Role of Actors and Factors for the Emergence of Contemporary Regime of Investor-State Dispute Settlement

Abstract

Dispute resolution mechanism happened to be the fundamental aspect of the protectionist discourse of foreign investment. The consistent efforts were rolled out on behalf of international economic organizations such as UNO, OECD and IBRD of World Bank Group for the establishment of an impartial forum for the settlement of investment disputes. The opposite approaches of capital-exporting developed economies and less developed recipients of foreign capital lead certain attempts to failure to build consensus for dispute resolution mechanism relating to foreign investments. The World Bank started its effort for a specialized forum for investor-state dispute settlements in 1961. This effort remained successful in building consensus for exclusive jurisdiction for investment disputes. The members of the World Bank Group adopted the international convention on the settlement of investment disputes between states and nationals of other states, 1965, i.e. ICSID Convention. The paper has concluded that the efforts of international organizations and the large-scale recognition of the ICSID mechanism have ensured the legitimacy of the system.