Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized ICSID Twelfth Annual Report 1977/1978 Contents Page Letter of Transmittal . 2 Highlights of the Year . 3 The Proposed Additional Facility. 3 Signatures and Ratifications . 3 The Panels. 4 Implementation of Article 54(2) of the Convention . 4 Advance Acceptance of the Jurisdiction of the Centre. 4 Eleventh Annual Meeting of the Administrative Council. 5 Disputes Submitted to the Centre............................................... 5 Finance ..... 6 Publications . 6 Annexes 1. List of Contracting States and Other Signatories of the Convention . 8 2. Members of the Administrative Council and Officials of the Centre . 10 3. List of the Members of the Panels of Conciliators and Arbitrators. 11 4. Provisions Relating to ICSID in International Agreements and National Investment Laws. '' ''' ''.'".' '' ''' '.'' ' .. "."".''' ' .. " 22 5. Resolutions of the Administrative Counci! .............................. 32 6. Financial Statement... .............................. 33 7. Publications of ICSID. ...................................... 34 8. Legal Bibliography Relating to the Centre ................................... 35 '" ~ ( ') ' ]'. 0 International Centre for Settlement of Investment Disputes August 28, 1978 Dear Mr. Chairman: Pursuant to Administrative and Financial Regulation 4(4), I hereby submit to the Administrative Council for its approval the Annual Report on the operation of the International Centre for Settlement of Investment Disputes required by Article 6( 1)(g) of the Convention on the Settlement of Investment Disputes between States and Nationals of Other States. This Twelfth Annual Report covers the fiscal year July 1, 1977 to June 30, 1978. The report includes the audited financial statement of the Centre, presented pursuant to Administrative and Financial Regulat1on 18. Sincerely yours, A. Broches Secretary-General Mr. Robert S. McNamara President Administrative Council International Centre for Settlement of Investment Disputes 2 Highlights of the Year the form of rules and an administering authority, During the year under review: and that the Centre's Secretariat, which deals -the number of Contracting States increased exclusively with proceedings between such from 67 to 71; parties. could perform a useful service in this -the number of Signatory States increased regard. It was, of course, clearly understood that from 72 to 77; such proceedings would not be governed by -three new requests for arbitration were the Convention but would be based solely on registered, one pending arbitration proceed­ contract. ing was terminated by a unanimous award Governmental comments received prior to and two others discontinued after the parties the Eleventh Annual Meeting and the dis­ had reached an amicable settlement; cussions at that meeting showed substantial -several new bilateral treaties were concluded support in principle for the creation of the Addi­ between capital exporting and capital im­ tional Facility. The Administrative Council porting States providing for recourse to the adopted a resolution requesting the Secretary­ facilities of the Centre; General to prepare a detailed proposal for the -work on the proposed Additional Facility for Additional Facility for submission to the Council the administration by the Secretariat of cer­ at its Twelfth Annual Meeting and, in order to tain proceedings which are not within the ju­ secure wide acceptance of the proposal, to cir­ risdictional limits of the Convention, culate during the year drafts to the members of progressed to the point where detailed pro­ the Council for the comments of their govern­ posals will be submitted to the Administra­ ments. tive Council at its Twelfth Annual Meeting. In preparation for the discussions at the Twelfth Annual Meeting, the Secretariat circu­ The Proposed Additional Facility lated drafts of "Additional Facility Rules", defin­ At its Eleventh Annual Meeting, the Adminis­ ing the scope within which the Secretariat trative Council considered a proposal envisag­ would be authorized to act as administering au­ ing institutional arrangements for the adminis­ thority in respect of proceedings not governed tration by the Centre's Secretariat, at the re­ by the Convention, and accompanying financial quest of interested parties, of certain types of and administrative regulations and rules of pro­ conciliation and arbitration proceedings which cedure for conciliation. arbitration and fact­ do not meet the jurisdictional requirements of finding. In drafting the Additional Facility Rules the Convention, and of proceedings limited to the Secretariat has sought to define the scope pure fact-finding. Such arrangements were first of the Additional