The International Center For Settlement Of Investment Disputes ( ICSID)

The center was established at the Washington Convention of March 18 1965, for settlements of investment disputes between states and between nationals of ratifying states. The center is part of World Bank and is of special importance to developing countries because of the growing involvement of the World bank in the financing of their development programmes.

The convention is designed to promote mutual confidence between state and foreign investors, thereby stimulating a larger flow of private international capital into countries that ratify it. The center has its own rules and procedures for arbitration and conciliation proceedings for the settlement of investment disputes.

Based in Washington, the international center for settlement of investment disputes conducts its arbitration and conciliation proceedings at the International Bank for Reconstruction and Development. However, parties may agree that proceedings be held at the seat of arbitration at The Hague or such other place approved.

It has an administrative council which designs both the financial and administrative regulations of the center, and the rules for the institution and conduct of arbitration and conciliation coming under the convention.

The administrative council comprises one representative an an alternate representative of each ratifying state, who, in the absence of any contrary designation, is the governor appointed by the state to the bank.

Article 18 of the convention provides that the International Center for Settlement of Investment Disputes has full legal personality having capacity to contract, buy and sell property and institute legal proceedings.

Under article 24 (1) the center is exempted from taxation and customs duties on goods for resale and duties or taxes forming part of goods or which are not more than charges for services rendered.

The arbitration proceeding is governed by the provisions of the Convention, the arbitration rules take effect on the date that parties give their consent to arbitration rules and where a point is not provided for, recourse is made to the rules of the arbitral tribunal, this is provided for in Article 44.

Article 36 (1) provides that the arbitration will be commenced by one of the parties submitting a written request to the Secretary-General. The request shall contain information on the issues in disputes, parties’ identities and their consent.

The Secretary-General then sends a written request to the other party, registers the request and sends the notice of registration to the parties.

An ICSID tribunal may consist of an uneven number of arbitrators as parties may agree upon or a sole administrator. Where the parties fail to agree on the appointment of a President, the chairman of the Administrative Council makes the appointment after consulting with the parties.

Under Article 38 the Chairman cannot appoint an arbitrator who is a national of either party. Also, except where such appointment is agreed upon, majority of the arbitrators must not be co-nationals of the parties. Parties are allowed to appoint arbitrators from members of the panel of arbitrators of ICSID but the chairman cannot be appointed as an arbitrator.

Article 48 provides that an arbitral award made by ICSID arbitral tribunal is recognized and enforced by the national court of a contracting state.

The award must be decided by majority of the members of the tribunal. It must be written and signed by the members of the tribunal voting for it. It must state the reason for the decision. Any member of the tribunal may attach his own opinion to the award, stating if he dissents from the majority decision and stating his dissent. The award is published only by the center with the parties’ consent.

A party seeking enforcement of an arbitral award must furnish the court of the contracting state or other authority designated for the purpose, a copy of award certified by the Secretary-General. Execution of awards is governed by the laws on the enforcement of judgements being in force in the state where execution is sought.

Any of the parties may by a written application to the Secretary-General made within a period of 120 days after the date of the award and in any event within three years after the date of the award, make a request annulling the award on one or more of the above-stated grounds. If the award is annulled upon a request of either party, the dispute will be submitted to a new tribunal.

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