As the most important dispute resolution mechanism in international investment, the ICSID system is valued for the efficiency of its proceedings and the finality of its awards. Due to the significance of ICSID to international investment laws, the international arbitration community has been calling for a high degree of substantive fairness in ICSID awards. However, based on past decisions, ICSID has not been able to strike a balance between procedural justice and substantive fairness. The drafters of the ICSID Convention intended the ICSID internal annulment system to be an error correction mechanism or a remedy for the parties to a ruling, when an arbitral tribunal or an arbitration report seriously violated the provisions. The ICSID annulment procedure is different from the appeal mechanism, and its review is based on extremely limited reasons and does not include a review of legal errors. Currently, the third working group of UNCITRAL is reforming the ISDS system, and the revision of the ICSID arbitration rules is also underway. This article discusses how to develop the current ICSID annulment system to promote greater substantive fairness in ICSID decisions.

I. Introduction
II. Perceived Drawbacks of the ICS IDAnnulment System
    A. Conflict of Values: Substantive Fairness v. Procedural Efficiency
    B. Current Situation of an Annulment System: Different ConclusionsMay Be Reached in Similar Cases
    C. Disputes on the Application of ICSID Article 52.1(b)
III. Interpretation of “the Arbitral TribunalManifestly Exceeded its Power
    A. The Ad hoc Committee’s interpretation of ‘manifestly’
    B. “Manifest Excess of Power” Reflected in “Defects in Jurisdiction”
    C. “Manifest Excess of Power” Reflected in “Application of Laws”
IV. Models of External Reforms of ICS IDArbitration Mechanism
    A. External Appeal System
    B. The Problems Revolving around the Establishment ofan Appellate System outside ICSID
V. Improvement within the ICS IDArbitration System
    A. Building an Appeal Mechanism within ICSID
    B. ‘Reparation’ of the present ICSID Remedy System
VI. Conclusion
References

• Huan Qi(Law Faculty of the China University of Political Science and Law (“CUPL”))
• Yutian Guan(International Law School of CUPL.)