Basics on Investment arbitration (episode 1) by Adedeji Busuyi

Background

In 1965, the World Bank sponsored a treaty to promote foreign investment by establishing a neutral forum for the resolution of investment disputes between States and nationals of other States, known as the Washington Convention, popularly known as the ICSID Convention. The Convention created an organization to deal with investment disputes known as the International Centre for the Settlement of Investment Disputes (ICSID). It essence the ICSID is an autonomous inter-national organization with close connection to the World Bank. Its headquarters is located in Washington, D.C., United States with over 161 Countries as signatories to the Treaty

Jurisdiction

There are three jurisdictional requirements parties must meet in order to have a dispute resolved by ICSID. First, both parties must have consented to arbitrate or conciliate pursuant to ICSID Rules. Second, one party must be a Contracting State, and the other party must be a national of a different Contracting State. Third, the dispute must be a legal dispute arising directly out of an investment. This is provided under Art. 25, ICSID Convention stating thus:

‘The jurisdiction of the Centre shall extend to any legal dispute arising directly out of an investment, between a Contracting State (or any constituent subdivision or agency of a Contracting designated to the Centre by that State) and a national of another Contracting State, which the parties to the dispute consent in writing to submit to the Centre. When the parties have given their consent, no party may withdraw its consent unilaterally.’