Individual Rights, State Interests and the Power to Waive ICSID Jurisdiction under Bilateral Investment Treaties

Abstract

THE TIMES are gone when bilateral investment treaties could be treated as ‘mainly bureaucrats’ treaties' tucked away from the hustle and bustle of the financial world.1 Today, their number is well above 2,000, with more under way. There has been a surge in international arbitration of investment disputes thanks to generic offers to this effect made in the treaties. The first award by a tribunal established under the International Centre for Settlement of Investment Disputes (ICSID) in such a case, Asian Agricultural Products v. Sri Lanka , was delivered in 1990. According to ICSID, at the beginning of 2004 there were 69 cases pending, the majority of which have been brought by investors on the basis of bilateral investment treaties. More proceedings have been instituted before other arbitration institutions and ad hoc under the Arbitration Rules of the United Nations Commission on International Trade Law. There is a growing industry indulging in the strengths of bilateral investment treaties while seeking to flesh out the rights and duties arising under their abstract formulations, an apposite task for ICSID. Bilateral investment treaties are concerned with the relationship between an investor, either a national or a company of one contracting party (the ‘home state’), and the other contracting party (the ‘host state’) in connection with an ‘investment’, taken in a very broad sense,2 in the territory of the latter. In standard bilateral investment treaties the host state undertakes to encourage investments; to accord fair and equitable treatment to investments, which shall enjoy full protection and security; to treat investors and investments as favourably as investors and investments from the host state or any third state; to guarantee unrestricted transfer of investment and returns; not to expropriate investment except for a public interest and on prompt, adequate and effective compensation; and to …