Environmental Engineering Reference
In-Depth Information
BITs, private investors were only able to fall back on diplomatic protection, which is
part of customary international law.
51
The main rules and prerequisites for diplo-
matic protection are laid down in the 2006 ILC Draft articles on Diplomatic
Protection (ILC Diplomatic Protection). The International Law Commission (ILC)
was founded in 1947 by the UN General Assembly. There is no obligation under
international law for the state to extend diplomatic protection to nationals.
52
Fur-
thermore, the utilization of diplomatic protection “transforms” a claim of an investor
into a claim of the state.
53
The utilization of diplomatic protection is difficult and
thus not desirable for investors as there is no guarantee that the home state will act.
54
This is also underlined by the fact that the home state of the investor does not have
any obligation (except a moral one) to pay reparation to the respective investor.
55
Furthermore, the ICJ pointed out that diplomatic protection will only be exercised
after all possible local solutions have been exhausted beforehand.
56
2.1.2.2.2 The ICSID as a New Tool of Investment Protection
The most recent development within international investment protection took place
in 1965. Within international investment law, the foundation of the ICSID provided
a new dispute settlement mechanism, where investors are able to directly litigate
against the host state.
57
The establishment of the ICSID was also due to the
increasing number of investment disputes and the need for an institutional arbitra-
tion.
58
Therewith the international customary law concerning international invest-
ment, dating back to the Hanse, was transferred into treaty based law, by stipulating
certain requirements within the ICSID Convention.
The ICSID is an autonomous international institution under the Convention on
the Settlement of Investment Disputes between States and Nationals of Other States
(ICSID Convention, also known as the Washington Convention).
59
The Executive
51
ICJ [2007] Case concerning Ahmadou Sadio Diallo, Preliminary Objections—General List
No. 103, 17 para 39; Muchlinski (
2009
), 341 (342-343); Vannieuwenhuyse (
2009
), 115 (118-
119); Dolzer and Schreuer (
2008
), 211.
52
Vannieuwenhuyse (
2009
), 115 (116); Muchlinski (
2009
), 341 (343).
53
Muchlinski (
2009
), 341 (343).
54
Tietje (
2005
), 47 (50); cf Dolzer and Schreuer (
2008
), 211; Tietje (
2003
), 5 (7-8); cf Metje
(
2008
), 167.
55
Muchlinski (
2009
), 341 (343).
56
ICJ [2007] Case concerning Ahmadou Sadio Diallo, Preliminary Objections—General List
No. 103, 18 para 44.
57
This also includes the exclusion of diplomatic protection, in: Vannieuwenhuyse (
2009
),
115 (119); Egonu (
2007
), 479 (480); ICSID as the main actor in international investment disputes,
in: Hauschka (
2005
), 1550 (1553).
58
Sch
obener and Markert (
2006
), 65 (67); Arbitration wave in Africa and Asia, in: Lowenfeld
(
2008
), 536.
59
ICSID (
2014
) About ICSID; cf L
€
€
orcher (
2005
), 11 (11).
