourth approach, inherent powers are asserted on the basis of func-tional considerations. Indeed, in many instances inherent powers are said to be necessary to ensure the fulfilment of the functions of international courts.106 Thus, in the Nuclear Test case, the ICJ stated that ‘[the] Court possesses inher-ent powers . . . in order that its basic judicial functions may be safeguarded’.107

More recently, scholars have distanced themselves from these four theories, finding them inadequate in various ways. Instead, in their view, the widespread application of inherent powers by international courts and tribunals, coupled with the general assent of governments to this practice, has given rise to an ‘autonomous notion of inherent powers’ of international judicial bodies that now constitutes a general principle of international law.108 According to this approach, international tribunals may exercise those powers that are deemed necessary for guaranteeing the fair administration of international justice and for protecting their judicial nature.109

101 Gaeta (n 84) 354.102 See, for instance, Hersch Lauterpacht, ‘Partial Judgements and the Inherent Jurisdiction

of the International Court of Justice’ in Vaughan Lowe and Malgosia Fitzmaurice (eds), Fifty Years of the International Court of Justice: Essays in Honour of Sir Robert Jennings (CUP 1996) 447 ff.

103 See Paparinskis (n 99) 4.104 See Caron and Caplan (n 81) 1111.105 See Paparinskis (n 99) 4 (citing Lauterpacht (n 102) 476–77); Salonidis (n 89) 47. See also

Brown (n 81) 840. Rules on competence-competence, preliminary objections and inter-ventions are examples of inherent powers expressly set out in the ICJ Statute.

106 See Paparinskis (n 99) 5.107 Nuclear Tests (Australia v France) [1974] ICJ Rep 253. See also Legality of Use of Force

(Serbia and Montenegro v United Kingdom) (Preliminary Objections) [2004] ICJ Rep 1307, Separate Opinion of Judge Higgins, 1359. See also Brown (n 84) 228–37.

108 This is the opinion of Gaeta (n 84) 364.109 See ibid 367.

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This last approach would appear to be the soundest of the theories that have been advanced.110 It is consistent with the view that general principles of inter-national law reflect the conscience of the international community and ‘give expression to the idée de droit, and . . . the idée de justice’.111 More than the others, the theory of general principles of international law ‘fully captures the func-tional justification of the concept while offering an entirely plausible legal basis that is not riddled with the shortcomings of other explanations’.112

3.2 Powers of Revision in International AdjudicationAs to the scope and content of these inherent powers, the case law of interna-tional tribunals supports the principle that arbitrators may, under limited cir-cumstances, possess an inherent or implied authority to revise their decision, as long as they are not yet functus officio.113 This has been done across a broad spectrum of arbitral tribunals (e.g., the European Court of Human Rights and the ICTY), on the basis of the inherent jurisdiction of the body – whether articulated in these terms, or justified as being ‘in the interests of justice’ or necessary to safeguard a tribunal’s credibility and integrity.114

The first such decision was rendered by the United States-Mexico Mixed Claims Commission in the Schreck case in 1876, where the arbitrator, Sir Edward Thorton, reconsidered his final decision because it was affected by a ‘manifest error’.115 More recently, in the Delalic et al judgement of the ICTY, Judge Shahabuddeen, in a separate opinion,116 supported the view that the Appeals Chamber must possess ‘the inherent power’ of reconsideration in

110 See Gaeta (n 84) 367; Kenneth S Carlston, The Process of International Arbitration (Columbia UP 1946) 74–5; See also Salonidis (n 89) 47–48.

111 See Salonidis (n 89) 48 (citing Pulp Mills at the River Uruguay (Argentina v Uruguay), Judgment (20 April 2010), Separate Opinion of Judge Cançado Trindade ICJ Reports para 39.

112 See Salonidis, ibid. See also Ian Brownlie, Principles of Public International Law (7th edn, OUP 2008) 19. See also Special Tribunal for Lebanon, Appeals Chamber, Case No CH/AC/2010/02, Decision on Appeal of Pre-Trial Judge’s Order Regarding Jurisdiction and Standing (10 November 2010) para 48.

113 The doctrine of ‘functus officio’, meaning ‘task performed’, is a common law rule routinely applied in ICSID arbitration. It provides that an arbitrator has no power to revisit the merits of the award after it has been issued. See Jay E Grenig, ‘After the Arbitration Award: Not Always Final and Binding’ (2014) 25 Marq Sports L Rev 65, 72–73.

114 Cf John B Moore, International Arbitration, vol II (Washington Gov’t Print Off 1898) 1357.115 See Fulvio M Palombino, ‘Il potere inerente di riesame dei tribunali internazionali: in

margine al caso Celibici’ in La Comunità Internazionale (2004) 707 ff; Benjamin Weil e La Abra Silver Mining Co (30 October 1876) in Moore (n 114) 1324 and 1329–30.

116 Case No IT-96-21-Abis (8 April 2003) para 5.



case the Chamber was persuaded of a clear error of reasoning in its previous judgement, or believed that the decision was given per incuriam and led to an injustice.117 In the Hostages case before the United States-Germany Mixed Claims Commission, the Commission insisted on ‘the duty . . . to reopen and correct a decision’,118 and later, in the Sabotage Cases,119 held that ‘[e]very tri-bunal has inherent power to reopen and to revise a decision induced by fraud’.120

In the same vein, the European Court of Human Rights, in Waltraud Storck v. Germany, declared: ‘in exceptional circumstances, where there has been a manifest error of fact . . . the Court does have, in the interest of justice, the inherent power to re-open a case which had been declared inadmissible and to rectify those errors’.121 The ICTY in the Celibici case ruled similarly,122 as did the Permanent Court of International Justice in the Monastery of Saint-Naoum case.123

Turning to international arbitration, while the UNCITRAL Rules contain no express provision for reconsidering an award,124 the UNCITRAL Model Law on International Commercial Arbitration does provide for very limited recourse against an arbitral award.125 Under Article 34 of the Model Law, a party may request the competent court of the country where the arbitration

117 See Delalic et al, IT-96-21-A (20 February 2001); Prosecutor v Mucic et al, Case No IT-96-21-Abis, Judgement on Sentence Appeal (8 April 2003) para 49. See further Palombino (n 115) 709.

118 For example see Mixed Claims Commission (United States and Germany), VII UNRIAA 1–391 (1 November 1923–30 October 1939).

119 United States v Germany (Sabotage Cases), Decision (15 December 1933) VII UNRIAA 160.120 ibid 190. Thus the US-Iran Claims Tribunal declined to hold that it had such an inherent

power of revision but left open the possibility of making an exception in cases of fraud or perjury, Islamic Republic of Iran v United States of America, Iran-USCTR Case Nos A3, A8, A9, A14 and B61, Decision No DEC 134-A3/A8/A9/A14 and B61, 64 and n 105 (1 July 2011).

