Is Emergency Arbitration ICSID’s Achilles Heel?

Kenya is a Contracting State to the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (1965) which came into force in Kenya on 2 February 1967 (the ICSID Convention). This status enables foreign investors to initiate dispute resolution proceedings against the Government of Kenya before the International Centre for Settlement of Investment Disputes (ICSID), a specialised institution of the World Bank that administers arbitration and conciliation of investor-state disputes.

ICSID has long held a premier status in investor-state arbitration, lauded for its neutrality, delocalisation, and enforceability across 154 contracting member states. Its core strengths, expertise, reliability, and insulation from domestic Court interference, have cemented ICSID as a key forum for handling investor-state disputes.

Yet, this robust investor-state dispute resolution institution has a glaring vulnerability: the absence of an emergency arbitration mechanism.

Emergency arbitration, offered by institutions such as the International Chamber of Commerce (ICC), Singapore International Arbitration Centre (SIAC), and the Arbitration Institute of the Stockholm Chamber of Commerce (SCC), allows Parties to obtain urgent interim relief before a Tribunal is constituted, sometimes within days. This remedy is vital in preventing irreparable harm during the early stages of a dispute.

ICSID, however, declined to adopt emergency arbitration in its 2022 Rules Reform, opting instead for provisional measures available only once a Tribunal is formed. This leaves a glaring gap in the handling of high-stakes disputes noting that:

  1. The average Tribunal formation time at ICSID is 211 days with an upper range of up to 470 days.
  2. During this window, states may take irreversible steps such as asset seizures or retaliatory regulatory actions, leaving investors exposed and without access to any interim reliefs.

ICSID’s fallback is the national Courts which is the very forum investors may have sought to avoid based on concerns over:

  1. Bias, confidentiality breaches, and political interference.
  2. An inability or unwillingness of national Courts to act efficiently, swiftly, fairly and impartially.

ICSID’s preference for procedural rigor may suit complex disputes which likely take time to resolve, but its rigidity is increasingly at odds with an alternative dispute resolution landscape that prioritises agility and responsiveness. The reluctance to embrace emergency arbitration appears rooted in sovereignty concerns considering that pre-Tribunal Orders by emergency arbitrators may be seen as overly intrusive by host states wary of external interference.

Nonetheless, other arbitral institutions such as the ICC, SIAC and the SCC have successfully implemented emergency arbitration without undermining jurisdictional boundaries.

A compelling example is the UK case of SL Mining v. Sierra Leone [2021] EWHC 286 (Comm). In this investor-state dispute, SL Mining Limited, a UK based company, invoked the emergency arbitration provisions under the ICC Rules to counter Sierra Leone’s cancellation of its iron ore license. The emergency arbitrator issued interim relief prior to the Tribunal’s constitution. Despite Sierra Leone’s jurisdictional objections, the English High Court validated both the Tribunal’s jurisdiction and the binding nature of the emergency proceedings.

Any amendment to the ICSID Convention to allow for emergency arbitrators, would require unanimous member-state consent which is a politically daunting task. Yet, failure to act risks rendering ICSID obsolete noting that:

  1. As emergency arbitration becomes standard, ICSID’s rigid stance may drive investors toward more adaptive alternative dispute resolution forums.
  2. The lack of an emergency mechanism undermines both investor protection and institutional competitiveness.

ICSID’s current approach embodies a measured commitment to procedural integrity and respect for state consent. Yet, in a global arbitration arena where interim relief has become an indispensable safeguard rather than a mere convenience, the absence of emergency arbitration risks positioning ICSID at odds with contemporary legal dynamics. Whether this omission becomes its Achilles heel will hinge on ICSID’s willingness to embrace emerging trends in timely fashion.

Disclaimer: The information contained in this article is of a general nature and is not intended to address the circumstances of any particular individual or entity. While the information is accurate as at date hereof, there can be no guarantee that the information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation.