International center for the settlement of investment disputes

International Center for Settlement of Investment Disputes
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ICSID headquarters in the World Bank building in Washington
Organization type	Independent organization
Abbreviation	ICSID
management	Meg Kinnear
Founded	1965
Headquarters	Washington, DC
http://www.worldbank.org/icsid/

The International Center for Settlement of Investment Disputes ( English International Center for Settlement of Investment Disputes - ICSID ) is an international arbitration institution based in Washington, DC , that the World Bank Group belongs. As the most important institution of investment arbitration, the ICSID supports the settlement of disputes, especially in disputes between investors and states within the framework of bilateral and multilateral investment protection agreements , by offering procedural rules, premises, a secretariat and administrative support for arbitration and mediation. Unlike the International Court of Justice , for example, the ICSID itself does not have any judicial functions.

General and history

Dark green = ICSID in effect; light green = ICSID signed, ratification pending; red = former member states

The ICSID is one of five international organizations that belong to the World Bank Group. It is based in Washington, DC, where the World Bank headquarters are, and is located in the same building. However, the ICSID is not a special agency of the United Nations according to Article 57 of the UN Charter .

The ICSID was founded under the leadership of the World Bank within the framework of the "Convention on the Settlement of Investment Disputes between States and Citizens of Other Countries". The founding document and legal basis is the "Convention for the Settlement of Investment Disputes between States and Nationals of Other States" of 1965. The Convention entered into force on October 14, 1965. In June 2014, 159 countries signed the ICSID Convention, 150 of which had deposited the instruments of ratification and thus became contracting states. Germany is a founding member. In the first 30 years of its existence, the ICSID handled only one case per year on average. The number of cases has risen sharply since 1995. In the 2008 financial year , ICSID recorded a record increase to 48 appeals to settle investment disputes (305 cases from its foundation to January 2010, 73% of which are based on bilateral or multilateral investment protection agreements).

With effect from November 3, 2007, Bolivia left the ICSID. Ecuador terminated the convention with effect from January 7, 2010, Venezuela with effect from July 25, 2012.

Investment protection agreements have often been heavily criticized in recent years . For example, a lack of transparency and a restriction of state sovereignty were criticized.

Organization and structure

The ICSID consists of two main bodies - the Administrative Council and the Secretariat, headed by the Secretary-General . The Canadian Meg Kinnear has held this office since June 22, 2009. The board of directors consists of one representative from each member state. Its meetings take place under the direction of the incumbent President of the World Bank, who, however, has no voting rights. The main tasks of the Board of Directors include the adoption of procedural rules, the adoption of the budget and the election of the Secretary General. The task of the Secretary General is to manage and represent the ICSID. In addition, he has a prima facie right to examine the admissibility of newly filed complaints before the ICSID.

Purpose and character of the ICSID

The ICSID is intended to form a neutral international dispute settlement institution that can act independently of national courts. The reasons for investment disputes are often a divergence between the political interests of the host country and the economic interests of the investor. Such divergence often occurs because an investor's profitability calculations stretch over 30-40 years, while the political stance on an investment project does not always remain unchanged over decades. A project that was politically very welcome at the beginning and was happily “brought into the country” can, after a change in policy, become a political legacy or even be downright undesirable. Prominent examples from the past include US investments in Cuba after the Castro Revolution in 1959 (see Cuban Revolution # After the Victory ) or in Iran after the fall of the Shah in 1979 (see Iran-United States Claims Tribunal ). (Engl. BIT = Bilateral Investment Treaties, bilateral international treaties for the protection and promotion of investment Bilateral investment treaties ) and plurilateral investment treaties , many states have committed to provide investor protection regardless of the current political situation. In this way, the willingness of foreign investors to invest is to be increased. The ICSID offers the possibility to sue for this protection before arbitration tribunals. It is not the only such possibility. Many bilateral investment agreements also provide for arbitration proceedings under the direction of other institutions, such as the ICC or the LCIA . In these proceedings, the opposing interests of the host state and foreign investor are to be balanced. The investor benefits from a procedure before the ICSID as an integrated part of the World Bank that hardly any state can afford to fall into disrepute with the World Bank. Theoretically, at least, there is a possibility for the World Bank to refuse a state new loans. As far as can be seen, the World Bank has never made use of this theoretical option in connection with the ICSID.