121 ECtHR, Waltraud Storck v Germany, Decision on Admissibility (26 October 2004) 13–14.122 International Criminal Tribunal for the former Yugoslavia, Celebici, Judgment

(16 November 1998) CC/PIU/364-E. See Palombino (n 115) 707 ff.123 Monastery of Saint-Naoum, Advisory Opinion (4 September 1924) PCIJ Rep Series B No 9.124 Arbitration Rules of the United Nations Commission on International Trade Law, GA Res

31/98, 31 UNGAOR Supp (No 17) UN Doc A/31/17 (1976) arts 1 and 15. See Antoine Biloune et al and Ghana Investments Centre et al, Award on Damages and Costs (30 June 1990) para 32, reprinted in (1994) XIX Ybk Commercial Arb 11, 22–23.

125 UNCITRAL Model Law on International Commercial Arbitration (1985) ILM 24, 1302.

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took place to set aside an award on any of six narrow grounds,126 but no review of the merits of the award is allowed.127

The UNCITRAL Arbitration Rules Commentary makes clear that the key to addressing this issue lies in the concept of inherent powers.128 One distin-guished panel129 thus held that in an ad hoc UNCITRAL arbitration, a tribunal had an inherent power to take cognizance of credible evidence that its pre-vious determinations were the product of ‘false testimony, forged documents or other fraud on the tribunal’, and that in such a case, a tribunal should not hesitate to take necessary corrective action to reconsider and modify its earlier award.130

Several authors have reached identical conclusions. For example, James Castello, commenting on the UNCITRAL Arbitration Rules, wrote: ‘Even though it is often said that a tribunal is functus officio . . . – in a few cases – tribunals have held that they may revisit such issues when, for example, they believe a change in circumstances or in the factual record renders the initial award untenable’.131

Article 24(2) of the Rules of Conciliation and Arbitration of the International Chamber of Commerce132 specifies the finality of the award: ‘By submitting the dispute to arbitration . . . the parties shall be deemed . . . to have waived their right to any form of appeal’. Nevertheless, Gary Born has noted that ‘a num-ber of arbitral awards have discussed the possibility that the arbitrators have

126 See Art 34(2) of the UNCITRAL Rules. These grounds substantially reproduce those set forth in the Art V(1)(a)–(d) and V(2) of the Convention on the Recognition of Foreign Arbitral Awards, New York (10 June 1958) for refusing recognition and enforcement of an arbitral award.

127 ibid. Arts 37, 38, and 39 of the UNCITRAL Rules invest the Panel with only limited juris-diction to interpret, correct and supplement decision.

128 See Caron and Caplan (n 81) 1111–1126.129 Composed of Judges Stephen Schwebel, Professor Don Wallace, and Monroe Leigh.130 See Sabotage Cases (n 119) 169. See also Caron and Caplan (n 81) 111–1126; see also Mark B

Feldman, ‘The Annulment Proceedings and the Finality of ICSID Arbitral Awards’ (1987) ICSID Rev-FILJ 85, 85–89. See the ‘Report for the Biennal Conference in Washington DC’ April 2014, International Law Association, Committee on International Commercial Arbitration, 12–13.

131 James Castello, ‘UNCITRAL Rules’ in Frank-Bernd Weigand (ed), Practitioner’s Handbook on International Commercial Arbitration (OUP 2010) 1403, 1512, para 16.336. See also Eric Schwartz, ‘Thoughts on the Finality of Arbitral Awards’ in Laurent Lévy and Yves Derains (eds), Liber Amicorum en l’honneur de Serge Lazareff (Pedone 2011) 569–576.

132 Rules of Conciliation and Arbitration of the International Chamber of Commerce (entered into force 1 June 1975) (1976) 1 YB Com Arb 157.



inherent powers, under exceptional circumstances involving, fraud, forgery, or false testimony’ to reopen previous decisions.133

Interestingly, the Iran-United States Claims Tribunal faced many requests for reconsideration. While it never granted any of them, the Tribunal endorsed the idea of the existence of inherent power to reopen in certain extreme cir-cumstances, namely, fraud, forgery or false testimony. In the 1983 Morris case, Chamber One stated: ‘despite the absence of any express provision, [the Full Tribunal or a Chamber], has inherent power to review and revise an award under exceptional circumstances’.134

3.3 Inherent Powers in Investment ArbitrationHaving examined the issue of inherent powers in the context of international adjudication with particular regard to the power of reconsideration, we can move on to considering the same issue specifically in connection with invest-ment arbitration, particularly in the ICSID system.

It is widely accepted that, like other international courts and tribunals, ICSID tribunals ‘possess and regularly assert inherent powers’.135 The existence of such powers is generally considered ‘as uncontroversial’.136 As the Tribunal in Libananco v. Turkey stated: ‘[N]or does the Tribunal doubt for a moment that, like any other international tribunal, it must be regarded as endowed with the inherent powers required to preserve the integrity of its own process’.137 More specifically, all those directly involved in ICSID arbitrations support the existence of broad inherent powers.138 States,139 investors,140 practitioners and

133 Gary Born, International Commercial Arbitration (Kluwer Law International 2009) 2547.134 See Henry Morris and Government of the Islamic Republic of Iran et al, Dec No 26-200-1

(16 September 1983). See also Eastman Kodak Co and Islamic Republic of Iran, Dec No 102-227-3 (30 December 1991); The Islamic Republic of Iran v USA, Dec No 134-A3/A8/A9/A14/B61-FT (1 July 2011).

135 See Salonidis (n 89) 75.136 See Paparinskis (n 99) 8.137 Libananco Holdings Co Limited v Republic of Turkey, ICSID Case No ARB/06/8. See also

Abba Kolo, ‘Witness Intimidation, Tampering and Other Related Abuses of Process in Investment Arbitration: Possible Remedies Available to the Arbitral Tribunal’ (2010) 43 Arbitration Int’l 43, 57–63.

