Soumya Cheedi writes on denunciation of Latin American nations from ICSID Convention.
Abstract
Starting with Bolivia in 2007, most of the countries in Latin America have proceeded to denounce the ICSID Convention and withdraw from the membership of the ICSID. This has led to questions as to whether the ICSID is being delegitimized. The question of the greater consequences of these denunciations is something that will only be answered by time. Meanwhile anyone wishing to understand these developments must also pay heed to the various political forces and factors involved at play, both in Latin America, and ICSID.
This paper analyses the various reasons cited by Latin American nations before, during and after the course of their withdrawals and denunciations. It places those reasons in the context of the political and ideological conditions of those countries as well as within the larger framework of investment arbitration. This paper defends the ICSID system, on the primary basis that these denunciations are not about the problems with the ICSID system as much as they are about how these countries have fared before it in disputes.
However, this paper also acknowledged that there is scope for reform and improvement in the ICSID system. As such, it suggests reforms in the form of an appellate mechanism, and provides reasons for why this is the most important reform that the ICSID can undertake, and how it would prove useful not only for ICSID, but also for the investment arbitration regime as a whole.