Good Faith - An ICSID Convention Requirement?
The International Convention for the Settlement of Investment Disputes (“ICSID”) or the “Washington Convention of 1965” was implemented by the World Bank to facilitate global investment. It provides for the settlement of investment disputes by establishing an autonomous system of conciliation and arbitration between foreign private investors and host states administered by ICSID. This paper investigates whether good faith plays a role in the resolution of investment disputes between states and investors. The issue is complicated as in effect three contracts are at play. To start with there is the contract between the investor and the state. This is supported by a Free Trade Agreement (FTA) or a Bi-lateral Investment Treaty (BIT)which in most cases provides the impetus and the basic rules of the investment being the second contract. Importantly FTA’s or BIT’s can also contain a method of dispute resolution. Thirdly, in general any disputes between a state and an investor are submitted to ICSID for a resolution.
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