Facility in such a manner as to suggested by the Secretary-General at the avoid, on the one hand, recourse to the Addi­ Tenth Annual Meeting of the Council and a ten­ tional Facility in cases which fall within the tative proposal had been prepared by the Sec­ competence of the Centre under Article 25 of retariat and circulated for comments of govern­ the Convention and, on the other, mere duplica­ ments in the spring of 1977. tion of facilities for dispute settlement. The proposal for the creation of such institu­ tional arrangements (referred to as the "Addi­ Signatures and Ratifications tional Facility") was based on the belief that During the year the Convention was signed proceedings between governments and non­ by Fiji (July 1, 1977). Western Samoa (February governmental entities would be facilitated by 3, 1978), Kuwait (February 9, 1978), Seychelles the existence of institutional arrangements in (February 15, 1978), and Rwanda (April 21, 3 1978}, bringing the number of signatories to 77. upon to exercise the important and delicate Instruments of ratification were deposited by function of naming conciliators and arbitrators. Fiji (August 11, 1977), Mali (January 3. 1978}, Pursuant to Article 13(2) of the Convention the Seychelles (March 20, 1978), and Western Chairman himself may appoint up to 10 per­ Samoa (April25, 1978}. At June 30, 1978, there sons each to the Panel of Conciliators and the were 71 Contracting States. A list of Contract­ Panel of Arbitrators. The Cha1rman has not exer­ ing States and other signatories of the Conven­ cised this right, except once, in order to reserve tion appears in Annex 11 the possibility of supplementing the Panels to meet the requirements of a particular proceed­ The Panels2 ing. This is, however, neither an adequate nor a Pursuant to Article 13( 1) of the Convention, satisfactory remedy and Contracting States are Contracting Stales may designate up to four urged to lend their full cooperation m order to persons each to the Panel of Conciliators and enable the Panels to fulfill their intended func­ the Panel of Arbitrators. Litigants may, but are tion. not required to, appoint conciliators and arbitra­ tors from the Panels. The Chairman of the Ad­ Implementation of Article 54(2) of the ministrative Council, when called upon to ap­ Convention point conciliators and arbitrators, is restricted in Pursuant to Arttcle 54(2) o! the Convention his choice to the persons designated to the each Contracting State is required to notify the Panels. Secretary-General of the designation of the In order to offer litigants the widest possible competent court or other authority to which re­ choice it is desirable, and in order to enable the quests for the recognition and enforcement of Chairman of the Administrative Council to dis­ arbitral awards are to be addressed. Since the charge his responsibilities in a satisfactory provisions concernmg the recognition and en­ manner it is essential, that Contracting States forcement of arbitral awards rendered pursuant exercise their right to designate Panel mem­ to the Convention are among the key provisiOns bers and pay particular attention to the impor­ of that instrument, States which have not yet tance of selecting persons who not only meet done so are urged to make the appropriate des­ the highest personal and professional stan­ Ignation and notify the Centre thereof as soon dards but are also able and willing to serve on as possible. 51 States had made such designa­ Commissions and Tribunals when invited to do tions by June 30, 1978.' so. In designating persons to the Panel of Arbi­ trators, Contracting States should also keep in Advance Acceptance of the Jurisdiction of mind that because of provisions of the Conven­ the Centre tion regarding nationality of arbitrators, persons As more investors are becoming familiar with designated by a State would normally only be the Convention, ICSID compromissory clauses 1nvited to serve in proceedings to wh1ch ne1ther are being increasingly used in agreements be­ that State nor one of its nationals is a party. tween investors and host countries. References Experience to date has not been altogether to the Centre are also becommg more frequent satisfactory_ Less than! two-thirds of the Con­ in national legislation and in bilateral invest­ tracting States have exercised their right of ment treaties between capital exporting and designation, and several Contracting States capital importing States. Annex 4 lists invest­ have failed to keep their designations current. ment laws of host countries and bilateral In a few cases Panel members have not ac­ treaties that provide for the acceptance of the cepted invitations to serve, and the official jurisdiction of the Centre. functions