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RSM Production Corporation v. Grenada, ICSID Case No. ARB/05/14

In RSM v Grenada the claimant  applied to the Annulment Committee for it to make a finding of fact after the original arbitral tribunal was functus officio. RSM relied on the inherent jurisdiction of the Annulment Committee to support the application.

RSM applied to the Annulment Committee for a finding that a key witness in the arbitral hearing (a cabinet minister in Grenada’s government) was bribed to ensure that the oil and gas exploration contract won by RSM would not be successfully performed. 

This is despite RSM confirming to the original arbitral tribunal that it was not required to make any finding of corrupt conduct by the witness and the arbitral tribunal expressly stating that it was not making any such finding. RSM alleged that facts discovered since the making of the award two years ago justified its change in stance.

Unsurprisingly, the Annulment Committee declined to grant the application because such an application was outwith the jurisdiction of the Annulment Committee.

It stated the conventional view that the ICSID Convention provided a self-contained arbitration system including a challenge system. This system (in the words of Article 53) provides that an ICSID award “shall not be subject to any appeal or to any other remedy except those provided in the convention. The ICSID Convention and the Arbitration rules provided powers to the original tribunal to deal with the proceedings in the post-award phase including the discovery of new evidence. They were the correct venue for this kind of application, not the Annulment Committee.

The decision is interesting because of the clear markers that were laid down by the Annulment Committee. While they could have disposed with the application on the Article 53 point they did discuss their inherent jurisdiction in some detail.

They confirmed that they have an inherent jurisdiction, as do all international tribunals (thereby promoting the annulment committee as the equivalent of a permanent international court or tribunal) and they could exercise such powers as necessary to perform their expressly conferred function. Such powers could not contradict the express language of the ICSID Convention. Article 52 (which empowers the annulment procedure) and in this case, the narrow jurisdiction of an annulment committee meant that a party could not be permitted to present new facts or arguments to it.

The question that immediately comes to mind is – why? What use is there in claiming that an Annulment Committee has an inherent jurisdiction (outside of control of its own procedure) if that inherent jurisdiction is strictly limited by the four grounds for annulment in Article 52 of the ICSID Convention? These grounds are all entirely procedural, and are all focused on the conduct of the proceedings as they were presented to the tribunal, the nature and composition of the tribunal and the adequacy of their reasoning. There is literally nothing to which this quasi-inherent jurisdiction could apply.

Considering that all the previous tribunals and courts held to have an inherent jurisdiction are permanently established, it appears that there is doubt both in law and policy for extending the idea of an inherent jurisdiction to an ad hoc Annulment Committee.

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