138 See Paparinskis (n 99) 8.139 Anthea Roberts, ‘Power and Persuasion in Investment Treaty Interpretation: The Dual

Role of States’ (2010) 104 AJIL 179.140 Waste Management Inc v United Mexican States (Waste Management II), ICSID Case

No ARB/00/3, Decision on Mexico’s Preliminary Objection Concerning the Previous Proceedings (2 June 2001) para 48; Libananco (n 137) para 78; Enron Corporation and

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even non-parties141 have argued in favour of broad inherent powers of such tribunals. There has been a wide consensus in favour of ‘the appropriateness of inherent powers per se in ICSID arbitration’, although some disagreement in a number of particular instances, about ‘the nature and content’ of such powers persists.142

The exercise of inherent powers by ICSID tribunals finds its legal basis in the language creating the ICSID framework. Article 44 of the ICSID Convention responds precisely to the need for ensuring the proper administration of international justice by arbitrators and for protecting their judicial integrity. According to this article, ‘[i]f any question of procedure arises which is not covered by this Section or the Arbitration Rules or any rules agreed by the par-ties, the Tribunal shall decide the question’. The provision enables ICSID tri-bunals ‘to decide any question of procedure not expressly dealt with in the Convention, the ICSID Arbitration Rules, or any rule agreed by the parties.’143 This power, as explained by the Tribunal in Abaclat et al. v. Argentina, ‘is lim-ited to the filling of gaps left by the ICSID Convention and the Arbitration Rules’.144 Article 44 of the ICSID Convention in this way codifies the ‘inher-ent power of the ICSID tribunals to formulate their own rules of procedure in the event of a lacuna’.145 The explicit language of the ICSID Convention thus seems to identify a priori ‘the appropriateness of the exercise of inherent pow-ers by ICSID tribunals’.146

Ponderosa Assets, LP v Argentine Republic, ICSID Case No ARB/01/3, Decision on Jurisdiction (14 January 2004) para 78.

141 Suez, Sociedad General de Aguas de Barcelona, SA and Vivendi Universal, SA v Argentine Republic, ICSID Case No ARB/03/19, Order in Response to a Petition for Participation as Amicus Curiae (19 May 2005) 15.

142 See Paparinskis (n 99) 20.143 Cf Salonidis (n 89) 51. The provision is widely accepted as unique in the international

arbitration instruments. Former Article 15(1) and current Article 17(1) of the UNCITRAL Rules authorized the arbitral tribunal to ‘fill any remaining gaps ‘in such manner as it considers appropriate’. See also Article 15(1) of the ICC Rules and Article 14(2) of the London Court of International Arbitration (LCIA) Rules and Article 16 of the American Arbitration Association (AAA) International Rules.

144 See Salonidis (n 89) 52; Abaclat and Others v Argentina Republic, ICSID Case No ARB/07/5, Decision on Jurisdiction and Admissibility (4 August 2011) para 522.

145 Cf Salonidis (n 89) 75; Charles Vuylstecke, ‘Foreign Investment Protection and ICSID Arbitration’ (1974) 4 Ga J Int’l & Comp L 343, 351.

146 Salonidis (n 89) 52. ICSID Tribunals have confirmed that, in general terms, ‘[a]lthough the Tribunal . . . does have certain inherent powers with respect to arbitral procedure, it has no authority to exercise such power in opposition to a clear directive in the Arbitration Rules’. Christoph Schreuer and others, The ICSID Convention: A Commentary (2nd edn, CUP 2009) 688; Suez and Vivendi (n 141) 15.



When exercising their powers under Article 44 of the ICSID Convention, arbitral tribunals have often declared that such powers ‘inhere in their judicial function and status’ as international tribunals.147 This was already recognized in 1984, when an ICSID tribunal stated: ‘[E]very court has inherent powers to stay proceedings when justice so requires, and this Tribunal’s discretion to do so is established by Article 44 of the ICSID Convention’.148 More recently, Tribunals have explicitly stated that while ‘inherent power finds a textual foot-hold in Article 44 ICSID Convention’, on other occasions, arbitral tribunals have simply applied Article 44 (n 152)ICSID Convention without making any reference to the doctrine of inherent powers.149 The Tribunal in Abaclat et al. v. Argentina carefully stressed that its power to fill gaps, inferred from the ICSID procedural framework, was limited to the specific proceedings at hand, since an individual tribunal’s role in exerting its powers under Article 44 of the ICSID Convention ‘is not to complete or improve the ICSID framework in general’, but rather to respond to ‘specific problems arising in the proceedings at hand’.150 Yet this recognition of the case-specific nature of inherent powers in no way undermines the recognized principle that courts may invoke such powers when necessary.

In the history of investment arbitration, the key purposes and functions rel-evant to the exercise of inherent powers151 have been conclusively identified. These include protecting the integrity of the proceedings,152 dealing with vexa-tious claimants,153 ensuring the continuity and fairness of the proceedings,154 facilitating the settlement of investment claims,155 promoting fair and efficient

147 See Salonidis (n 89) 52. See Wagult Ellie George Siag & Clorinda Vecchi v Arab Republic of Egypt, ICSID Case No ARB/05/15, Award (1 June 2009) para 366; Hrvatska Elektroprivreda v Republic of Slovenia, ICSID Case No ARB/05/24, Ruling Regarding the Participation of David Mildon in Further Stages of the Proceedings (6 May 2008) para 33.

148 See Paparinskis (n 99) 9; Southern Pacific Properties (Middle East) Limited v Egypt, ICSID Case No ARB/84/3, Decision on Jurisdiction (27 November 1985) para 87.

149 ibid; SGS Société Générale de Surveillance SA v Philippines, ICSID No ARB/02/6, Decision on Jurisdiction (29 January 2004) para 173.

150 ibid; Abaclat (n 144) para 523.151 See Paparinskis (n 99) 10.152 Waste Management (n 140) para 49; Hrvatska (n 147) para 33; Libananco (n 137) para 78.153 ibid.154 Siag (n 147) para 366.155 Suez, Sociedad General de Aguas de Barcelona SA, and InterAguas Servicios Integrales

del Agua SA v The Argentine Republic, ICSID Case No ARB/03/17, Decision on Liability (30 July 2010) para 18; Suez and Vivendi (n 141) para 15.

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dispute resolution,156 and securing the interests of justice157 and the interests of the parties.158 In particular, certain inherent powers, such as the power to determine substantive jurisdiction and the power to order measures of interim protection, have already been codified in the ICSID Convention.159 In addition, indicative surveys provided by several authors assert many ‘un-codified’ inherent powers in investment arbitration practice, such as the power to dismiss a claim on grounds of abuse of process, the power to ensure basic procedural fairness, the power to order judicial remedies and grant binding provisional measures.160

The TANESCO Tribunal was thus on solid ground in concluding that consis-tent with Article 44 of the ICSID Convention, it had the competence to reopen and reconsider a prior decision that had not yet been incorporated into an award.161 The exercise of inherent powers is thus far ‘less controversial’162 in the investment arbitration setting than in other adjudicatory contexts. An inher-ent jurisdiction to reopen such cases is not only conceivable but has often been asserted by international courts and tribunals, especially investment arbitra-tion tribunals. At the same time, there as yet exists ‘no universal or closed cata-logue’ of such inherent powers, nor any fixed rules governing or limiting their invocation.163 One such potential limitation, addressed by the ConocoPhillips Tribunal, stems from the principle of res judicata, to which we now turn.

4 Jurisdiction to Reopen Cases and the Principle of Res Judicata

The inherent jurisdiction to reopen cases in order to exercise a power to recon-sider interim awards is arguably in conflict with the principle of res judicata.

