Investor Presentaiton
24
INVESTOR-STATE DISPUTE SETTLEMENT: A SEQUEL
Through ISDS, countries sought to create a neutral forum that
would offer investors the possibility of a fair hearing before a
tribunal unencumbered by domestic political considerations and able
to focus on the legal issues in the dispute. ISDS also offered
investors the possibility of submitting a claim to international
arbitration without the need to convince their home State to espouse
the claim. Host States with less political power saw neutral dispute
settlement as a better alternative than submitting to the strong-arm
tactics of a powerful home State. Advance consent to this form of
adjudication, given by States in IIAS, solved the problem of
sovereign immunity.
The goal of establishing a neutral forum for ISDS led to the
conclusion in 1965 of the Convention on the Settlement of
Investment Disputes between States and Nationals of Other States
(ICSID Convention). The ICSID Convention established an "a-
national" forum the International Centre on Settlement of
Investment Disputes (ICSID)
investors and host States.
to administer disputes between
IIAS often include ICSID arbitration as one of the options for
hearing an investment dispute, but many treaties permit arbitration
under other arbitral rules as well (see section II.D.1).
B. Salient features of ISDS and criticisms of it
In addition to serving as a de-politicized forum, international
arbitration was expected to offer other advantages for settling
investor-State disputes. Investors could have their claims heard by
an independent and qualified tribunal and be assured of adjudicative
neutrality and independence. Both parties could exercise control
over the procedure by selecting arbitrators according to their
expertise in the issues likely to arise in the case. Arbitration is often
described as swifter, cheaper, and more flexible than other dispute
settlement mechanisms. In addition, arbitral awards are readily
enforceable in most jurisdictions under the ICSID Convention and
UNCTAD Series on International Investment Agreements IIView entire presentation