Lecture 5. International Centre for Settlement of Investment Disputes

I. Theoretical Issues

1.What is ICSID

2.ICSID Convention

3.Joining ICSID

4.Structure of ICSID

Practical Issues - https://icsid.worldbank.org/apps/ICSIDWEB/cases/Pages/AdvancedSearch.aspx - all Judgements

Part 1. Print and be aware of ICSID Convention provisions

Part 2. Study the cases

Case 1. Hassan Awdi, Enterprise Business Consultants, Inc. and Alfa El Corporation v. Romania (ICSID Case No. ARB/10/13

Case 2. Poltava Gas B.V. and Poltava Petroleum Company v. Ukraine (ICSID Case No. ARB/15/9)

1. What is icsid

ICSID is the world’s leading institution devoted to international investment dispute settlement. It has extensive experience in this field, having administered the majority of all international investment cases. States have agreed on ICSID as a forum for investor-State dispute settlement in most international investment treaties and in numerous investment laws and contracts.

ICSID was established in 1966 by the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (the ICSID Convention). The ICSID Convention is a multilateral treaty formulated by the Executive Directors of the World Bank to further the Bank’s objective of promoting international investment. ICSID is an independent, depoliticized and effective dispute-settlement institution. Its availability to investors and States helps to promote international investment by providing confidence in the dispute resolution process. It is also available for state-state disputes under investment treaties and free trade agreements, and as an administrative registry.

ICSID provides for settlement of disputes by conciliation, arbitration or fact-finding. The ICSID process is designed to take account of the special characteristics of international investment disputes and the parties involved, maintaining a careful balance between the interests of investors and host States. Each case is considered by an independent Conciliation Commission or Arbitral Tribunal, after hearing evidence and legal arguments from the parties. A dedicated ICSID case team is assigned to each case and provides expert assistance throughout the process. More than 550 such cases have been administered by ICSID to date.

ICSID also promotes greater awareness of international law on foreign investment and the ICSID process. It has an extensive program of publications, including the leading ICSID Review-Foreign Investment Law Journal and it regularly publishes information about its activities and cases. ICSID staff organize events, give numerous presentations and participate in conferences on international investment dispute settlement worldwide.

Ukraine ratified the Convention April 3, 1998. The Law entered into force June 07, 2000.

2. Icsid Convention

The ICSID Convention is a treaty ratified by 153 Contracting States. It entered into force on October 14, 1966, 30 days after ratification by the first 20 States.  Article 6 of the ICSID Convention requires theAdministrative Council of ICSID to adopt rules of procedure for arbitration and conciliation and for the administrative and financial regulation of the Centre.

The Convention:

• creates the ICSID Administrative Council, Secretariat, Panels of Arbitrators and of Conciliators, and the status, immunities and privileges of the Centre (Chapter I);

• establishes ICSID’s jurisdiction (Chapter II);

• authorizes conciliation (Chapter III);

• authorizes arbitration (Chapter IV);

• addresses replacement and disqualification of conciliators and arbitrators (Chapter V);

• discusses the cost of proceedings (Chapter VI);

• deals with the place of proceedings (Chapter VII);

• provides for disputes between Contracting States (Chapter (VIII);

• provides for an amendment procedure (Chapter IX); and

• includes final provisions such as the processes for signature, ratification, and denunciation of the Convention (Chapter X).

The English ICSID Convention, French Convention du CIRDI, and Spanish Convenio del CIADI are equally authentic versions of the text. ICSID also makes the Convention available in other languages. While not official translations, these may be helpful to parties. 3. Joining ICSID

The ICSID Convention is open for signature on behalf of:

• all States members of the International Bank for Reconstruction and Development (IBRD, a part of the World Bank); and

• any other State which is a party to the Statute of the International Court of Justice, on the invitation of the ICSID Administrative Council by a vote of two-third of its members (Article 67 of the ICSID Convention).

There is no cost to join or maintain membership in ICSID.

The IBRD is the depositary for the ICSID Convention, keeping custody of its original text and receiving signatures and instruments of ratification of the ICSID Convention.

Articles 67 to 75 of the ICSID Convention address membership in ICSID. The process of joining the ICSID Convention consists of: (i) signature; (ii) ratification and (iii) entry into force.

(i) Signature:  A State begins the process of becoming an ICSID Member by advising the Secretary-General of its intent to join ICSID and by signing the ICSID Convention.  The ICSID Convention is open for signature at the principal office of the World Bank at 1818 H Street, NW, Washington, D.C. 20433.  The Convention may be signed directly by the Head of State, Head of Government, or Minister of Foreign Affairs of the State concerned.  Alternatively, a State may authorize a diplomat or other official to sign the ICSID Convention on its behalf by providing that person with an instrument of full powers. Countries that have signed the ICSID Convention are called signatory States. 

(ii) Ratification: Upon completion of its internal steps, the signatory State will deposit an instrument of ratification, acceptance or approval of the ICSID Convention.  The date of deposit is the date on which the instrument is received by the World Bank. 

(iii) Entry into force: The ICSID Convention enters into force for the State concerned 30 days after the date of deposit of the instrument of ratification, acceptance or approval (Article 68(2) of the ICSID Convention).

The ICSID Convention does not provide for treaty reservations. However, Member States may makenotifications and designations on signing, ratifying or any time thereafter.

A Member State may withdraw from the ICSID Convention by written notice to the depositary (Article 71 of the ICSID Convention). This takes effect six months after the date of receipt of the notice. The ICSID Convention contains provisions to safeguard legal rights and obligations before the withdrawal takes effect (Article 72 of the ICSID Convention).

Further information about signature and ratification of the ICSID Convention is available in the Guide to Membership in the ICSID Convention and in the Memorandum on Signature and Ratification, Acceptance or Approval of the ICSID Convention. The Guide to Membership will take governments step by step through the process of joining the ICSID Convention. The Memorandum is a practical guide to the World Bank’s depositary practice under the ICSID Convention designed for use by States.

For further information on how to join ICSID please contact the Secretary-General.

Qualifications for the Panels

The qualifications required of Panel members are inArticle 14 of the ICSID Convention.  Persons nominated must be of high moral character and have recognized competence, particularly in law, but also in commerce, industry or finance.

The designees of a Member State may be of any nationality.

In addition to the criteria in the ICSID Convention, the following attributes are highly desirable for designees:

• knowledge of and experience with international investment law;

• knowledge of and experience with public international law;

• experience and expertise in international arbitration or conciliation;

• ability to conduct an arbitration or conciliation and write an arbitral award  or report in one or more of the Centre’s official languages (English, French and Spanish);

• availability to accept appointments in cases as of the date of designation;

• availability and willingness to travel for case proceedings.

The Centre encourages Member States to designate four qualified persons to each Panel.