Bolivia and ICSID

The International Center for the Settlement of Investment Disputes (ICSID) is a World Bank body formed under the Convention on the Settlement of Investment Disputes Between States and Nationals of Other States. ICISD is the primary forum for resolving foreign investment disputes, and is incorporated into many bilateral investment treaties (BITs).

Last May, Bolivia gave notice that it was withdrawing from the ICSID treaty, pursuant to art. 71. This was effective November 3, 2007, presumably closing any new claims against it in that forum. The last complaint registered against Bolivia was by a European Telecom on October 31, 2007 (No. ARB/07/28).

This complaint is the target of a civil society campaign against ICSID and BITs, which calls on Robert Zoellick (who oversees ICSID) to prevent the case from going forward. As noted at the Global Arbitration Review, ICSID still has jurisdiction over the proceedings, as art. 72 provides,

Notice by a Contracting State [of its withdrawal] shall not affect the rights or
obligations under this Convention [of the withdrawing state or its nationals]
arising out of consent to the jurisdiction of [ICSID] given by [the
withdrawing state] before such notice was received [by ICSID].

So what does this mean? While some claim that the "before such notice was received" language implies that no new claims can be filed, this is incorrect as it would lead to the six-month notice period as having no effect. Art. 72 is best read as a "survivor" clause, protecting and preserving claims during the six-month notice period. A further question remains as to whether investors can bring claims relating to investments made prior to the notice of withdrawal after the withdrawal is effective (probably not, but a good argument exists).

The people at Global Arbitration Review point to a further issue, the fact that the BITs Bolivia signed call for ICSID to be the dispute forum. Essentially, they claim that Bolivia needs to withdraw (or modify) from all BITs which provide recourse to ICSID, or ICSID remains a valid forum as an ad hoc tribunal. One major problem with this is ICSID's own jurisdictional statement.

Art. 25 states, in relevant part,

The jurisdiction of the Center shall extend [to any investment dispute] between a Contracting State...

The point being, that the ICSID convention does not provide for ad hoc tribunals; it can only hear disputes between contracting states, and once Bolivia withdraws it is no longer a contracting state!