Jurisdiction under Article 25 of the International Centre for Settlement of Investment Disputes Convention

Abstract

Abstract This chapter discusses the effect and operation of Article 25 of the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (the ICSID Convention). Article 25 provides that ‘the jurisdiction of the Centre shall extend to any legal dispute arising directly out of an investment, between a Contracting State (or any constituent subdivision or agency of a Contracting State designated to the Centre by that State) and a national of another Contracting State, which the parties to the dispute consent in writing to submit to the Centre’. It follows that an ICSID tribunal may, as a matter of jurisdiction, have to consider whether a body against which a claim is made satisfies the test of being a ‘constituent subdivision or agency’. Jurisdiction under Article 25 would depend on satisfying this test, just as it depends on their being a ‘legal dispute arising directly out of an investment’. If a State makes clear that it accepts an agency as such, then the State must be taken to be aware and to accept that this will be communicated to the Centre by the investor at latest when it becomes material for the investor to institute ICSID arbitration.