156 Noble Ventures, Inc v Romania, ICSID Case No ARB/01/11, Award (12 October 2005) para 193.

157 Southern Pacific Properties (Middle East) Limited (Hong Kong) and Southern Pacific Properties Limited (Hong Kong) v Egypt, ICSID Case No ARB/84/3, Award (20 May 1992) para 87.

158 Jan de Nul NV and Dredging International NV v Arab Republic of Egypt, ICSID Case No ARB/04/13, Award (6 November 2008) para 261.

159 Article 47 of the ICSID Convention states that ‘the Tribunal may, if it considers that the circumstances so require, recommend any provisional measures which should be taken to preserve the respective rights of either party’.

160 See Salonidis (n 89) 59–70.161 See TANESCO (n 5) paras 319–320.162 Cf Leon Kopecký and Victoria Pernt, ‘A Bid for Strong Arbitrators’ (KluwerArbitration

Blog, 15 April 2015) <http://kluwerarbitrationblog.com/2016/04/15/a-bid-for-strong -arbitrators/> accessed 15 May 2016.

163 See the ‘Report for the Biennial Conference in Washington’ (n 130) 13.

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After examining the boundaries of these principles in the investment arbitra-tion setting, we will suggest a way in which they can be reconciled.

4.1 The Applicability of Res JudicataEven if it can be shown that a Tribunal might otherwise possess a power to reconsider an earlier ruling, it is often objected that any jurisdiction to re-open a case finds its ‘natural limit’ in the principle of res judicata.164 Indeed, in ConocoPhillips, the apparent conflict between the principle of res judicata and the claimed power of revision, was cited by the Tribunal as a reason to reject a request for reconsideration.165

As scholars have stressed,166 international law recognizes and safeguards the principle of res judicata which, in the words of the ICJ, serves two purposes. First, the principle of legal certainty requires that the legal relations estab-lished by a judgment be definitively settled. Second, it is in the winning party’s interest that an issue that has once been adjudicated in that party’s favour not be litigated again (ne bis in idem).167 As noted by Schreuer and Reinisch, the aim of res judicata is the ‘end of litigation’, avoiding double or divergent deci-sions, while at the same time promoting judicial economy by preventing the re-litigation of previously decided cases.168

Yet this principle does not mean that a ‘tribunal may [never] modify a defin-itive judgment’.169 Under certain conditions, this may be achieved through a ‘rectification’, which involves the reconsideration of a judgment by the same court that previously rendered it.170 Although rectification may assume several

164 See Charles N Brower and Paula F Henin, ‘Res Judicata’ in Meg Kinnear and others (eds), Building International Investment Law: The First 50 Years of ICSID (Kluwer Law International 2015) 55–70.

165 See ConocoPhillips (n 3) paras 21–22.166 We refer to Palombino (n 115) 711.167 For the ICJ opinion see Application of the Convention on the Prevention and Punishment of

the Crime of Genocide (Bosnia and Herzegovina v Serbia and Montenegro) [2007] ICJ Rep 43, 51–52. See also Brower and Henin (n 164) 55–70. See also Derek W Bowett, ‘Res Judicata and the Limits of Rectification of Decision by International Tribunals’ (1996) 8 African JICL 577.

168 Cf Hege Elisabeth Kjos, Applicable Law in Investor-State Arbitration: The Interplay Between National and International Law (OUP 2013) 231 (citing the legal opinion of Christoph Schreuer and August Reinisch in CME Czech Republic BV (The Netherlands) v The Czech Republic (UNCITRAL) 201 para 66).

169 See Palombino (n 115) 711 (translated by author from Italian).170 See Palombino (n 115) 711; Bowett (n 167) 577 and Michael Reisman, Nullity and Revision

(Yale UP 1971) 185 ff.

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different forms (correction, interpretation and revision),171 only revision takes on the nature of being a ‘real judicial remedy’ so as to represent a potential ‘inroad’ into the principle of res judicata.172 While appeal intrinsically allows for a general de novo examination of the merits of the case, review or revision has a ‘more limited function’.173 Only particular aspects of the case are subject to review or revision, and while the case may be re-opened and re-examined, a fresh full judgment on the merits is generally not delivered.174

In the history of international dispute settlement, several methods for reconsidering or re-opening a case have emerged,175 but with respect to all of them, the principles of finality of judgment and res judicata have played a key role. One question that initially arose with respect to reconsideration con-cerned the very applicability of the principle of res judicata where there were no ‘clear indications in the constitutive instrument of the tribunal’.176 The best answer here, in the view of many scholars, is that the doctrine of res judicata is generally applicable as a principle of law, even if the constitutive instrument makes no reference to it.177

A second issue with respect to reconsideration has concerned the require-ments for the doctrine of res judicata to be triggered. Judge Anzilotti addressed this question in his dissent in Chorzòw Factory,178 where he explained that when ‘we have the three traditional elements for identification, persona, petitum, causa petendi . . . a further ruling on claims is precluded, where such claims are identical in substance . . . namely [when] (i) the parties are the same; (ii) the substance of the claim is the same; and (iii) the cause of action is the same’.179 The requirements for res judicata as set out by Judge Anzilotti are collectively referred to as the ‘triple identity test’.180

171 For a definition see Palombino (n 115) 712.172 See Chittharanjan F Amerasinghe, Jurisdiction of International Tribunals (Brill Nijhoff

2011) 175.173 ibid.174 ibid.175 Namely proceedings on appeal, for review on fraud and corruption, for rectification, for

interpretation and for annulment, ibid.176 In this sense ibid.177 ibid.178 Factory at Chorzów (Jurisdiction) Judgment (26 July 1927) PCIJ Rep Series A No 9.179 Factory at Chorzów, Interpretation of Judgments Nos. 7 and 8, 1927 PCIJ Rep Series A

No 13, 23 (Dissenting Opinion of Judge Anzilotti) para 1.180 See Pedro J Martinez-Fraga and Harout J Samra, ‘The Role of Precedent in Defining Res

Judicata in Investor–State Arbitration’ (2012) 32 Nw JIL & Bus 435; Luca G Radicati di



Where these requirements have been met, the principle of res judicata con-strains the parties so that they cannot simply disregard a judgment through their subsequent conduct, or seek to re-open the case.181 Indeed, with respect to applications for re-opening cases, the applicability of the principle of res judicata has constantly been recognised as fundamental by arbitral tribunals.182 In 1910, the Tribunal in the Orinoco Steamship Company case183 thus affirmed that the finality-of-the-judgment principle ‘is assuredly in the interest of peace and the development of the institution of International Arbitration’. Similarly, in the Trail Smelter case,184 the Tribunal, faced with a request for revision, stated that ‘the sanctity of res judicata attached to a final decision of an inter-national tribunal is an essential and settled rule of international law’.185

