Article 51 of the Convention on the Settlement of Investment Disputes Between States and Nationals of Other States, of the International Centre for Settlement of Investment Disputes (the “IC SID”), entitles the party who gains knowledge of a fact which would have decisively influenced the rendering of an award, to request the revision of said award.

The aforementioned Article states:

Either party may request revision of the award by an application in writing addressed to the Secretary-General on the ground of discovery of some fact of such a nature as decisively to affect the award, provided that when the award was rendered that fact was unknown to the Tribunal and to the applicant and that the applicant's ignorance of that fact was not due to negligence.

As it can be accurately deducted from the Article itself, this motion is aimed to a very specific purpose: to remedy awards that have been rendered by a court that lacks relevant information which is of such nature that one can reasonably believe that the award may have been substantially different having the court had that information in the first place. Therefore, this revision can only be justified by facts that have very specific characteristics, established in Article 51 of the IC SID Convention, and “the un fulfillment of so much as one of these formal requirements provided in Article 51 would implicate the mandatory inadmissibility of the revision request”1. An IC SID Court recently put this rule into practice by declaring a revision request inadmissible.

Almost 12 years ago, the Republic of Chile was sued for damages totaling over five hundred million US dollars allegedly caused by the expropriation by the Chilean government of a newspaper in 1973. Chile never recognized the plaintiffs’ rights over the newspaper and paid the corresponding damages to other persons who, from Chile’s point of view, were the newspaper’s legitimate owners according to Chilean law.

On May, 2008 the IC SID Court ruled in favor of the plaintiffs but granting them only 10 million US dollars - award which has not been enforced yet, since Chile requested its annulment based on the existence of several and serious defects in said award.

Viewing the amount awarded as noticeably inferior, plaintiffs requested the revision of the award based on Article 51 of the IC SID Convention. They argued that neither they nor the court knew, at the time of rendering the award, a fact that would have influenced the award in a decisive manner: a statement issued by the Chilean Defense Council (Consejo de Defensa del Estado), dated February, 2008, in which it officially recognized that the Supreme Court case law has repeatedly declared all expropriations performed under Decree 77 of the year 1973 (the same decree under which the newspaper was confiscated) null and void ab initio, ad aeternum y ex officio.

The defendant stated that the revision of an award cannot be used as an under covered appeal and stated that the “new facts” did not fulfill the requirements established in Article 51 of the IC SID Convention: (I) that the revision is requested on grounds of having discovered some new fact; (ii) that said fact is of such nature as decisively to affect the award; (iii) that, when the award was rendered, the fact was unknown to the court and to the applicant; and, (iv) that the applicant’s ignorance of such fact was not due to negligence. Therefore, they requested that the revision be denied.

In November 2009, the court delivered its ruling and held that the plaintiffs could not prove that their ignorance of the Chilean Defense Council representations was not due to negligence. In fact, considering the evidence provided by the defendant, the court considered “unlikely”2 that the plaintiffs were not aware of their statement; however, it granted them the benefit of the doubt regarding their awareness of the legal implications that said representation had in their specific case. Nevertheless, the court determined that the fact was not of such relevance as to have a definite impact on the disputed award, since: (I) the statement was issued by the Chilean Defense Council in relation to an entirely different case - the indemnification granted by the Chilean Republic to the Chilean Communist Party for the expropriation of a press; (ii) plaintiffs could not prove that the intention of the Chilean Defense Council was to set the Republic’s position regarding other expropriation cases, such as the plaintiffs’ case; and (iii) importantly,  plaintiffs could not prove that these statements could have decisively affected the award, particularly considering the fact that the Chilean Law does not have any law, decree or rule that makes judicial precedents legally binding for other cases.

Consequently, the Court declared the revision inadmissible and even imposed on plaintiffs the obligation of paying the Republic of Chile’s legal fees and costs, including the arbitration fees.

In my opinion this ruling is of great importance, since it does not only implicate the full application of the requirements established in the IC SID Convention, but also frowns upon its unjustified request, by imposing on plaintiffs the payment of defendant’s legal fees and costs.