For the purpose of settling investment disputes that have arisen, ICSID provides the procedural organization and administration, premises and technical aids for investment disputes between contracting states and companies from other contracting states. The ICSID does not act as an arbitrator or mediator itself. It only supports the implementation of arbitration / mediation proceedings in the area of ​​cross-border investments by defining certain regulations and taking on administrative activities . The ICSID cannot therefore be regarded as a permanent court. However, it is integrated into a fixed institutional framework and has clear procedural rules. It also has a list of possible referees, a so-called "panel". The contracting states of the ICSID can each nominate 4 arbitrators for this list, the ICSID nominates others. However, the parties to the dispute are not bound by the list. The ICSID Convention does not contain any direct content-related regulations on investment protection. Bilateral investment agreements and investment protection agreements establish such substantive rules, as do some regional or sectoral economic agreements , for example in Chapter 11 of the NAFTA Treaty or in the Energy Charter Treaty . The planned free trade agreement between the EU and the USA, the TTIP (Transatlantic Trade and Investment Partnership), should also contain such rules.

Area of ​​responsibility of the ICSID

The subject of the dispute must be an investment dispute for the ICSID to take action. There must be an "investment" , i.e. an investment (the German official translation speaks a bit too narrowly of "capital investment") by a member of one state in another state, both states must have ratified the ICSID agreement and both parties must settle the dispute through an ICSID tribunal have agreed.

Definition of the term "investment"

The relevant bilateral investment agreement and Art. 25 ICSID Convention regulate what exactly is meant by an “investment” . The definition is often very broad and non-exhaustive.

The model contract for German bilateral investment agreements (model IFV 2008) defines "investment" in Art. 1, Para. 2 as follows:

"Assets of any kind which are invested directly or indirectly by investors of one Contracting State in the territory of the other Contracting State [...] in particular: a) ownership of movable and immovable property and other rights in rem such as mortgages and liens; b) shares in companies and other types of participations in companies; c) Claims to money used to create economic value or claims to services that have economic value; d) Intellectual property rights, in particular copyrights and related property rights, patents, utility models, industrial designs, trademarks, plant variety rights; e) trade names, trade and business secrets, technical processes as well as know-how and goodwill; f) public law concessions, including exploration and extraction concessions for natural resources. "

Germany had signed a total of 136 bilateral investment agreements up to 2014 , of which 127 are in force. It takes the top spot ahead of Switzerland and the People's Republic of China. The vast majority of them provide for investor-state arbitration.

UNCTAD has around 3000 bilateral investment agreements worldwide . Exact figures as to how many of them provide for investor-state arbitration do not exist, but a percentage of over 50% is assumed.

Additional facility

If the prerequisites for the opening of the ICSID's area of ​​responsibility are not met, it can still supervise investment arbitration proceedings within the framework of the "Additional Facility" if the parties agree on this and the General Secretary of ICSID agrees.

Procedure

Proceedings before the ICSID follow roughly the same rules as private arbitration , but with a few special features.

Appointment of the arbitrators

Depending on the agreement of the parties, disputes can be decided by a sole arbitrator or a tribunal made up of an odd number of arbitrators. If the parties do not agree, the tribunal consists of three arbitrators, one of whom is appointed by each party. The third arbitrator will be determined jointly by the parties or, if they do not agree within 90 days, by the Chairman of the Administrative Council of ICSID.

The ICSID maintains a list of possible arbitrators ("panels") who are nominated for this by the contracting states of the Convention. However, the parties do not have to appoint their arbitrators from the panel.

Arbitrators of the same nationality as one of the parties are only permitted if the other party agrees.

Remedies

Unlike most other arbitral awards, the judgments of ICSID tribunals cannot be overturned by national courts. The ICSID Convention itself offers three remedies:

• If the interpretation of an award is unclear, either party can request a binding interpretation, if possible to be made by the arbitral tribunal that originally made the award.
• If, after the award of the award, facts become known that would have significantly influenced the award, a party can request an amendment within 90 days of the fact that the award was made known . The right expires no later than three years after the arbitration award has been made.
• An application can be made to set aside the arbitral award within 120 days. A so-called "Annulment Committee" made up of three people, selected by the Chairman of the Administrative Council from the ICSID panel, decides on him. The prerequisite for repeal is that the tribunal has not been correctly compiled, has "obviously" exceeded its competence, corruption of an arbitrator, serious deviations from basic procedural rules or the lack of justification for the arbitral award (Art. 52 ICSID Convention).

Something different applies to arbitration proceedings in the context of the Additional Facility : They are subject to the applicable arbitration law at the place of arbitration and can be attacked before the courts there (in Germany according to Section 1061 ZPO).

Effect of the ICSID arbitration rulings

The arbitration award issued must be implemented by the member state directly and, like a final judgment issued by the respective state's own courts, by the state. The ICSID Convention does not, however, affect the principles of state immunity against enforcement.

