This Decision of the ad hoc Committee addresses a request by the Respondent, the Republic of Peru, to suspend an ICSID annulment proceeding. The suspension was sought pending the outcome of a parallel application for interpretation of the underlying Award, which Peru had filed with the original arbitral tribunal. The central issue before the Committee was whether considerations of procedural economy and efficiency warranted a suspension of the annulment proceeding.

The Parties' Positions

The Respondent argued that the interpretation request was dispositive of, or would substantially narrow, the grounds for annulment advanced by the Applicant, Freeport-McMoRan Inc. Peru contended that the parties fundamentally disagreed on whether the original tribunal had declined jurisdiction over certain penalty and interest claims. A definitive interpretation, it argued, would prevent parallel proceedings, avoid duplicative efforts, and facilitate the Committee's work. Conversely, the Applicant opposed the suspension, characterizing it as an extraordinary remedy sought for tactical and dilatory purposes. Freeport asserted that the interpretation request was belated and that, irrespective of its outcome, the Committee would still be required to adjudicate the annulment application, rendering any suspension inefficient and prejudicial.

The Committee's Analysis and Decision

The Committee affirmed its discretionary authority to suspend the proceeding, guided by the central consideration of whether procedural efficiency and economy would be better served by suspension or continuation. While expressing “serious concern” and “considerable reluctance” due to the “very late stage” at which the Respondent filed its request—a factor weighing heavily against suspension—the Committee’s analysis turned on the potential impact of the interpretation decision. It reasoned that if the original tribunal were to adopt the Respondent's interpretation, it would not merely narrow the issues but would cause a “marked shift in the very nature of the issues” before the Committee, transforming the annulment case from one concerning a failure to decide on the merits to one concerning a failure to state reasons on jurisdiction. The Committee concluded that proceeding with the annulment hearing before such a potential shift would risk necessitating fresh pleadings and a supplementary hearing, an outcome entailing greater delay and costs than an immediate suspension.

Operative Rulings

Balancing these factors, the Committee determined that procedural economy was better served by suspending the proceeding. Accordingly, it ordered that: (1) the annulment proceeding be suspended pending the outcome of the Request for Interpretation; (2) the scheduled hearing dates be vacated; and (3) the question of costs be reserved, noting that the additional costs incurred as a result of the late-filed suspension request may ultimately be borne by the Respondent.