ATA v Jordan: respondent ordered to pay applicant's costs of discontinued annulment proceedings

An ad hoc committee has taken the unusual step of ordering the respondent in ICSID annulment proceedings to contribute to the applicant's costs, even though the applicant discontinued the proceedings.

Jordan had requested interpretation of the award and the partial annulment of the award. It made clear that it had only made its annulment request to comply with the 120-day time limit for doing so in Article 52 of the ICSID Convention, and that it would only proceed with it if the result in the interpretation proceedings was unfavourable. Following a favourable result in the interpretation proceedings, Jordan withdrew its annulment application and asked for termination of the annulment proceedings. ATA refused to consent and Jordan sought the formal discontinuance of the annulment proceedings and an order for its costs.

The committee has a discretion to determine how and by whom the costs of annulment proceedings should be paid, under Article 61(2) of the Convention and Rule 47(1)(b) of the ICSID Arbitration Rules, read in conjunction with Article 52(4) and Rule 53. The committee noted that there was no general rule as to how costs should be allocated on discontinuance at the request of a party, and that decisions had to be taken on a case-by-case basis.

The committee found that ATA had opposed a number of measures proposed by Jordan and ICSID to defer procedural steps in the annulment proceedings until after the decision on interpretation. In doing so, it had unnecessarily increased the costs of the proceedings for Jordan. The committee therefore considered that "equity and fairness" dictated that ATA should bear part of Jordan's costs and ordered ATA to pay US$80,000 in costs.

The decision contrasts with that in RSM Production Corporation v Grenada (ICSID Case ARB/05/14) (Annulment Proceeding), where the committee ordered the applicant to pay the respondent's costs of discontinued annulment proceedings. In RSM, the committee found that the applicant had effectively abandoned the proceedings, having launched a fresh arbitration (see Legal update, Costs on discontinuance of ICSID proceedings).

For more information on annulment of ICSID awards and ICSID arbitration generally, see Practice notes, Annulment of awards in ICSID arbitration and ICSID arbitration: a step-by-step guide.

Case: ATA Construction, Industrial and Trading Company v The Hashemite Kingdom of Jordan (ICSID Case No ARB/08/2) (Annulment proceeding).