I. Denunciation of the ICSID Convention
The ICSID Convention contains two provisions that regulate denunciation:
II. Non-jurisdictional consequences of a State's denunciation of the ICSID Convention
There are several consequences of denunciation.1 Once denunciation becomes effective, the denouncing State is:
III. Jurisdictional consequences of a State's denunciation of the ICSID Convention
The jurisdictional consequences of denunciation of the ICSID Convention are not straightforward. Tribunals and scholars are divided on the issue - some have upheld jurisdiction8 while others have declined it.9 These divergences arise from the wording of Articles 71 and 72 and due to the Convention’s jurisdictional structure.10
The ICSID Convention has so far been denounced by three States: Bolivia, in 2007, Ecuador, in 2009, and Venezuela, in 2012. However, tribunals have only decided cases against Venezuela, likely due to a peculiarity in Venezuelan investment treaties, most of which provide for arbitration under different international arbitration rules (such as the ICSID Additional Facility Rules, or UNCITRAL Rules) exclusively when ICSID Arbitration is not available.11 Bolivian, Ecuadorian and a few exceptional Venezuelan investment treaties do not have similar limitations.12 Investors that have initiated arbitrations against those States that have denounced the Convention have done so under ICSID Additional Facility13 or UNCITRAL Rules.14
The main issue arising from denunciation of the ICSID Convention is the timing of the claimant’s consent to the Centre’s jurisdiction, as explained in the following sections.
A. Claimant consents to the Centre's jurisdiction before the denouncing State issues its notice
There is broad consensus that a State’s denunciation of the Convention does not affect a tribunal’s jurisdiction over those claims. Two tribunals have addressed this issue and both upheld jurisdiction, arguing that the claimants had consented to the Centre’s jurisdiction before Venezuela had issued its notice denouncing the Convention.15 Another tribunal has confirmed this position outside of the Venezuelan context.16
B. Claimant consents to the Centre's jurisdiction during the six-month notice period
There are diverging views on this issue:
C. Disputes submitted after the notice period
There are also diverging views on this issue:
IV. Denunciation and annulment proceedings
Blackaby, N., ICSID Withdrawal: a Storm in a Teacup?, Les Cahiers de l'Arbitrage/The Paris Journal of International Arbitration, 2008, pp. 45-61.
Bolivar, G., The Effect of Survival and Withdrawal Clauses in Investment Treaties: Protection of Investments in Latin America, in Trakman, L., and Ranieri, N., (eds.), Regionalism in International Investment Law, 2013.
Castro de Figueiredo, R., Euro Telecom v. Bolivia: The Denunciation of the ICSID Convention and ICSID Arbitration under Bits, Transnational Dispute Management, 2009, pp. 1-22.
Dolzer, R., and Schreuer, C., Principles of International Investment Law, 2008.
Durney, M., Legal Effects and Implications of the Denunciation of the ICSID Convention on Unilateral Consent Contained in Bilateral Investment Treaties: A Perspective from Latin American Cases, Max Planck Yearbook of United Nations Law, 2013, pp. 223-304.
Garibaldi, O.M., On The Denunciation Of The ICSID Convention, Consent To ICSID Jurisdiction, And The Limits Of The Contract Analogy, in Binder, C., Kriebaum, U., Reinisch, A., and Wittich, S. (eds.), International Investment Law for the 21st Century: Essays in Honour of Christoph Schreuer, 2009, pp. 251-277.
Gattini, A., Jurisdiction ratione temporis in International Investment Arbitration, in Gattini, A., Tanzi, A., and Fontanelli, F., (eds.), General Principles of Law and International Investment Arbitration, 2018, pp. 111- 129.
Giraud Martinelli, V., Modern Authoritarian Regimes and the Denunciation of the ICSID Convention, in Baltag, C. (ed.), ICSID Convention after 50 years. Unsettled Issues, 2017, pp. 499-508.
Hamida, B., La dénonciation de la convention CIRDI, in Horchani, F., (ed.), CIRDI 45 ans après. Bilan d'un système, 2010, pp. 109-138.
Hepburn, J. Tomka-chaired Tribunal Declines Jurisdiction Over Transban Claim – But Majority Diverges from Fabrica Tribunal, and Sees No Problem with Investor Consent Given After Venezuela’s ICSID Denunciation Notice, IA Reporter, 2017.
Lavopa, F.M., Barreiros, L.E., and Bruno, M.V., How to Kill a BIT and not Die Trying: Legal and Political Challenges of Denouncing or Renegotiating Bilateral Investment Treaties, Journal of International Economic Law, 2013, pp. 869-891.
Lusa Bordin, F., Reasserting Control through Withdrawal from Investment Agreements: What Role for the Law of Treaties?, in Kulick, A., (ed.), Reassertion of Control over the Investment Treaty Regime, 2016, p. 220.
Mancieux, S., Bolivia’s withdrawal from ICSID, Transnational Dispute Management, 2007, pp. 1-6.
Mantilla-Serrano, F., La denuncia de la Convención de Washington. ¿Impide el recurso al CIADI?, Revista Peruana de Arbitraje, 2008, pp. 205-216.
Mantilla-Serrano, F., ¿Existe Hostilidad Hacia el Arbitraje de Inversión en América Latina?, in Fernández-Ballesteros, M.A. and Arias, D. (eds.), Liber Amicorum Bernardo Cremades, 2010, pp. 789-806.
Nolan, M.D., and Sourgens, F.G., The Interplay Between State Consent to ICSID Arbitration and Denunciation of the ICSID Convention: The (Possible) Venezuela Case Study, Transnational Dispute Management, 2007, pp. 1-52.
Parra, A.R., Participation in the ICSID Convention, ICSID Review, 2013, pp. 169-178.
Polanco Lazo, R., Is There a Life for Latin American Countries after Denouncing the ICSID Convention?, Transnational Dispute Management, 2014.
Rastegar, K., Denouncing ICSID, in Binder, C., Kriebaum, U., Reinisch, A., and Wittich, S. (eds.), International Investment Law for the 21st Century: Essays in Honour of Christoph Schreuer, 2009, pp. 278-299.
Ripinsky, S., Venezuela’s Withdrawal from ICSID: What It Does and Does Not Achieve, Investment Treaty News, 2012.
Schnabl, M. and Bédard, J., The Wrong Kind of ‘Interesting’, National Law Journal, 2007.
Schreuer, C., Malintoppi, L., Reinish, A., and Sinclair, A., The ICSID Convention: A Commentary, 2nd ed., 2009.
Schreuer, C., Denunciation of the ICSID Convention and Consent to Arbitration, in Waibel, M., Kaushal, A., Liz Chung, K.H., and Balchin, C., (eds.), The Backlash against Investment Arbitration: Perceptions and Reality, 2010.
Tzanakopoulos, A., Denunciation of the ICSID Convention under the General International Law of Treaties, in Hofmann, R., and Tams, C. (eds.), International Investment Law And General International Law: From Clinical Isolation To Systemic Integration?, 2011, pp. 75-93.
Woodring, B., Denunciations Plus: Evaluating ICSID Withdrawals Bearing Additional New ICSID Provisions, Transnational Dispute Management, 2015, pp. 5-14.
Yusuf, G., and Owczarek, O., Fabrica de Vidrios Los Andes, CA and Owens-Illinois de Venezuela, CA v Bolivarian Republic of Venezuela, Removing the Sword of Damocles: ICSID Denunciation under Articles 71 and 72, ICSID Review, 2018, pp. 331-339.
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