International Centre for Settlement of Investment Disputes (ICSID)8th September 2022 0 By indiafreenotes
The International Centre for Settlement of Investment Disputes (ICSID) is an international arbitration institution established in 1966 for legal dispute resolution and conciliation between international investors and States. ICSID is part of and funded by the World Bank Group, headquartered in Washington, D.C., in the United States. It is an autonomous, multilateral specialized institution to encourage international flow of investment and mitigate non-commercial risks by a treaty drafted by the International Bank for Reconstruction and Development’s executive directors and signed by member countries. As of May 2016, 153 contracting member states agreed to enforce and uphold arbitral awards in accordance with the ICSID Convention.
The centre performs advisory activities and maintains several publications.
ICSID is governed by its Administrative Council which meets annually and elects the centre’s secretary-general and deputy secretary-general, approves rules and regulations, conducts the centre’s case proceedings, and approves the centre’s budget and annual report. The council consists of one representative from each of the centre’s contracting member states and is chaired by the President of the World Bank Group, although the president may not vote. ICSID’s normal operations are carried out by its secretariat, which comprises 40 employees and is led by the secretary-general of ICSID. The secretariat provides support to the Administrative Council in conducting the centre’s proceedings. It also manages the centre’s Panel of Conciliators and Panel of Arbitrators. Each contracting member state may appoint four persons to each panel. 15 In addition to serving as the centre’s principal, the secretary-general is responsible for legally representing ICSID and serving as the registrar of its proceedings. As of 2012, Meg Kinnear serves as the centre’s secretary-general.
Features of the ICSID Convention
The ICSID Convention provides the basic procedural framework for conciliation and arbitration of investment disputes arising between ICSID Member States and investors that qualify as nationals of other Member States. It is a treaty among Member States establishing an independent, impartial and self-contained system.
ICSID proceedings are delocalized from domestic procedures. This means that local courts do not intervene in the ICSID process. Some implications of the self-contained system and other main features include:
- Awards in ICSID Convention arbitrations are final and binding, and may not be set aside by the courts of any Member State (Article 53 of the Convention).
- The limited post-award remedies available are set out in the Convention itself (Articles 49 to 52 of the Convention).
- All Members States, whether or not parties to the dispute, recognize and enforce ICSID Convention monetary awards as final judgments in any Member State (Article 54 of the Convention).
- Once disputing parties consent to ICSID arbitration and unless they agree otherwise, they accept ICSID arbitration as the exclusive remedy (Article 26 of the Convention).
- A Member State cannot give diplomatic protection to any of its nationals which have consented to arbitration under the Convention, except in limited circumstances (Article 27 of the Convention).
- The place of proceedings, i.e., where hearings are held, has no legal significance in Member States (Articles 62 to 63 of the Convention).
- Participants enjoy immunity from legal process in the conduct of the proceedings (Articles 21 to 22 of the Convention).