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Oct 01, 2009

Defending Investment Treaty Awards: Is There an ICSID Advantage?

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Partner Yas Banifatemi (Paris-International Arbitration) has published an article “Defending Investment Treaty Awards: Is There an ICSID Advantage?.” in 50 Years of the New York Convention, ICCA Congress Series No. 14, at 318 (October 1, 2009). The following is an excerpt.

“Common wisdom has it that, in investment matters, the ICSID system has achieved in the last decade an efficiency outshining, to a certain extent, other international arbitration fora. The question here is not so much ICSID's success and expanding caseload since the late 1990s, in particular as a result of the explosion of the number of bilateral investment treaties (BITs) providing for ICSID arbitration and the investors' recourse to those treaties in their disputes with host States around the world. Rather, it is important to focus on the internal reasons for such proclaimed efficiency that can be found in the ICSID Convention itself.[…] International arbitration was revolutionized in 1958 by the adoption of the New York Convention laying the grounds for the facilitation of the enforcement mechanism and a limitation of the annulment grounds of international arbitral awards. Fifty years later, the success of the New York Convention is undeniable. In 1965, the ICSID Convention similarly introduced two important innovations in investment matters, by enabling the self-executory nature of arbitral awards and making it an obligation for State parties under Art. 54 to treat arbitral awards as if they were a final judgment of their own courts, and by establishing in Art. 52 a self-contained annulment system. To what extent have the ICSID rules, in hindsight, achieved greater efficiency such that ICSID arbitration is today the investors' preferred option?”

View the full article, Defending Investment Treaty Awards: Is There an ICSID Advantage?