4.2 The Res Judicata Effect of Pre-Final Award RulingsWhile it is clear that the principle of res judicata applies in the ICSID set-ting, a critical question that remains is whether an arbitral tribunal’s exercise of an inherent power of revision would violate that principle where no final award has yet been issued in the case. There is yet no definitive answer to this question.186 The decisions in ConocoPhillips, Perenco and TANESCO all explored the issue, the matter is as yet far from settled.187

We saw that Article 51(1) of the ICSID Convention provides a built-in revi-sion mechanism for an award. However, Article 51 of the ICSID Convention did not cover the Request for Reconsideration in ConocoPhillips since its revi-sion mechanism can only be activated against final arbitral awards, not against an interim or preliminary decision. Thus, it was no accident that Prof. Abi-Saab’s dissent spoke of ‘reconsideration’ rather than ‘revision’, for it is uncertain whether the Decision on Jurisdiction and the Merits in that case was indeed an

Brozolo, ‘Res Judicata in International Arbitral Awards’ (April 2011) <http://ssrn.com/abstract=1842685> accessed 15 June 2016.

181 See Amerasinghe (n 172) 169.182 In this sense ibid 170.183 Cf Orinoco Steamship Company Case (United States v Venezuela) Award (25 October 1910)

XI UNRIAA 227.184 Trail Smelter Arbitration (United States v Canada) Awards (16 April 1938 and 11 March 1941)

LX UNRIAA 1905–1982.185 See William S Dodge, ‘Res Judicata’ in Rüdiger Wolfrum (ed), Max Planck Encyclopedia

of Public International Law (OUP online edition) <http://opil.ouplaw.com/view/10.1093/law:epil/9780199231690/law-9780199231690-e1670> accessed 26 September 2016.

186 According to the ‘Report for the Biennial Conference in Washington’ (n 130) 13.187 ibid.

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award that would trigger Article 51 ICSID Convention. Similarly, the Tribunal in TANESCO spoke of ‘reopening’ rather than ‘revising’ a prior decision.

True, there is ICSID case law authority which supports the proposition that parties cannot re-open prior proceedings even if no final decision has yet been rendered. Thus, the respective ICSID tribunals in Tokios Tokelès v. Ukraine, CMS v. Argentina, and Jan de Nul v. Egypt each suggested that under the general rule of res judicata, a tribunal is precluded from reopening the jurisdictional matters decided therein even though no final award had been made.188

Similarly, the Tribunal in Waste Management Inc. v. United Mexican States, stated: ‘at whatever stage of the case it is decided, a decision on a particular point constitutes a res judicata as between the parties to that decision if it is a necessary part of the eventual determination and is dealt with as such by the tribunal’.189 In the same vein, the Tribunal in Electrabel S.A. v. Republic of Hungary noted:

This Decision is made in regard only to the first phase of these arbitra-tion proceedings, . . . and it is not made in regard to any issue of quantum. Although necessarily described as a ‘Decision’ and not an ‘Award’ under the ICSID Convention and ICSID Arbitration Rules, the several deci-sions and reasons contained in this Decision are intended by the Tribunal to be final and not to be revisited by the Parties or the Tribunal in any later phase of these arbitration proceedings.190

However, it nonetheless seems inappropriate to conclude that a revision would never be proper when it is made prior to the issuance of a final award. First, notwithstanding the quasi-universal ‘acceptance of the doctrine of res judicata’,191 many scholars have emphasized that there is still much disharmony in the way national and international courts and tribunals have approached this question.192

188 Tokios Tokelės v Ukraine, ICSID Case No ARB/02/18, Award (26 July 2007) para 98; CMS Gas Transmission Company v Argentine Republic, ICSID Case No ARB/01/8, Award (12 May 2005) para 126; Jan de Nul (n 158) paras 121–30.

189 Waste Management (n 140), Decision on Mexico’s Preliminary Objection Concerning the Previous Proceeding (26 June 2002) para 45.

190 Electrabel SA v Republic of Hungary, ICSID Case No ARB/07/19, Decision on Jurisdiction, Applicable Law and Liability (30 November 2012) para 10.1.

191 See Martinez-Fraga and Samra (n 180) 423.192 For example, there is in fact much dissonance in practice about the application of the

‘triple identity test’ between civil law and common law. See Martinez-Fraga and Samra (n 180) 419.



Second, when we analyse the specific context of investment treaty arbi-tration, it is important to highlight that the ‘unique’ self-contained system of ICSID has important ‘implications’ for the res judicata effect of ICSID awards.193 Article 54(1) of the ICSID Convention stipulates that ICSID ‘awards’ are them-selves binding as if they were final judgments of domestic courts.194 This pecu-liarity of the ICSID system has raised issues concerning the applicability of res judicata. Indeed, given that an interim decision is not an award, it is still open to debate whether an interim decision on the merits possesses the characteris-tics necessary to make a ruling ‘final and res judicata’.195

There are thus cases which while paying respect to the rule of stare decisis have nonetheless recognized that tribunals in fact retain the power to re-open a case. In Perenco v. Ecuador, for example, the Tribunal noted that Article 51 of the ICSID Convention strongly suggests that once a tribunal has decided an issue, its decision generally becomes res judicata and cannot be revised; how-ever the Tribunal then qualified this by adding: ‘unless [in] a very specific situ-ation which calls out for the tribunal to revisit its prior findings is presented’.196

In Quiborax v. Bolivia, the Tribunal acknowledged the possibility of the existence of a power of reconsideration in stating that ‘[o]nly the allegation of an illegality that was unknown to Bolivia during the jurisdictional phase may justify reopening the matter at the merit stage.’197 In IPTL v. TANESCO, the Tribunal suggested a much more far-reaching basis for revising earlier findings, writing that since ‘the ICSID Arbitration Rules contain no provision which permits or even contemplates “Partial” or “Interim” awards’,198 ‘there is no apparent reason to give any res judicata effect to decisions rendered in the course of a pending arbitration’.199

More recently, in SCB HK v. TANESCO, the Tribunal stated that the fact that a decision was binding on the parties did not mean the same thing as saying that it was res judicata.200 While a decision may be ‘binding’ on the parties

193 ibid.194 ibid.195 TANESCO (n 5) para 311. Instead, a consensus seems to have emerged concerning the

lack of res judicata effect of decisions on provisional or interim measures. See Millicom v Senegal, ICSID Case No ARB/08/20, Decision on the Application for Provisional Measures Submitted by the Claimants on 24 August 2009 (9 December 2009) 38.

