The impact of the ICSID convention on the States’ sovereignty

Article By :

Just after the end of World War 2, humanity witnessed a change in many fields. From holding Trials, which now are regarded as milestone towards the establishment of international court that served to be a precedent for later instances of genocides and crimes against humanity, to economic development. Borders were no longer considered as a block for investors to stop them from investing in a total foreign country. The operation of foreign investment started as a win-win game, in which the shareholders make a profit while the State in which the process is being achieved witnesses an economic growth. However, many issues were up to light: States considered foreign investment as an attempt that threatens its natural resources; Investors weren’t protected enough even in front of justice. The beginning of the 20th century was marked with an unbalanced Investor-State relation1 . However, things have changed for the foreign investor’s sake under the Washington’s Convention related to the ‘international centre for settlement of investment disputes’ which entered into force on October 14, 1966. Under the latter convention, the investor was overprotected. As long as investment arbitration is concerned, settlement of investment disputes is the core issue of the process as a whole. However, as the process is going forward, we are noticing that the State is waiving its sovereignty. The latter concept is a foundational principle of international law. Its latin origin –sui juris, essesuaepotestatis, superanus or summa potestas – indicates that sovereignty refers to the supreme authority of the prince or king or, applied to modern international law, the State2 . According to professor Slim Laghmani, whenever there is sovereignty, we’re more concerned about absence of any form of superiority in the sense of having equal Sovereign State in international community that may include some exceptions3 Also, Former dean Abdelfattah Amor believes that, referring to the expression of the latter concept is cursed and exalted4 in a way that it gives us the impression that it’s going into a change to an unknown path within an unidentifiable content and an unrecognizable power5 . Therefore, to emphasize on the latter concept’s importance its waiver is stipulated explicitly by the latter convention.