An analytical study of expansion of supervision over application of governing substantive rules based on excess of power in ICSID precedent

Document Type : Research Paper

Authors

1 Associate Professor, Department of Private and Islamic Law, Faculty of Law and Political Science, University of Tehran, Tehran, Iran.

2 PhD Candidate in Private Law, Faculty of Law and Political Science, University of Tehran, Tehran, Iran.

Abstract

Introduction
Determining the appropriate limit of supervision over arbitration awards is one of the important issues in arbitration law, and there are different views about it. supervision over arbitration awards issued in the ICSID, which were issued within the framework of the Washington Convention, is not an exception, and there is no unanimity of opinions regarding the scope of the annulment process and its grounds, either at the level of doctrine or in the arbitration procedure. One of these controversial issues is the way to exercise supervision based on the ground of excess of power in relation to the legal rules governing the subject matter of the dispute. That is, whether the parties to the arbitration proceedings can object to the interpretation and application of the governing substantive law by the arbitral tribunal, and whether the hearing of the annulment of the arbitrator's award can include the monitoring of mistakes in the content and provisions of the rules governing the substance of the dispute. There are two general approaches in this field. According to one approach, arbitrator's error in substantive law will cannot be a ground for annulment under the excess of power; Because the arbitrator has gone beyond the scope of his authority only in the case that he or she basically does not apply the rules governing the substance, but if it is confirmed even briefly that the arbitrator has applied the governing rules, it is assumed that the arbitrator acts within the framework of his authority and interpretation and application of the governing rules is also part of the arbitrator's mission. In another view, a very gross mistake in the governing rules which amounts to not applying those will mean that arbitrator has exceeded their power. As a result, the supervisory authority can examine the substance of the arbitrators' legal arguments. These dual approaches have also been brought up in ICSID arbitrations and have led to differences opinions and views.
Method
In this research, a descriptive and qualitative method is being used and legal date is based on arbitral awards renderd in ICSID.
Conclusion
After examining these two approaches and the viewpoints and arguments of supporters and opponents, it has been concluded that although in the current order of the Washington Convention, the acceptance of such a development is accompanied by oppositions, because of the adverse effects of extensive monitoring of arbitration awards and annulment in terms of time, cost, but there are valid reasons for accepting a minimum supervision over the application of the governing substantive law, as well as designing a more comprehensive supervisory structure in the light of the amendment of the Washington Convention in the future to supervise the legal aspect of arbitral awards, which can lay the groundwork for the development of the legitimacy of the alternative dispute resolution in the field of Investment, especially from the point of view of governments.

Keywords

References

منابع
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DOI: 10.29252/lawresearch.22.87.357    
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Law Quarterly
Volume 55, Issue 2
August 2025
Pages 209-230

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