Programa de Doctorado en Derecho por la Universidad Carlos III de MadridPresidente: Fernandez Liesa, Carlos Ramon.- Secretario: Gamarra Chopo, Yolanda.- Vocal: Elena Carolina Díaz Galá

Dertliu, Marvin

English

The present research studies the responsibility of the State in the practice of the International Center 
for the Settlement of Investment Disputes between States and nationals of the other States, under the 
Washington Convention of 1965. The survey starts for the very beginning of the activities of the 
Center and its purposes as emerged in the drafting of the Washington Convention, through 
preparatory works: as a body within the framework of the International Bank for Reconstruction and 
Development, ICSID should serve as a specialized body for arbitration in ISDS disputes among 
investors and host States that had as a reason a breach of obligations regarding an investment made 
by the formers in the territory of the latter. The protection under ICSID was far more relevant than
what was granted by other concurrent international fora: ICSID jurisdiction was mandatory, 
inasmuch that the fail from one party to participate to the arbitration, was overcame by the 
mechanisms of automatism settled thereto, in such way that unwillingness to participate did not hinder 
nor impede the valid establishment of a Tribunal and its rendering of a final award. On the other 
hand, ICSID awards enjoyed a special status of recognition and enforcement and were executable in 
any member State where the loosing party had assets to attack in case of unwillingness to perform 
the obligations arising from the condemnation. Investments to enjoy such protection should bring 
some specific features: it must be investments carrying on a consistent project in the host State, of 
medium ¿ long durability, and implying a substantial contribution to the development of the local 
economy. These very basics of the ICSID arbitration, were incorporated in the criteria of its 
jurisdiction in order to prevent, since the beginning, claims running outside the competence of the 
Center. The first chapter deals precisely with the matters of jurisdiction. The chapter illustrates the 
criteria faced in art. 25 of the ICSID Conventions and deeps with the requirements in terms of 
subjective requirements for the investor and the respondent to be met, and the objective element of 
the investment breach sought for relief. Among the subjective requirements, differences are found 
between claimant and respondent. Claimant shall be a particular, national of one of the States parties 
to the convention. Such State shall not necessarily entered in an investment treaty with the host State: 
such aspects is related with the consent to arbitration of the latter, but such consent shall also be 
conferred through unilateral declaration or incorporated in a contract vis-à-vis to the investor, on the 
sole condition it shall be expressed in written. As per the claimant, ICSID Tribunals embody a wide 
criterion of legitimacy: investor shall be considered also the controlling entity of a locally based 
company, and also the indirect controller of the company performing the investment if the latter is 
localized in a State outside the ICSID membership, under the condition that the last controller had 
the nationality of such ultimate member State. Also the fact that claimant is a State owned entity, is 
not seen as transforming the claim from an ISDS to a State ¿ to ¿ State arbitration outside ICSID 
jurisdiction: in those cases a claimant orientated approach prevails, under the condition that the 
private entity under State control does not perform functions and duties expression to public powers, 
which are able to transform it into an agent of the home State pursuant to articles of the UN -ILC 
Draft Articles on State responsibility. Claimant may exceptionally be even a company of the 
nationality of the host State. Convention therein takes advantage from the common experience of 
foreigners to incorporate a local company to carry out the operations at stake but requires in that case 
the consent of the host State to treat the local company as a foreigner because of foreign control.
On the other hand, respondent always shall be a State. Agencies or subdivisions may be sued only 
upon due authorization of the State itself. Other and radically different position is the suitability of 
the State as a consequence of acts realized by internal agencies or subdivisions. In those cases 
Tribunals analysis focuses to the attributability of such conducts to the State itself in order to allow 
its passive locus standi on the claim.
Once proceeding are put in place, the core element of arbitration is the assessment of the State¿s 
responsibility. The third chapter deals precisely with the criterion ruling such responsibility 
elaborated through customary international law and investment treaties. A detailed analysis is pursued 
through ICSID Tribunal jurisprudence in order to assess the meaning and extent of investment clauses 
most commonly used in modern international investment law. A detailed attention is devoted in the 
highly debated differentiation between contract claims and treaty claims, umbrella clause and the fair 
and equitable treatment standard. 
Extensive use is made of the jurisprudence of the Center. The research had collected all accessible 
judgement from the very foundations of ICSID to the 2020. 
The aim was to build a consistent approach to the theory of the responsibility of the State followed 
by the ICSID Tribunals, and to compare it with other system of cooperation and integration in 
economic fields namely with the EU. Then a common assessment is addressed to the approach 
followed by the two bodies and it is found that approach is quite similar, notwithstanding the 
differences of scope and context.
Ultimately a global assessment of the international investment law arbitration as a means to foster 
economic integration besides other instruments of international law.Programa de Doctorado en Derecho por la Universidad Carlos III de MadridPresidente: Fernandez Liesa, Carlos Ramon.- Secretario: Gamarra Chopo, Yolanda.- Vocal: Elena Carolina Díaz Galá

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State's Responsibility in ICSID Arbitration Practice

https://e-archivo.uc3m.es/bitstream/10016/37738/1/tesis_Marvin_Dertliu_2023.pdf

State's Responsibility in ICSID Arbitration Practice

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