CSID - international convention on the settlement of investment disputes was established with the Washington Convention, which entered into force on October 14, 1966, and it is a convention prepared by the World Bank and an arbitration center affiliated to the same group, operating with the aim of finding solutions through arbitration in international investment disputes.Recognized by 163 states, including 153 parties and 10 signatories as of 2018, ICSID has a strong volume of multilateralism.
In order for the investor to benefit from the institutional arbitration mechanism stipulated by ICSID, the host state must be a party to the convention, the state which the investor is subject has to be the party to convention and the dispute must be related to the investment.
Before the end of 2020, ICSID is working to find solutions to 68 new disputes by breaking the record of 59 cases in 2019.
It is seen that the new cases in 2020 are especially concentrated in the oil, natural gas and mining sector. In addition, it is seen that it is preferred as a solution authority in disputes arising from the construction, information and communication, finance, transportation, agriculture and fisheries, service sectors after electrical energy investments.
Due to the cosmopolitan nature of ICSID, arbitrators, conciliators and ad hoc committee members from 44 different nations have taken part.It is also possible to say that the diversity of nationality is insufficient in ensuring gender balance in the structuring where 86% of the appointed are men and 14% are women.The fact that the female majority, which was 24% in 2019, could not be achieved in 2020 appointments was not welcomed.
As is known, there are differences between investment arbitration and commercial arbitration.The first of these is at the point of the parties to the dispute.One party to the dispute in investment arbitration is always a state.The second is at the point of the subject of investment arbitration.The subject of investment arbitration is investment by a foreign investor in a state.The third difference is that in commercial arbitration, the parties need to include the arbitration record in their contract for consent to arbitration, whereas in investment arbitration, international agreements are the source.In the national legislation of some states, it is regulated that arbitration will be applied in investment disputes with foreign investors.
The ICSID Convention, which is the most important international resource in terms of investment arbitration, does not make a direct or clear definition of the investment, it has left the authority to parties and national regulations to define it.In addition, it is possible to say that it is an appropriate approach since defining the concept of "investment" that changes for each period will also require continuous revision.
Although the definition of investment is not provided in the ICSID Convention, the requirement that the dispute that will be subject to investment arbitration should be a legal dispute directly arising from the investment is clearly regulated in Article 25.(ICSID article 25)
When the bilateral investment agreements of the states are examined, it is seen that a similar approach is accepted, the general framework of the investment concept is drawn, but sampling is sufficient without deepening it.
In the most important evaluation criteria of the investment arbitration, which we call "Salini Criteria", in terms of "subject", it is emphasized that the investment should emerge as money or assets, the investment should continue for a certain period of time, the investment includes risk, and the the investment should contribute to economy of the host state.
We can exemplify the decisions of a foreign investor stating that the expenses incurred for a future investment cannot be considered within the scope of the investment (ICSID File number ARB/00/2), and that the purchase of the stocks or company shares of a domestic company cannot be subject to investment arbitration(ICSID file number ARB (AF) / 07/2).
In the PHOENIX case, which sets a precedent, the ICSID considered and sought the good faith in investment as an additional criterion in addition to the Salini Criteria.
Another important issue is that in case of having international citizenship, citizens of the host state will not benefit from international investment arbitration.
Nowadays, we often see companies trying to overcome the citizenship barrier by establishing shell companies in order to benefit from international investment arbitration.ICSID has decided that it is not necessary to look at the nationality of the company partners, but it is necessary to look at whether the legislation that the company is subject to is the host state's.
In the case of dual citizenship, it may also come to the fore when one of the countries of citizenship is not a party to ICSID.In the ICSID decisions regarding this situation, it has been accepted that regardless of which country of dual citizenship is more concentrated or superior, it is sufficient for any state to be a party to ICSID.
Considering that disputes and decisions regarding investment arbitration are in constant development, determining solutions and principles in line with the diversity of investments in the developing world will strengthen the understanding of justice and impartiality in the content of the decisions. It will also pave the way for the parties to remove the obstacle of abstaining and to increase the habit of making international investments in the global market.
ENFORCEMENT OF ICSID DECISIONS
As it is known, the ICSID Arbitration Rules cover the period from the sent of the notice of registration of an arbitration request until the decision is made.
ENFORCEMENT OF ICSID DECISIONS
Parties have the right to objection decisions made by ICSID within 120 days.The reasons for annulment are limited. These are as follows: the fact that the arbitral tribunal is not formed correctly, the arbitral tribunal has clearly exceeded its powers, corruption situation regarding the members of the arbitral tribunal, an important departure from the procedural rules, insufficiency of the grounds on which the decision is based.
The party applying for annulment also has the right to request a suspension of execution.ICSID decides for the suspension of execution of the decision in case of request for a suspension of execution along with the application for annulment action and then an arbitral tribunal is established.The other party has the right to objection against the suspension of execution decision.The arbitral tribunal formed takes the opinions of both parties and the trial process begins.
The final decision of the arbitral tribunal on the decision for suspension of execution is enforceable.
Continuation of the decision for suspension of execution may be subject to condition of the collateral deposit.
At the end of the annulment action, the arbitral tribunal may decide on the rejection of the annulment action, the partial annulment of the previous decision, the complete annulment of the previous decision or the determination of the error, but the rejection of the annulment request.
As clearly stated in the convention, ICSID decisions are legally binding and do not need to be enforced separately.
About the enforcement of ICSID decisions in Turkey, there is no legal precedent or national or specific legislation.
In terms of the implementation of the ICSID decisions, commercial courts in Turkey is authorized.