Author: Anibal Sabater*
Published: June 2006
Description: The International Centre for Settlement of Investment Disputes (“ICSID”) is an international agency created by the World Bank which provides facilities for conciliation and arbitration of investment-related disputes, and for the appointment of arbitrators in ad hoc investment arbitration cases. ICSID was established under the Convention on the Settlement of Investment Disputes between States and Nationals of Other States, which came into force on October 14, 1966 (“ICSID Convention”). The “overriding consideration in creating ICSID was the belief that an institution specially designed to facilitate the settlement of investment disputes … could help to promote increased flows of international investment.”
In addition to the innovation that the awards of ICSID tribunals are directly enforceable in all the contracting states, ICSID was the first public international law arbitration system which allowed alien corporations or individuals to sue states directly. In fact, as a general rule, the ICSID system is limited to disputes between a contracting state and a foreign national of another contracting state. This rule, which in principle denies domestic investors access to ICSID, has recently given rise to a strong wave of criticism. For instance, Konrad von Moltke, a Senior Fellow with the International Institute for Sustainable Development based in Canada, has said, “Careful attention needs to be given to the emerging reality that an investment agreement can provide foreign investors with rights that are not available to domestic investors and that create unjustifiable advantages, for example access to additional opportunities for dispute settlement…”
*J.D. Complutense (Madrid), 1997 and Ph.D. Complutense (Madrid), 1999. Admitted to the Bar in California and Spain. International Arbitration Advisor to Fulbright & Jaworski L.L.P. The opinions expressed in this article are those of the author and do not necessarily coincide with those of other attorneys in his firm.