196 See Perenco v Ecuador (n 4) para 41; CMS v. Argentina (n 188) para 126.197 Quiborax SA, Non Metallic Minerals SA and Allan Fosk Kaplún v Plurinational State of

Bolivia, ICSID Case No ARB/06/2, Award (16 September 2015) paras 129–130.198 IPTL v TANESCO, ICSID Case No ARB/98/8, Award (12 July 2001) para 32.199 See Brower and Henin (n 164) 67–69.200 TANESCO (n 5) para 312.

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‘within the proceedings’ even before it was incorporated into a final award, it could have res judicata effects on the parties ‘outside the proceedings’ in which it was granted only when it had been incorporated into a final award.201 Until that time, the decision could be reopened and revised by the tribunal that ren-dered it.202

In summary, while there is substantial authority to the effect that parties dissatisfied with the outcome of an ICSID arbitration are limited to the spe-cific remedies provided for by the ICSID Convention and Arbitration Rules and by the narrow confines of Article 51 ICSID Convention, there is case law suggesting that res judicata does not always stand as an absolute bar to the reconsideration of an earlier ruling prior to the entry of a final judgment. Hence, it is possible to discern some strict criteria for the reconsideration of interim awards that respect both the importance of res judicata and the cor-rectness of an award.

While judicial economy may be undermined if interim decisions can later be revisited, this will not always be the case. As the TANESCO tribunal recog-nized ‘[e]fficiency grounds . . . suggest that there may be circumstances where a tribunal should consider reopening a decision that it has made.’203 So the question is how to strike the proper balance between judicial efficiency and fundamental fairness. The most sensible position – and one that still promotes judicial economy – is to recognize a limited power of reconsideration during the period before a final judgment has been rendered. Because it rests on prin-ciples of fundamental fairness, any such reconsideration should require the demonstration of a flaw so grave and serious that fundamental principles of ‘natural justice’ would be violated if the decision could not to be revisited.204 Such an approach is preferable to one that would allow a tribunal to proceed on an unguided case-by-case basis, for that could lead to dramatic and arbi-trary inconsistencies. It is also preferable to an extremist position under which interim decisions would never be entitled to res judicata effect.205

Under the approach advanced here, reconsideration of interim awards should be allowed only where the following three requirements are satisfied:

201 ibid para 313.202 ibid paras 311, 317–318.203 ibid para 320.204 The same standard required for the revision process could be used also for the reconsid-

eration of interim decisions; a weaker standard would undermine judicial economy. See ConocoPhillips (n 3), Respondent’s Request for Reconsideration, Dissenting Opinion of Andreas Bucher, para 35.

205 ibid para 54.



(i) there has been a discovery of new facts or new evidence;(ii) the new facts or evidence was as a practical matter unavailable

to the moving party at the time of the interim decision; this unavail-ability requirement is met if a party exercising due diligence would not likely have found the evidence in question; and

(iii) the new facts or evidence is such that it would likely cause the Tri-bunal to modify a significant part of its prior interim decision in such a way that it would affect the final outcome of the case.

These strict conditions are similar to those set forth in Article 61(1) of the ICJ Statute on which Article 51 if the ICSID Convention was modelled.206 Indeed, Lisa M Bohmer rightly noted that the criteria of Article 61(1) of the ICJ-Statute should be applied by analogy in the ICSID system in determining whether or not to reconsider an interim decision.

Our conclusion is compatible with Article 42(2) of the ICSID Convention and Arbitration Rule 19, which provide that a Tribunal cannot bring in a find-ing of non liquet and refuse a reconsideration request simply by saying that the law is silent on the matter. As the TANESCO tribunal recognized, there is nothing in the ICSID Convention or the Arbitration Rules that bars a tribunal from reviewing one of its interim decisions, where principles of fairness and justice call for such action.207

Employing the criteria proposed here will go a long way towards reconciling the competing interests that come into play. On the one hand, insuring that res judicata cannot be invoked as a ‘categorical bar’ to reconsidering interim awards helps to promote the ICSID system as one that promotes substantial justice. At the same time, the limited grounds for reconsideration will ensure the stability of interim awards against attack by those who may have been less than diligent their first time around, or who seek to revisit issues for purely dilatory reasons.

Under the approach suggested here, how should the three cases analysed in this article have been decided? In Perenco, our first requirement was not met, for the Reconsideration request was not based on any new facts or evi-dence; instead, it was simply an attempt to have the Tribunal revisit its earlier decision. However, the situation was dramatically different in ConocoPhillips. There, our first and second requirements were satisfied: the WikiLeaks cables were unavailable to Respondent at the time of the interim decision, and

206 Schreuer et al (n 146) 878. These conditions are also similar to those applied in TANESCO (n 5) paras 324–349.

207 ibid paras 307–324.

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Respondent’s ignorance of the information did not reflect a lack of due dili-gence on its part. As to the third requirement, the new facts in ConocoPhillips demonstrated that the allegations concerning Respondent’s unwillingness to negotiate fair market value were completely false. Moreover, this new evidence was of such a nature as to decisively affect the majority’s original interim decision. Under these circumstances, to bar revision of the interim award would seem clearly to have been a gross aberration of justice. And finally, in TANESCO, all of our suggested requirements were satisfied. Both the first and second requirements were met: as stated in the award, the facts had been delib-erately withheld by the Respondent and they were all material to the decision taken by the Tribunal. The third requirement was also satisfied. The new facts, as stated by TANESCO tribunal, ‘justified the reopening as the Tribunal, with the knowledge of those facts, might have reached a different decision.208

5 Concluding Remarks

The question as to the role of inherent powers in international investment arbi-tration has gained new importance in light of the current debate over whether these include a power of reconsideration. As we have seen, this question is closely linked to another interesting issue, the ‘finality’ of an award within the ICSID system. These issues have taken on additional significance in light of the increased practice of fragmenting the resolution of arbitration disputes into a number of stages (e.g., jurisdiction, merits, and quantum).

This article has sought to demonstrate that broad inherent powers do exist in ICSID arbitration. It has shown that inherent powers in international dis-pute settlement may be attributed to five different sources, including general principles in foro domestico, customary international law, implied powers, functional analysis, and comparative analysis. In addition, it has shown that these inherent powers may be exercised by ICSID tribunals both because they are international tribunals, and because of Article 44 of the ICSID Convention and related case law.

To support this thesis, three disputes have been analysed in detail, namely the ConocoPhillips, Perenco, and TANESCO cases. In ConocoPhillips, the major-ity and the dissent both focused on whether ICSID tribunals had the power to reconsider earlier decisions. They reached opposite conclusions for a number

208 ibid para 324.



of reasons.209 In the first place, as noted by several practitioners,210 no specific guidance is provided within the ICSID framework as to whether an arbitral tribunal may revise its prior rulings before a final award is rendered. A tribunal facing lack of guidance on a specific matter will seek the answer in relevant underlying general principles of law. In doing so, however, it faces the difficult task of striking the right balance between important but conflicting interests.

