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Home > Country profiles > International Centre for Settlement of Investment Disputes > Articles > Article detail



ICSID Arbitration: A Tool To Secure International Investments

Tuesday, 15th July 2015

&quot;We are all witnessing world&#39;s shrinking with the technological developments, as the time passes, fast and secured transportation of goods or energy lead investors to conduct commercial activities among various countries. While merchandising, international investors are handling with investing countries&#39; regulations and proceedings and facing various of potential risks such as investment may be unlawfully expropriate or nationalize by host country, there might be currency transfer restrictions in the host states or the treatment of investment will be changed after the establishment of investment. And indeed, the host country may treat riskily national investor more favorable than foreign investor. Based on the observations, foreign companies investing in Turkey share these types of righteous concerns.<p style="line-height: 1.5; color: #333333; font-family: Arial, HelveticaNeue, Calibri, Tahoma, Helvetica, Verdana; font-size: 13px">As a result of these risks, an autonomous and free arbitration and conciliation institution is established particularly focuses on international investment disputes, which is called:&quot;International Centre for the Settlement of Investment Disputes (ICSID).&quot;</p><p style="line-height: 1.5; color: #333333; font-family: Arial, HelveticaNeue, Calibri, Tahoma, Helvetica, Verdana; font-size: 13px">Generally speaking, ICSID is an international institution, which provides facilities for eligible parties&#39; conciliation and arbitration in order to solve legal disputes. Recourse to ICSID conciliation and arbitration is entirely voluntary. However, once the parties have consented to arbitration under the ICSID Convention, neither can unilaterally withdraw its consent. All of ICSID Contracting States (whether or not to be parties to the dispute) are required by the Convention to recognize and enforce ICSID arbitral awards.</p><p style="line-height: 1.5; color: #333333; font-family: Arial, HelveticaNeue, Calibri, Tahoma, Helvetica, Verdana; font-size: 13px">ICSID&#39;s main purpose is to contribute international investments through the creation of a favorable investment climate. To fulfill this aim, the ICSID Convention grants some benefits both contracting states and foreign investors. The most essential benefit for investors is the provision of an independent and autonomous forum when a dispute arises. Thus Arbitration Tribunals&#39; approach to investment treaties is to be required a fair and equitable treatment by Host States, likely according the tribunals decision: &quot;This (fair and equitable treatment) provision of the Agreement (BIT), in the light of the demands of good faith required by international law, requires the Contracting Parties to the Agreement to accord a treatment to foreign investment that does not go against the basic expectations on the basis of which the foreign investor decided to make the investment.&quot; Going to arbitration is very important for legal security and to be judged equally and fairly. While States intend to resolve their disputes in ICSID cause many foreign investors to demand investing to host state country due to their beliefs of legal security. As a result of this, states inevitably take a benefit from international arbitration.&quot;</p><p style="line-height: 1.5; color: #333333; font-family: Arial, HelveticaNeue, Calibri, Tahoma, Helvetica, Verdana; font-size: 13px">Read further:&nbsp;</p>


Web-link: http://www.mondaq.com/article.asp?articleid=411866&email_access=on
Source: Herdem Attorneys at Law
Language: English


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