The First ICSID Conciliation: Tesoro Petroleum Corporation v. Trinidad and Tobago

Abstract

The Convention on the Settlement of Investment Disputes between States and Nationals of Other States (the ICSID Convention)! provides mechanisms for both the arbitration and conciliation of those investment disputes under facilities of an International Centre (ICSID) established for that purpose. To date, eighteen arbitrations have been brought to ICSID, of which ten have been resolved and eight are still pending.F However, there has been only one conciliation, which was completed in late 1985.3 This is surprising because one might have expected that parties to disputes of this character, sensitive as such disputes usually are, would seek to minimize conflicts by availing themselves of the conciliation mechanism. It may be that parties do not resort to conciliation because the ICSID jurisdictional clause in the relevant agreement does not provide for conciliation or because the parties feel that conciliation, since it is not binding, is a waste of time. Whatever the reason, the fact is that the conciliation mechanism has hardly been used. This Comment (i) describes the procedures which were followed in the conciliation proceeding, Tesoro Petroleum Corporation v. Trinidad and Tobago, (ii) compares arbitration and conciliation from a procedural point of view, and (iii) offers some conclusions about the advisability of the conciliation process. It does not describe in any detail the substantive