There are principles that oppose and principles that support recognition of a power of revision. Efficiency, integrity of proceedings, and the need for legal certainty are the reasons most often cited for concluding that an arbi-tral tribunal should not be able to reconsider its earlier decisions.211 Yet there are countervailing principles that favour such a power – the principle of fair-ness being the most important of them. Ignoring new evidence that would undermine the foundation of an earlier ruling may be considered fundamen-tally unfair.212 As Prof. Abi-Saab wrote in ConocoPhillips: ‘I don’t think that any . . . Tribunal’ that intends to seek the truth and dispense justice ‘can pass over such [glaring] evidence, close its blinkers and proceed’.213

The question as to the legitimacy of a power of revision arose as a product of the increasing practice of fragmenting arbitral proceedings. Fragmentation was introduced for the purpose of expediting proceedings and more swiftly reaching a final decision. To freely allow the reconsideration of interim deci-sions could defeat this judicial economy purpose by delaying the resolution of a dispute, increasing its costs, and adding complexity to the proceedings. An unlimited power to revisit earlier decisions could also pave the way for abuse of process if parties were then tempted wilfully to disrupt the pro-ceedings for opportunistic reasons, thereby undermining the very purpose of fragmentation.

Yet, as ConocoPhillips and Perenco show, and as TANESCO recognized, giv-ing absolute priority to efficiency clearly has serious downsides. The potential unfairness is aggravated by the fact that Article 51(1) ICSID Convention states: ‘Either party may request revision . . ., provided that when the award was ren-dered that fact was unknown to the Tribunal and to the applicant’. In both ConocoPhillips and Perenco, the tribunals and the parties were aware of the new evidence before a final award was rendered, thus eliminating any possibil-ity of relief under Article 51(1) ICSID Convention. Therefore, by rejecting the

209 See Weiniger and Garcia (n 1).210 ibid.211 ibid.212 ibid.213 ConocoPhillips (n 3), Dissenting Opinion of Georges Abi-Saab, para 66.

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requests for reconsideration, the Tribunals left the parties without a remedy.214 A majority of the arbitrators in ConocoPhillips and Perenco viewed such interim decisions as being part of a final award.215 As such, they are therefore entitled to full res judicata effect and cannot be revisited by the parties.

Scholars are divided on the question of whether there should be a power to reconsider interim decisions. Some, like the Tribunal in TANESCO, have noted serious problems with the ConocoPhillips and Perenco reasoning. One profes-sor has suggested that the question is one of finality, rather than of review.216 As pointed out by Prof. Abi-Saab, the ICSID Arbitration Rules do not contem-plate ‘interim’ or ‘partial awards’.217 Hence, as the finality of an arbitral award is the necessary condition for requesting a revision under Article 51 of the ICSID Convention, the proper question is whether the decisions in ConocoPhillips, Perenco and TANESCO should be considered ‘final awards’.218

The answers here differ. Some scholars and arbitrators, taking an ana-lytical approach,219 look only to the ICSID framework and, in particular, to Article 48(3) of the Convention which states: ‘The award shall deal with every question submitted to the Tribunal, and shall state the reasons upon which it is based’.220 Under this reasoning, since the initial decisions in ConocoPhillips and Perenco did not address the quantum issue, they cannot be viewed as final awards, thus leaving them open for reconsideration.

214 See Weiniger and Garcia (n 1).215 This is the opinion of the arbitrators involved in ConocoPhillips and Perenco, more specifi-

cally Kenneth Keith, Yves Fortier, Peter Tomka, Neil Kaplan and Christopher Thomas.216 Paolo Vargiu, ‘Habemus Dictum? Er, Not Really: Finality vs Discovery of New Evidence

in ICSID Arbitration’ (Investment Blawg, 29 April 2014) <www.investmentblawg.com/habemus-dictum-er-not-really-finality-vs> accessed 20 November 2015.

217 ConocoPhillips (n 3), Dissenting Opinion of Georges Abi-Saab, para 47. Other arbitral insti-tutions do provide for interim or partial awards: the ICC Rules on Arbitration (1 January 2012) make no specific reference about interim awards, however Article 2 (‘Definitions’) states that an ‘award’ includes, inter alia, an interim, partial or final award. The Stockholm Chamber of Commerce (SCC) Rules (1 January 2010), art 38 (‘Separate award’) states: ‘The Arbitral Tribunal may decide a separate issue or part of the dispute in a separate award’. The International Centre for Dispute Resolution (ICDR) Resolution Procedures (1 June 2014) art 29 (‘Awards, Orders, Decisions and Rulings’) states: ‘In addition to making a final award, the arbitral tribunal may make interim, interlocutory, or partial awards, orders, decisions and rulings’. The UNCITRAL Arbitration Rules (1976), in Art 34 state: ‘The arbi-tral tribunal may make separate awards on different issues at different times’. In this sense Hodgson (n 1) 120.

218 ibid.219 Vargiu (n 216).220 See Article 48(3) of the ICSID Convention.

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Other scholars and tribunals have noted a flaw in the majority’s reasoning in ConocoPhillips.221 The majority’s statement that ‘those [interim] decisions in accordance with practice are to be incorporated in the Award’222 implies that, since they have to be ‘incorporated’ into the final award, they were not initially part of it and they could not have res judicata effect. The same flaw was also recently noted by the TANESCO tribunal, which explained that ‘if [interim] decisions were res judicata before incorporation in the final award, then the requirement of incorporation into the final award under Article 48(3) would be redundant’.223 Scholars have also noted that the ConocoPhillips majority did not rely upon any provision of law to support its position. While the majority did cite the decision in Electrabel S.A. v. Hungary, that case failed to cite any precedent or norm of law, and instead – like ConocoPhillips – merely expressed the Tribunal’s opinion.224 The lack of any firm consensus among ICSID tri-bunals as to the correctness of the majority’s decision in ConocoPhillips is also suggested by the decision in Perenco itself, which, rather than absolutely endorsing ConocoPhillips, stated: ‘the Tribunal has little difficulty in expressing its general agreement with the approach taken by the majority’.225

Although arbitral tribunals are divided on the question of whether they possess inherent power to revise prior decisions, it appears to be uncontested among scholars that ‘the discovery of a new fact does activate an inherent juris-diction to review in appropriate situations’.226 Indeed, in the history of adjudica-tion there is a wide consensus that res judicata should not be controlling when a decision is vitiated by a fundamental flaw, such as being tainted by corruption or fraud, or when it resulted from a procedure that was inconsistent with fun-damental due process principles, or when it was rendered by a tribunal lacking jurisdiction.227 Hence, the mere fact that a judgment is said to be ‘final’ or ‘with-out appeal’ does not thereby take away from a tribunal its inherent jurisdiction to review.228 However, the circumstances under which a previous judgment can be re-examined are best regarded as exceptional and require good reason. Any other approach could undermine the principle of res judicata.

