I.  ICC ARBITRATION AT A GLANCE

  In its 75 years of existence the ICC International Court of Arbitration has handled more than 10,000 cases, with the aggregate amount in dispute of all pending cases now being over 30 billion US Dollars.

  The ICC Rules of Arbitration have proven to be sufficiently flexible to allow parties successfully to arbitrate disputes using a diversity of substantive and procedural laws. At the present time, the ICC has about 1,000 cases pending in approximately 35 different countries, involving arbitrators of 62 different nationalities and parties from more than 100 nations.

  The ICC Rules of Arbitration afford arbitral tribunals the flexibility to organise and conduct arbitrations efficiently. Under the ICC Rules, it is possible to conduct arbitrations either in an essentially adversial mode, or along more inquisitorial lines. As the main emphasis of the ICC Rules is to respect the universally recognised principles of due process, one procedural approach is not favoured over the other.

  Coupled with this flexibility in the conduct of arbitrations is an institutional framework allowing supervision over both the initial stages of the arbitration when the tribunal is constituted and the Terms of Reference are set up, and the later stages, when the Court scrutinises partial and final awards by the arbitrators under Article 27 of the Rules. The Court is composed of more than 70 members from some 60 different countries.

1.   Types of Disputes

  The types of issues that would fall under the arbitration provisions of the Agreement are likely to be very broadly defined and to include alleged treaty breaches, the issuance of investment authorisations, obligations arising under other treaties, investments and the treatment of foreign investors, and obligations arising out of specific investment agreements. These are all issues which the ICC Court can handle or has handled. More specifically, no arbitration institution has more experience than the ICC Court in the arbitration of the international contractual obligations and international commercial law issues that are typical of investment agreements or of foreign investment as broadly defined in the investment protection treaties.

2.   The Nature of Arbitration under the MAI

  ICC arbitration was designed to be as flexible as possible and to accommodate the arbitration of a wide range of issues in a great variety of settings. There are no inherent incompatibilities between the ICC Rules and the arbitration of investment disputes with states. This is well demonstrated by ICC's record with arbitrations involving states.

II.  PAST ICC EXPERIENCE WITH ARBITRATION INVOLVING STATES

1.   Generally

  Over the last five years, the percentages of ICC arbitration cases that involved states or state entities as parties were as follows:

—  1997:  8.0 per cent

—  1996:  5.4 per cent

—  1995:  14.1 per cent

—  1994:  12.0 per cent

—  1993:  11.9 per cent

—  1992:  4.8 per cent

  The ICC Court received a total of 2,385 new requests over that period.

2.   Investment Disputes

  While not all cases involving a state party concern investment agreements, the ICC has frequently been chosen as a forum to resolve disputes relating to investment agreements. These included investor-to-state disputes over the construction and management of hotel compounds, oil concessions, the manufacture of military equipment, the provision of mining services, loan agreements between private banking institutions and state agencies, the construction of pipelines, dams, factories, harbours etc. In one case a claim was brought by a private party against a supra-national organisation on the basis of a treaty (the Lome« Convention known as Lome« III) which the member states of the organisation had entered into with the EEC; the treaty provided for ICC arbitration in connection with development projects financed by the European Development Fund. Another case was brought under a bilateral investment treaty between Cuba and Spain which provided for ICC arbitration in case of investor-to-state dispute.

III.  THE NEED FOR AN ADDITIONAL FORUM TO ARBITRATE INVESTOR-STATE DISPUTES

  It should be emphasised that if the investor chooses to arbitrate under the UNCITRAL Rules, it may forego the benefits of institutional supervision, while gaining the advantage of arbitrating under a set of Rules designed to serve the international business community and which makes no distinction between the parties. While the UNCITRAL Rules may provide an efficient and useful framework for the conduct of the arbitration in the hands of experienced parties and arbitrators, working together to achieve a successful resolution of a dispute, the presence of a supervising body may be sorely missed if the parties do not cooperate or the tribunal lacks the experience to successfully conduct the arbitration. ICC arbitration combines the benefits of institutional supervision with a set of commercial arbitration rules.

  Indeed, institutional supervision may be especially helpful at the very beginning of an arbitration when the arbitral tribunal must be put together. Here the ICC's system of recruiting arbitrators may be of particular interest. The ICC International Court of Arbitration does not maintain a list of accredited arbitrators. When it is called upon to appoint an arbitrator, the Court detemines of what nationality the arbitrator must be and then calls upon one of about 60 national committees of the ICC to make a proposal. This system ensures the widest possible access to the most qualified persons of the most diverse national backgrounds to act as arbitrators in ICC cases, which is apparent in the fact that this year the ICC appointed arbitrators from 62 different countries.