THE AUTHOR:
Varun Chikhale, Advocate at Bombay High Court
On 17 July 2026, an ad hoc Committee constituted under the ICSID Convention annulled, in its entirety, the award rendered against the Republic of the Gambia in West African Aquaculture Ltd, Kurt Lennart Hansson and Martje Bolt Hansson v. Republic of The Gambia (ICSID Case No. ARB/18/10). The decision is understood to be the first instance in which an ICSID award has been annulled in full solely on the ground that the tribunal failed to state reasons, under Article 52(1)(e) of the ICSID Convention. The ruling relieves The Gambia of a liability that, with accrued interest, had grown to approximately USD 33 million, and reopens a question that has divided ad hoc committees for four decades: how searching must a tribunal’s reasoning be, particularly on jurisdiction, before its silence becomes fatal to the award.
Background
The dispute traces back to June 2015, when Gambian military units, acting on the instructions of then-president Yahya Jammeh, seized a shrimp farming business operated by the Claimants. The Claimants commenced ICSID arbitration, and the case turned on a single, decisive jurisdictional question: whether The Gambia had given the written consent to ICSID arbitration required by Article 25(1) of the ICSID Convention. On 25 March 2024, the Tribunal split. The majority upheld jurisdiction and found that The Gambia had unlawfully expropriated the Claimants’ investment. One member dissented
The Annulment Application
In July 2024, The Gambia applied for annulment under Article 52 of the ICSID Convention, on two grounds: that the majority had manifestly exceeded its powers by asserting jurisdiction it did not possess and by failing to apply the proper law; and that the award failed to state reasons in respect of five outcome-determinative jurisdictional findings.
The Committee, composed of Dr. Veijo Heiskanen (President), Ms. Erica Stein and Professor Githu Muigai, annulled the award in its entirety on the second ground, finding that the majority had failed to state reasons for its decision on jurisdiction, and issued a costs order in The Gambia’s favour. The Decision on Annulment itself is not yet public, so the full extent of the Committee’s reasoning will only become clear once it is released; what follows is necessarily provisional.
Article 52(1)(e) in ICSID Annulment Practice
Failure to state reasons is, on paper, one of the narrowest grounds in Article 52(1). Ad hoc committees have consistently held, going back to Klöckner v. Cameroon and MINE v. Guinea, that the ground concerns the absence or incoherence of reasoning, not the correctness of the tribunal’s conclusions: a committee cannot annul merely because it would have reasoned differently or reached a different result. The bar, as later articulated in cases such as Wena Hotels v. Egypt and Vivendi I v. Argentina, is whether a reader can follow the tribunal’s reasoning from the facts and submissions through to its conclusion. Reasons that are contradictory, so inadequate as to be unintelligible, or simply missing on an outcome-determinative point may justify annulment, but a tribunal is not required to address every argument raised.
Two features of the Committee’s ruling stand out against that backdrop. First, committees have traditionally been more willing to annul discrete parts of an award for lack of reasons than to annul the whole; the ICSID Secretariat’s Background Paper on Annulment records that outright annulment in full, on this ground alone, has been rare. Second, and more significantly, the deficiency here went to jurisdiction, the Tribunal’s authority to hear the case at all, rather than to the merits or quantum. Where a tribunal’s finding that it has jurisdiction is inadequately reasoned, everything that follows from it, including the merits and damages analysis, falls away with it, which is presumably why the Committee annulled the award in its entirety rather than severing the jurisdictional finding from the rest.
Significance
The decision is likely to be read as a signal that the duty to give reasons carries particular weight where jurisdiction is in dispute, given that jurisdiction is the foundation of a tribunal’s authority to decide anything else. If confirmed by the published text, the ruling would sit at the more exacting end of the Article 52(1)(e) spectrum, alongside earlier decisions holding that a tribunal cannot discharge its duty to give reasons through inference or by leaving a reader to reconstruct the logic of a jurisdictional finding, while committees continue to resist entertaining unhappiness with the merits of a jurisdictional finding under the guise of a reasons challenge.
For states facing jurisdictional objections, the decision is a reminder that a tribunal’s silence, or an insufficiently reasoned finding, on consent to arbitrate can undo an award regardless of how thoroughly the merits were addressed. For tribunals, it underscores the practical stakes of Article 48(3) of the Convention, which already requires an award to state the reasons on which it is based: a jurisdictional ruling that survives on the strength of its outcome, without a reasoned path to get there, remains exposed at the annulment stage. Whether the decision will be treated as an outlier confined to its facts, or as the start of a stricter line of practice on jurisdictional reasoning specifically, will depend on how ad hoc committees in subsequent cases engage with it once the full text is published.
ABOUT THE AUTHOR
Varun Chikhale is an Advocate at the Bombay High Court. He is currently pursuing a postgraduate degree in Securities Law at the Government Law College in Mumbai. He completed his Bachelor’s studies at the Symbiosis Law School, Nagpur.
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