Investment Arbitration- ICSID

At ICSID this year, there have been investment dispute developments involving African parties to Bilateral Investment Treaties (BITs), such as: South Africa's Mining dispute under the Italy-South Africa BIT and Belgo-Luxembourg-South Africa BIT; Egypt's hotel industry dispute under the Denmark-Egypt BIT; Ghana's cocoa production dispute under the Germany-Ghana BIT. Previously, we considered a working paper by the WTO, which found that stricter dispute settlement provisions in BITs do not necessarily result in higher FDI inflows.

ICSID is the International Center for Settlement of Investment Disputes which is an autonomous international institution, considered the leading international arbitration institution devoted to investor-State dispute settlement. ICSID's Membership consists of one hundred and forty  four (144) member States that have deposited their instruments of ratification, acceptance or approval of the Convention and have become ICSID Contracting States.  Overall however, there are currently 155 signatory States to the ICSID Convention. The ICSID Convention is a multilateral treaty formulated by the Executive Directors of the International Bank for Reconstruction and Development (the World Bank). It was opened for signature on March 18, 1965 and entered into force on October 14, 1966. 

ICSID has released this years caseload statistics Report, which shows that: 

Bilateral Investment Treaties (BITS) have a usage rate of 62% and thereby form the substantial basis for consent invoked to establish ICSID's jurisdiction in registered cases. Other legal basis for consent includes: investment contracts between the host state and investor (22%); investment laws of the host state (5%); free trade agreements e.g. NAFTA (6%) and the Energy Charter Treaty (5% ). 


Click Figures to enlarge.

  

The South American region has the largest number of disputes handled at 30% while Sub Saharan Africa's caseload is 16%, and is the third highest after Eastern Europe and Central Asia (22%).

In terms of sectors, gas, oil, mining (25%) and electricity and other energy (13%) and transport (11%) sectors  have the highest number of disputes.  Other highly disputed sectors are water, sanitation and flood protection (8%), finance (8%) and construction (7%).

The distribution of appointments of Arbitrators, Conciliators and ad hoc Committee Members appointed in ICSID Cases is about three quarters (71%) from the west i.e. North America (23%) and Europe (48%), while the rest of the world shares a quarter. Latin America holds a 10% share while Sub Saharan Africa takes a share of only 2%.

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This Report can be accessed here.

In a previous discussion we considered the EC's proposal to accede to the ICSID Convention as part of its new EC Wide investment policy. However that would require the modification of the Convention which currently, is open only to Member States of the World Bank and any State which is a party to the Statute of the International Court of Justice, on the invitation of the ICSID Administrative Council by a vote of two-third of its members.