The Practice of International Litigation - 2nd Edition - Looseleaf
The Practice of International Litigation - 2nd Edition - Electronic
Dispute Resolution Opportunities for Foreign Investors
Lawrence W. Newman and Michael Burrows
Governments of many developed as well as developing countries,
apparently aware of the potential benefits as well as the risks of international
investment, have entered into numerous bilateral and multilateral investment
treaties to encourage foreign investment. Many of these treaties contain
provisions permitting investors to seek relief through arbitration for actions
taken against them by their host countries. Although the first of such
treaties came into existence decades ago, it is only in recent years that
aggrieved investors have with any frequency taken advantage of their rights
thereunder. Investors under such treaties benefit from expansive
definitions of what constitutes an investment and what constitutes a
violation of customary international law. It is therefore worthwhile, when
faced with a dispute involving international investment, for counsel to
examine whether any such treaty applies.
In 1966, as a direct result of World Bank diplomacy, the International
Convention for the Settlement of Investment Disputes (the “Washington
Convention”) gave rise to the International Centre for the Settlement of
Investment Disputes (“ICSID”), the first system under which non-state
entities – corporations and individuals – could sue states directly, provided
that both the national state of the investor and the state party to the case
were parties to the Convention. An “Additional Facility” was added to the
Convention in 1978 whereby the main elements of the Convention system
were made available even if only one party met this requirement, provided
both had given their consent.
Because ICSID rules and procedures are also used for the arbitration
of disputes pursuant to other bilateral and multilateral international
investment agreements other than the Washington Convention, the vast
majority of international investment-related disputes have been adjudicated
under ICSID auspices.
Lawrence W. Newman has been a partner in the New York office of Baker & McKenzie since 1971, when, together with the late Professor Henry deVries, he founded the litigation department in that office. He is the author/editor of 4 works on international litigation/arbitration.
Michael Burrows, Formerly, Of Counsel, Baker & McKenzie, New York.