e-book2013

ARBITRATION LAW

201

ICSID for the Settlement of Investment Disputes

Att. Suleyman Sevinc

Introduction

As an element of international trade practice, foreign investments

are of great importance. Most actors in international trade conduct their

investment activities in foreign countries. However, the legislation and

the political authorities of the countries where the investments are to

be made may cause incertitude for foreign investors. In order to avoid

such incertitude and encourage investment, states conclude bilateral

or multilateral agreements on the protection of investments and the

contracting states undertake to protect the rights of investors with regards

to investments made in their countries.

Multilateral Protection of Investments

In addition to the bilateral agreements between the states, foreign

investments are also protected by multilateral agreements, such as the

Convention on the Settlement of Investment Disputes between States

and Nationals of Other States (“Convention”). The World Bank initiated

the formulation of the Convention, and it was submitted to its member

governments for their consideration with a view to its signature and

ratification. The Convention entered into force on October 14, 1966, after

being ratified by 20 countries.

The Convention established an institution for the settlement of

disputes, which is the International Centre for the Settlement of Investment

Disputes (“ICSID” or “Centre”) based in Washington, D.C. In accordance

with the provisions of the Convention, ICSID provides facilities for the

conciliation and arbitration of investment disputes between contracting

states and nationals of other contracting states.

The provisions of the Convention are complemented by the

Regulations and Rules adopted by the Administrative Council of the Centre

Article of January 2013