Consent: Overcoming a Jurisdictional Obstacle For arbitration under ICSID Convention Arbitration
The ability of an adjudicatory body, such as a court or tribunal, to accept, hear, determine, and issue orders in respect to claims is known as jurisdiction. A tribunal only has jurisdiction in investment arbitration proceedings if both parties agree to submit their disputes to arbitration. Arbitration must be agreed to in writing. This proves without a shadow of a doubt that the parties meant to contract out of the jurisdiction of the national courts.
Under Article 102 of the United Nations Charter, the ICSID Convention is a treaty or international agreement that has been registered with the United Nations secretariat. The Executive Directors of the International Bank for Reconstruction and Development—the IBRD or the World Bank—drafted the document, with the latter term being the institution's official moniker.
The International Centre for Settlement of Investment Disputes (ICSID) was created to provide mediation and arbitration services for international investors and host country governments involved in investment disputes. It was created to provide a neutral venue for the resolution of investment disputes, to foster a climate of mutual trust, and, as a result, to generate a greater flow of private international capital with those countries which wish to attract. The ICSID was born out of the realities of global commerce, which necessitates state collaboration. Also, in a neutral platform, there is a need to protect investors and host countries.
It is important to note that the tribunal's jurisdiction in investment treaty arbitration is primarily based on the parties' consent.
The ICSID Convention's Condition of Consent
The parties must have agreed in writing to submit the matter to the Centre for it to fall under its jurisdiction. This is consistent with any kind of arbitration in which the parties agree to arbitrate. As a result, the host state's and investor's assent to arbitration is a must for the arbitral tribunal's jurisdiction to exist.
In the final phrase of Article 25 (1) of the ICSID Convention, an essential concept respecting parties' consent is spelled forth. This is the clause that states that once both parties agree to the ICSID's jurisdiction; neither party can unilaterally withdraw their consent.
Until now, the Centre's jurisdiction has been considered when it is invoked, that is when the investor's Request for Arbitration is registered with the Centre. Furthermore, as stated explicitly in Article 25 (1) of the ICSID Convention, no party may unilaterally withdraw its consent after jurisdiction has solidified.
The establishment of written consent, as envisaged within the scope of Article 25, is critical to the effective invocation of ICSID's jurisdiction, as this article has established. The ICSID Convention requires the formation of consent to start an arbitration proceeding. To use the ICSID platform to settle disputes, parties must overcome a jurisdictional obstacle.
(This Article Does Not Intend To Hurt The Sentiments Of Any Individual Community, Sect, or Religion, Etcetera. This Article Is Based Purely On The Authors Personal Views And Opinions In The Exercise Of The Fundamental Right Guaranteed Under Article 19(1)(A) And Other Related Laws Being Force In India, For The Time Being. Further, despite all efforts made to ensure the accuracy and correctness of the information published, White Code VIA Mediation and Arbitration Centre Foundation shall not be responsible for any errors caused due to human error or otherwise.)