Pacific Wildcat Resources Corp (PWCRF)

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The Origin of the Annulment Provision
7. The grounds for annulment in the ICSID Convention derive from the 1953 United Nations
International Law Commission Draft Convention on Arbitral Procedure (“ILC Draft”),
which was an effort to codify existing international law on arbitral procedure in State-toState arbitration.
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The ILC recognized that the finality of an award is an essential feature
5
For a summary of steps in drafting the Convention, see ICSID, History of the ICSID Convention: Documents
Concerning the Origin and the Formulation of the Convention on the Settlement of Investment Disputes between States
and Nationals of Other States Vol. I-IV (1970) (“History”), Vol. I, 2-10.
6
See Documents of the Fifth Session Including the Report of the Commission to the General Assembly, [1953] 2
Yearbook of the International Law Commission 211, U.N. Doc. A/CN.4/SER.A/1953/Add.1 (“1953 ILC
Yearbook II”) (Article 30 of the Draft Convention on Arbitral Procedure); Aron Broches, “Observations on the
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of arbitral practice, but also recognized that there was a need for “exceptional remedies
calculated to uphold the judicial character of the award as well as the will of the parties as
a source of the jurisdiction of the tribunal.”
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It thus “sought to reconcile finality of the
award with the need to prevent flagrant cases of excess of jurisdiction and injustice.”
8
During its deliberations, the ILC decided that no appeal against an arbitral award should
be allowed, but that the validity of an award might be challenged “within rigidly fixed
limits.”
9
An independent body, the International Court of Justice, would rule on whether a
challenge should lead to the annulment of the award.
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8. The provision in the ILC Draft read as follows:
(1) The validity of an award may be challenged by either party on one or more of
the following grounds:
(a) That the tribunal has exceeded its powers;
(b) That there was corruption on the part of a member of the tribunal;
(c) That there has been a serious departure from a fundamental rule of
procedure, including failure to state the reasons for the award.
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9. During its deliberations, the ILC debated the scope of specific grounds, including whether
an excess of jurisdiction might warrant annulment, while misapplication of the law would
not.
12
Ultimately, the ILC Draft made no attempt to define what conduct each ground
would cover, with the exception of the express reference to the “failure to state the reasons
for the award” as an example of a serious departure from a fundamental rule of procedure.
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