Sunday, July 8, 2007

Bolivia's Denunciation of the ICSID Convention

It is old news by now, but still worth noting: On May 2, Bolivia notified the International Centre for Settlement of Investment Disputes (ICSID) that it was denouncing the ICSID Convention. In accordance with Article 71 of the Convention, Bolivia's denunciation becomes effective six months subsequent to written notification. Article 72 of the Convention states that denunciation "shall not affect the rights or obligations under this Convention of that State or of any of its constituent subdivisions or agencies or of any national of that State arising out of consent to the jurisdiction of the Centre given by one of them before such notice was received by the depositary." Certainly, then, any arbitrations that have already been initiated will be unaffected. (There is some question as to the viability of arbitrations commenced during the six-month period.) Bolivia's withdrawal will not effect future BIT-based arbitrations, so long as they provide for the use of other institutions or rules, such as the UNCITRAL Rules or even ICSID's Additional Facility Rules. Nicaragua and Venezuela have also threatened to withdraw from the Convention. (Venezuela's President Chavez has said that Venezuela plans to withdraw from the IMF and the World Bank, as well.) Ecuador has indicated it may withdraw from its BIT with the United States, and Bolivia is said to be reviewing all its BITs.