The Annulment Committee of the International Centre for the Settlement of
Investment Disputes (ICSID) confirmed in the arbitral hearing of Fraport AG Frankfurt Airport Services Worldwide v The Philippines [ICSID Case No. ARB/03/25] 23 December 2010) that the right to be heard is a fundamental rule of procedure in international arbitration. Failing to grant such an opportunity will render any arbitral award or decision being susceptible to annulment. In 1997, Fraport, a German company, commenced an investment programme in an international terminal at Manila airport. The Philippine government later cancelled the contract and so Fraport commenced arbitration at ICSID under the Germany-Philippines bilateral investment treaty. After proceedings were closed, but before the award was given, the ICSID accepted further evidence on aspects of Philippine law that purportedly rendered Fraport's involvement illegal (due to restrictions on the control of public utilities by foreign companies). The ICSID upheld the cancellation of the contract without allowing Fraport the opportunity to make its own submissions on that new evidence. The Annulment Committee stated that the right to be heard was recognised in international arbitration, public international law and also recognised in human rights instruments as the right to a fair trial. Failure to allow Fraport to make representations (in particular, about the role of private shareholder agreements that would have clarified Fraport's control) amounted to a serious departure from a fundamental role of procedure and so the decision was annulled. On 23 March, Fraport announced that it will re-open proceedings against The Philippines, with the damages sought now totalling $800 million.