Author: Giuliana Canè*
Published: June 2006
| Topics: Commercial Disputes Investment Disputes Enforcement of Arbitral Awards Enforceability ICSID |
Description: In today’s free market economy the settlement of disputes between parties engaged in commercial activities across national boundaries has become more complex and delicate than ever before. When ICSID was first established under the Convention on the Settlement of Investment Disputes between States and Nationals of Other States in 1966, it was seen as a revolutionary system for conciliation and arbitration of disputes between governments and foreign investors. But history has demonstrated that the natural tendency of a State to retain its sovereignty, particularly its judicial sovereignty, at any cost, turns many multilateral agreements and their in-depth amendments into a long-lasting diplomatic tug of war. Hence the need for greater intellectual debate about the discrepancy between the enforcement of ICSID awards and their execution because, in spite of all its noble intentions, the effectiveness of ICSID awards may vanish if the award is not executed.
The question of enforcement of an award in the case of a dispute between a State and a foreign investor, is a difficult one not only because of its complex legal nature but also because the issue has not received its just share of attention in international legal circles. First and foremost, “enforcement is rarely discussed in detail in the context of arbitration,” because the awards are voluntarily complied with in a large number of cases. Second, enforcement relies on domestic courts, the activities of which are generally not easily accessible to the international community because documents are often in native languages and not always published.
*Giuliana Canè is a Consultant at the World Bank in the Legal Department Private Sector group. The author wishes to thank Ucheora Obumneme Onwuamaegbu, Senior Counsel in ICSID, for his valuable remarks and challenging questions. The findings, interpretations, and conclusions expressed herein are those of the author and do not necessarily reflect the views of the Executive Directors of The World Bank or the governments they represent. The views expressed are those of the author, and any errors and omissions are hers.