221 Vargiu (n 216); Bohmer (n 1) 236–245; ConocoPhillips (n 3), Respondent’s Request for Reconsideration, Dissenting Opinion of Andreas Bucher, paras 1–80.

222 Ibid Bucher para 39.223 TANESCO (n 5) para 314.224 See ConocoPhillips (n 3), Respondent’s Request for Reconsideration, Dissenting Opinion

of Andreas Bucher, paras 39–41.225 Perenco (n 4) para 81 (emphasis added).226 See Amerasinghe (n 172) 180.227 Brower and Henin (n 164) 69.228 See also John L Simpson and Hazel Fox, International Arbitration (Praeger 1959) 258.

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There is no simple answer to the question of when jurisdiction to reconsider should be exercised. On the one hand, it is often said that ‘justice delayed is justice denied’. On the other, the ultimate aim of any dispute settlement sys-tem is the fair resolution of a dispute.229 The leitmotif is the continuing tension between certainty and justice, predictability and flexibility, form and sub-stance. This tension is inherent to the exercise of the judicial function where the proper balance is usually struck on a fact-specific, case-by-case basis, while striving to achieve consistent case law on the matter.230 A judicial sys-tem should be ‘realistic and authentic’, yet it must also strive to meet ‘the ever changing needs of the community’.231

These competing aims are best reconciled through an approach that pro-motes practical reasoning. On the one hand, the legitimacy of the ICSID system derives from and depends upon the efficiency and predictability of its arbitral proceedings. Granting requests for reconsideration too liberally could seriously endanger this legitimacy, since the principle of inherent power could easily be abused. Yet it also cannot be forgotten that an arbitral system’s strength and legitimacy stem in large part from the correctness of its awards. The system’s legitimacy could therefore be severely undermined if a tribunal could render awards that are knowingly based on erroneous fac-tual premises. Such decisions will weaken respect for and discourage the use of the arbitral process.

In the view of Lisa M. Bohmer, who has written extensively in the area, while an arbitral tribunal should have the power to review interim decisions where no final award has yet been rendered, it should be able to exercise that power only under ‘limited circumstances’.232 The author agrees with this posi-tion and with Bohmer’s view of applying the limited grounds for revision con-tained in Article 61 of the ICJ Statute or inferring such criteria from Article 51 ICSID Convention.233

If ICSID tribunals were to adopt such a principle, the question remains as to what circumstances should qualify as ‘exceptional’ so as to allow pre-final judgment proceedings to be re-opened. Neither Venezuela nor Ecuador was able to persuade the tribunals that such a standard was satisfied in their cases,

229 See Weiniger and Garcia (n 1).230 The tension between fairness and certainty is a ubiquitous topic in doctrine. See,

for example, Edward W Thomas, The Judicial Process: Realism, Pragmatism, Practical Reasoning and Principles (CUP 2005) 121, 247.

231 See ibid 121.232 See Bohmer (n 1) 243.233 ibid.



nor did the tribunals in those cases provide any guidance in the matter. The present author has suggested a three-step approach for determining when reconsideration may occur. Employing strict criteria that must be met before a tribunal may reconsider an interim decision promotes justice while at the same time discouraging dilatory practices and the abuse of inherent powers. The approach advocated here is far superior to the alternatives of either giv-ing tribunals totally unfettered discretion in such cases, or denying a power of reconsideration in all cases regardless of the inequity and injustice that might result.

The 2016 TANESCO ruling is very encouraging in terms of the position supported in this article. While Respondent TANESCO has vowed to seek an annulment of the decision, the ruling is an important one. The TANESCO tribunal, for the first time in ICSID history, reconsidered a previous decision after finding that by failing to disclose certain facts, Respondent deliber-ately misled the Tribunal,234 and that ‘the facts . . . Respondent failed to dis-close . . . were material and would have had an impact on [the Tribunal’s] decision’.235 In the Tribunal’s view, to read ConocoPhillips as ‘stating that all decisions of ICSID tribunals are res judicata . . . is, at the very least, too broad’.236 Because ‘there is nothing in the ICSID Convention that prohibits the reopening of decisions, the starting point is the general power of the Tribunal under Article 41(1) of the Convention to determine its own competence.’237 As to competence, the Tribunal then concluded that it possesses ‘the power to reopen in certain limited circumstances,’238 circumstances that warranted exercise of that power in the case before it.239

It is difficult to foresee how the reconsideration issue will eventually play out.240 Even though the ICSID Convention does not currently provide for an express power to review interlocutory decisions prior to the entry of a final judgment, this does not mean a contrario that no such power exists, for no provision of the ICSID Convention or the ICSID Arbitration Rules prohibits

234 TANESCO (n 5) para 333.235 ibid para 347.236 ibid para 311.237 ibid para 319.238 ibid para 320.239 ibid paras 325–349.240 Indeed, in the recent November 2016 decision in Niko (n 8) paras 14 and 38(i), the Tribunal

expressly left the issue open, ‘reserving’ its position ‘on the question whether applications for reconsideration of decisions are admissible in ICSID proceedings’.

Cantelmo270


a tribunal from reviewing prior interim decisions as a matter of principle.241 The TANESCO tribunal concluded that such a power does in fact exist, and the focus on ‘the right of a tribunal to determine its own competence’ seems to recall exactly the concept of inherent power.242 Until there is further clarifica-tion from ICSID tribunals on this matter, we can agree with those scholars, who, like Professor Abi-Saab, have argued that such a power of reconsideration may be established and exercised under the inherent power or jurisdiction.243

241 Still, there is no provision that would bar such power from being exercised. Faced with a prima facie serious allegation of fundamental violation of justice, no tribunal should affirm that it is left with ‘no power’ to deal with the matter. See ConocoPhillips (n 3), Respondent’s Request for Reconsideration, Dissenting Opinion of Andreas Bucher, paras 75–79; see also Brower and Henin (n 164) 68–69.

242 TANESCO (n 5) para 320.243 Professor Abi-Saab’s views and his ‘call for justice’ were shared in ConocoPhillips (n 3),

Respondent’s Request for Reconsideration, Dissenting Opinion of Andreas Bucher, para 80. See also Bohmer (n 1) 244–245; Hodgson (n 1) 121. Brower and Henin (n 164) 55–69 (noting that Professor Abi-Saab’s views ‘rightly points out that the majority’s Decision on Reconsideration underplays the specific characteristics of the ICSID system and its lex specialis’).

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The Inherent Power of Reconsideration in Recent ICSID Case … · The Inherent Power of Reconsideration in Recent ... Power of Reconsideration IN RECENT ICSID CASE LAW 233 ... ‘ConocoPhillips