The proceedings of the arbitral tribunal and the award itself will remain secret, unless the two parties agree to their publication. However, this approval is given in the great majority of the decided cases and the arbitral awards can be read in full on the Internet.

literature

Literature on the ICSID

• Burkhard Schöbener, Lars Markert: The International Center for Settlement of Investment Disputes (ICSID). Organization, procedures and current developments . In: Journal for Comparative Law . Archive for international business law (ZVglRWiss), 105th vol. (2006), pp. 65–116.
• Armin von Bogdandy, Ingo Venzke: In whose name? International courts in times of global governance . Suhrkamp 2014, ISBN 978-3-518-29688-2
• Franz-Jörg Semler: Arbitration in the context of investment protection agreements of the Federal Republic of Germany . In: Arbitration VZ 2003, 97 .

ICSID review

Since 1986, the ICSID has published a biannual magazine in which articles, case discussions and literature reviews on international investment protection law appear. The ICSID Review - Foreign Investment Law Journal was published by Johns Hopkins University Press up to and including 2011 , and has since been published by Oxford University Press . It is freely available within Germany under a national license.

• ICSID Review - Journal website, ISSN  0258-3690

Press reports

• Petra Pinzler , Wolfgang Uchatius, Kerstin Kohlenberg: Shadow Justice. In the name of money. Vattenfall against Germany . In: Die Zeit No. 10/2014. March 10, 2014. Retrieved April 22, 2014.
• David Böcking: Free trade agreement: "We need equality of arms between the state and corporations" . Interview with the judge at ICSID Klaus Sachs, lawyer in the commercial law firm CMS Hasche Sigle . In: Spiegel online. March 26, 2014. Retrieved April 22, 2014.
• Jannis Brühl: Investment protection in the free trade agreement TTIP Europe in court Süddeutsche Zeitung (online edition). May 1, 2014. Retrieved March 19, 2015.
• Petra Pinzler: Europe absurd: Foreign corporations are to receive special rights of action under TTIP - that's what the EU wants. Only now has Brussels itself fallen victim to such a procedure . Die Zeit, March 31, 2015

Web links

• ICSID website (in English)
• Convention on the Settlement of Investment Disputes between States and Nationals of Other States (German translation)
• Info page of the Frankfurt Chamber of Commerce and Industry

Individual evidence

1. ↑ Background Information about ICSID  ( page no longer available , search in web archives )  Info: The link was automatically marked as defective. Please check the link according to the instructions and then remove this notice.  
2. ^ Bishop / Crawford, Foreign Investment Disputes: Cases, Materials and Commentary, 2nd ed. 2014, p. 1
3. ↑ Reed, Paulsson et al., Guide to ICSID Arbitration, 2nd ed. 2010, p. 56
4. ↑ Archive link ( Memento of the original from April 30, 2014 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice.  
5. ↑ Archive link ( Memento of the original from April 30, 2014 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice.  
6. ↑ Archive link ( Memento of the original from April 30, 2014 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice.  
7. ↑ Archived copy ( memento of the original dated February 24, 2016 in the Internet Archive ) Info: The archive link was inserted automatically and not yet checked. Please check the original and archive link according to the instructions and then remove this notice. 
8. ↑ Ibrahim Shihata: Foreign Trade. (41) 1986, p. 105 ff.
9. ↑ A directory of current BITs can be found at http://www.italaw.com/investment-treaties
10. ↑ see, for example, Section 10 (2) of the German Model IFV of 2008
11. ↑ See Articles 43 and 48 of the ICSID Convention
12. ↑ Richard Happ In: Rolf A. Schütze (Ed.): Institutional Arbitration. 2nd Edition. Carl Heymanns, 2011, p. 981.
13. ↑ See World Bank Operational Policy 7.40. and World Bank Procedure 7.40.
14. ↑ See Article 1 (2) of the ICSID Convention.
15. ↑ Archive link ( Memento of the original dated February 3, 2014 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice.  
16. ↑ Birgit Bippus: The state treaty recognition of foreign companies in turning away from the seat theory. In: The company . 1988, p. 218.
17. ^ Bishop / Crawford, Foreign Investment Disputes: Cases, Materials and Commentary, 2nd ed. 2014, p. 11
18. ↑ Reed, Paulsson et al., Guide to ICSID Arbitration, 2nd edition 2010, p. 64
19. ↑ On this and the following: Semler, Arbitration within the framework of the Investment Protection Agreement of the Federal Republic of Germany, Arbitration VZ 2003, 97
20. ↑ See Article 54 of the ICSID Convention.
21. ↑ See Articles 54 and 55 of the ICSID Convention.
22. ↑ Archive link ( Memento of the original dated February 3, 2014 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice.