The ICSID system is it broken or it has to be reformed

• Author: Gloria Milena Torres Rojas
• Position: Law School Xiamen University. MB Politics and International Relations
• Pages: 56-67

Vol. 3 No. 1

January, 2019

European Journal of Economics, Law and Social Sciences

IIPCCL Publishing, Graz-Austria

ISSN 2519-1284

Acces online at www.iipccl.org

56

The ICSID system is it broken or it has to be reformed

PhD (C.) Gloria Milena Torres Rojas

Law School Xiamen University. MB Politics and International Relations

Abstract

Since ICSID was established in 1966, this institution have received both praises and critics.

Critics point out that there is bias in favor of investors, that ICSID was established in the interest

of wealthy countries, its links with the World Bank Group, the disregard of environmental

issues and the lack of an appellate mechanism. Taking into consideration those remarks, the

purpose of this article is to assess whether or not the ICSID system is broken or if only needs

to be reformed. The thesis that defends this article is that ICSID is not broken at all, the system

needs only some reforms that need to be implemented so that it can continue its mission of

being a forum of dispute resolution.

Keywords: ICSID, dispute resolution, advantages, enforceability awards, neutrality,

transparency.

Introduction

Since ICSID was established in 1966, this institution has been devoted to international

investment dispute se lement. The ICSID Convention is a multilateral treaty formulated

by the Executive Directors of the World Bank to further the Bank’s objective of promoting

international investment (ICSID, 2017).

ICSID has received both praises and critics. The hypothesis of this paper is that the

ICSID system is not broken as many have stated, the system needs only some reforms

that need to be carried out so that it can continue its mission of being a forum of

dispute resolution. The purpose of this article is to evaluate whether or not the critics

made to ICSID are well grounded and to examine if ICSID is broken or not and if it

needs to be reformed.

In spite of some shortcomings such as the lack of an appellate system and the

disregards of environmental issues. The system o ers more advantages than

disadvantages because of the enforceability of its awards, it avoids national courts,

and ICSID is a depoliticized institution which is independent, autonomous, as well

as transparent, f‌l exible, e cient and neutral.

This paper is structured like this in the f‌i rst part, It will address the critics that some

authors had made to ICSID. In the second part I will assess whether or not those

critics to ICSID make sense or are consistent. On the third part, I will expose ICSID

advantages and f‌i nally some conclusions will be made.

1. Critics to ICSID

First of all, various authors such as Van Harten claim that there is a bias in favor of the

investors. He argues that this is due to the arbitrator’s lack of tenure, which makes them

dependent on prospective claims. Van Harten also states that arbitration lacks in accountability,