Ministry of Economy: ICSID arbitration tribunal’s decision is binding

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The decision of the ICSID arbitration tribunal based in Paris is binding immediately after its adoption and an appeal against it cannot be submitted, the Ministry of Economy stated.

Investment arbitration proceedings between CEAC Holdings Limited and Montenegro ended on 26 July, after the acting arbitration tribunal declined jurisdiction to decide on this dispute. The arbitration tribunal also decided that costs of the arbitration proceedings and legal representation amounting to €900,000 should entirely be borne by CEAC. CEAC is also obliged to compensate the costs Montenegro has already had within these proceedings.

CEAC has announced that it will require the annulment of this decision.

According to the Ministry of Economy, emergency funds laid down in the ICSID Convention and the Arbitration Rules are the only mechanism that can be used.

However, all these mechanisms can be run under extremely restrictive conditions. Generally, the requirements for setting ICSID arbitration decisions have been unsuccessful in most of the cases so far. For example, statistics show that in the period from 2011 until now, only two out of 35 decisions have been cancelled after annulment request had been submitted against them.

Reasons that may lead to annulment include only the most serious procedural shortcomings. More specifically, the reason for the annulment can only be an improper composition of the tribunal obvious exceeded the powers by the arbitrators, the tribunal corruption, violation of basic procedural rules or lack of reasoning for the decision, the ministry explained adding that it would be extremely difficult for CEAC to prove the existence of any such serious flaws, especially bearing in mind the expertise, qualifications and experience of the arbitrators who made decisions in the process.

Source: Cafe Del Montenegro