The ICSID Convention (ICSID) - World Arbitration Reporter - Second Edition
Originally from World Arbitration Reporter - Second Edition
I. ORIGINAL IDEALS AND INTENTIONS
In 1961, Aron Broches, General Counsel of the International Bank for Reconstruction and Development (the ‘World Bank’) oversaw the preparation and promulgation of a legal framework for what would become the International Centre for Settlement of Investment Disputes (‘ICSID’), an institution operating within today’s World Bank Group. The intention was to create a depoliticised institution to administer and facilitate the peaceful arbitration or conciliation of disputes between private persons and States arising out of cross-border investments.
Unlike parallel efforts at that time by the Organisation for Economic Cooperation and Development (‘OECD’) and others to develop substantive legal rules for the international protection of foreign investment, Broches envisioned that swifter advances in the interests of economic growth could be made by leaving substantive norms aside and focusing instead on the development of neutral international procedural arrangements for dispute resolution. After a four-year period of negotiation and drafting, the Executive Directors of the World Bank approved the final text of the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (the ‘ICSID Convention’ or sometimes, the ‘Washington Convention’) in March 1965.
The preamble to the ICSID Convention makes clear that its raison d’être is to foster economic development amongst and within its members by making available facilities for the arbitration and conciliation of disputes between private investors and Contracting States. The preamble contends that without such a facility, investment disputes would likely be subject to national legal processes, or diplomatic pressure, which may not be appropriate or efficacious in all cases.