The Desertec Concept and the ICSID Convention - Investing into North African Solar Power - page 169

3.5.2.1.1 Consent

Since consent is the requirement for any ICSID arbitration, it is important to clarify
its scope. To have rights or obligations according to the ICSID convention, both
parties must consent to the proceeding. 281 Consent relates to the respective dis-
pute. 282 Ratification of the ICSID Convention does not automatically lead to
acceptance ICSID arbitration. 283 However, it is a well-known practice that a state
gives consent by accepting ICSID jurisdiction in a BIT. 284 In this case, it depends
on whether the consent of the state is conditional or not. 285 Parties have great
freedom to express their consent to ICSID application (e.g. direct agreement within
an investment agreement). 286 There are several ways to reach consent between the
parties. 287 Consent through BIT is known as

, which
does not replace a consent in writing by both parties. 288 In addition, No. 24 of the
1965 Report of the Executive Directors of the International Bank for Reconstruc-
tion and Development on the Convention on the Settlement of Investment Disputes
between States and Nationals of Other States (Report of Executive Directors) also
points out that the consent must rise out of an agreement or in a compromis , but the
expression must not be within a single instrument. In practice, the request for
initiation of proceedings by the investor is frequently the acceptance of

arbitration without privity

' '

the offer

' '

s consent. 289 Thus, the state cannot bring arbitration against
the investor itself. 290 There have been cases of the host state suing the investor
according to the ICSID Convention. 291 In a rare case, a company which was wholly
owned by the state sued the investor, who was a part of a joint venture. 292
The acceptance of the investor is limited to the scope of the offer by the
contracting state. 293 Both parties must consent to the ICSID jurisdiction, which
means that two states cannot enforce ICSID jurisdiction on their nationals by

and hence the investor

'

281 Reed et al. ( 2004 ), 21; Egonu ( 2007 ), 479 (481); Dolzer and Schreuer ( 2008 ), 238; Hobe and
M ¨ ller ( 2009 ), 65 (67); Schreuer ( 2010 ), 353 (357); Loncle ( 2005 ), 3 (5).
282 Harten ( 2007 ), 67-68.
283 Moses ( 2008 ), 222; Hobe and M ¨ ller ( 2009 ), 65 (67); Lorcher ( 2005 ), 11 (13-14).
284 ICSID [2009] ARB/07/9, 25-26 para 65 and 27 para 73.
285

ICSID [2009] ARB/07/9, 26 para 68.

286

Schreuer ( 2010 ), 353 (357); cf Loncle ( 2005 ), 3 (4-5); Reed et al. ( 2004 ), 22; Herdegen ( 2003 ),
13 (32-33).
287

Tietje ( 2003 ), 5 (10).

288

Reed et al. ( 2004 ), 22; However the agreement is achieved indirectly, without direct contact
between the parties, in: Schreuer ( 2010 ), 353 (357) ; Loncle ( 2005 ), 3 (5); Harten ( 2007 ), 63.
289 Hobe and M¨ ller ( 2009 ), 65 (68).
290 Loncle ( 2005 ), 3 (5).
291 Schreuer ( 2010 ), 353 (360).
292 ICSID [2001] ARB/98/8—Award, 1 paras 1-2.
293 Schreuer ( 2010 ), 353 (358).