The International Centre for Settlement of Investment Disputes (ICSID): An Empirical Research on the Voting Behavior of Arbitrators

Abstract

After 145 ratifications and hundreds of disputes, the International Centre for Settlement of Investment Disputes (ICSID) conceived by the International Bank for Reconstruction and Development (World Bank) for the promotion of foreign direct investment (FDI) has been under severe debate. While scholars have already focused on the outcome of international investment arbitration to address its independence and neutrality, the voting behavior of arbitrators remains amorphous. The ICSID arbitration is particularly interesting to appraise because its default system avoids the appointment of arbitrators of the same nationality of those of the parties and because it was designed to deal with conflicts not directly involving two states, but a host state and a foreign investor, unlike the traditional structure of international courts, as for example at the International Court of Justice (ICJ) and at the Word Trade Organization (WTO). This paper aims at testing two main hypotheses. Firstly, whether or not arbitrators favor the interest of the parties that select them and, moreover, if the interests of the home-state of arbitrators influence their votes in order to favor parties with similar characteristics, as to wealth, culture (religion, language and legal system), region and democratic level. Secondly, whether or not arbitrators split the differences of the parties’ interest, reaching compromised awards.