logo logo

Argentina: Towards a possible new withdrawal from ICSID?

2 May 2012


Nicolas Boeglin ( * )

In order to resolve any disputes that may arise between States and foreign investors, was established in 1965 under the World Bank, the International Centre for Settlement of Investment Disputes between foreign investor and State (ICSID) with the adoption of the Washington Convention of 1965, establishing an arbitration mechanism for resolving such disputes under the auspices of the World Bank.


Contrary to some opinions defending the fact that ICSID mechanism has been accepted in the majority American hemisphere, many of States of the region continue to be distant from ICSID: Canada, Cuba, México and Dominican Republic are not party to the ICSID Convention. In the case of Mexico, this attitude is rated by specialists among “wise and rebellious” (Note 1). We have also to recall that following Caribbean States remain outside the ICSID jurisdiction: Antigua and Barbuda, Belize, Dominica (Commonwealth of) and Suriname. In South America, Brazil has not ratified (or even signed) the ICSID convention and no special interest seem to do so has been showed by the now 6th most powerful world economy.

The case of Costa Rica access to ICSID system is extremely interesting: Costa Rica signed ICSID Convention on September 29, 1981 but only ratified it only 12 years after, on April 27, 1993. We read in a memorandum of GCAB (Global Committee of Argentina Bondholders) that Costa Rica`s decision resulted from direct United States pressure due to Santa Elena expropiation case, which was decided in the year 2000 (Note 2): "In the 1990s, following the expropriation of property owned alleged by an American investor, Costa Rica refused to submit to ICSID arbitration. The American investor invoked the Helms Amendment and delayed a $ 175 million loan from the Inter-American Development Bank to Costa Rica. Costa Rica consented to the ICSID Proceeding, and the American investor ultimately Recovered U.S. $ 16 million” (Note 3)


Like any international treaty, the Washington Convention of 1965 is subject to denunciation by any State Party if it considers that no longer corresponds to its interests to be part of it. In accordance with Article 71 of the ICSID Convention, the denunciation shall take effect six months after receipt of notification.

Bolivia was the first state to withdraw ICSID Convention (denunciation notified in May 2007 and effective November 2007), followed by Ecuador (denunciation notified in July 2009, effective January 2010). Venezuela officially announced its withdrawal last January 24, 2012, that will be effective July 2012 (Note 4). Possibly other States such as Argentina (State that collects 24 case before ICSID of the 146 pending ICSID cases to date) will also inclined to this option in the future. A bill dated March 21, 2012 that circulates in the Congress of Argentina as well put it very succinctly (Note 5). As long as States, like Argentina and many others States, accumulate a large amount of cases against them or obtain sistematically wrong results before ICSID arbitrators — which is the rule, with a very few exceptions — it is possible that this list of ICSID withdrawals will increase in the Americas. This possible option could interest in the very next future countries in which the Executive Branch, in a poor transparent manner and without any kind of public consultation, has signed sided concession contracts (including clauses that are clearly abusive): this unilateral act would allow them to minimize the effect of possible future demands of foreign investors.


It has to be mentioned that for the moment, the aforementioned Latin American States are the unique in the world having decided to withdraw ICSID Convention. This same region was the only one in the 60 and 70 that strongly opposed to the creation of ​​that very peculiar body under the World Bank. We must recall that the first draft prepared of the future ICSID Convention in 1963 had been approved by the Board of Governors of the World Bank on September 10, 1964, at the annual meeting of the World Bank in Tokyo. However, at that time, the following Latin American countries (besides Iraq and the Philippines) voted against it, in what is known in specialized literature as the "Tokyo No": Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Republic Dominican Republic, Ecuador, El Salvador, Guatemala, Haiti, Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru, Uruguay and Venezuela (Note 6).

(*) Nicolas Boeglin is currently Professor of Public International Law, at the Law Faculty of the University of Costa Rica (UCR). Contact: nboeglin(a)

Note 1: see GONZALEZ DE COSSIO F., “México ante el arbitraje CIADI:¿prudente o rebelde”, Universidad Autónoma de México (UNAM). Availabe at:

Note 2: The expropriation with the creation of the Santa Rosa National Park in 1978 gave rise to a claim by the Development Company of Santa Elena SA 6,400,000 U.S. dollars to Costa Rica, the State offering an amount of 1,900.000 U.S. dollars, considering that the property had been acquired in 1970 by that company at a price of 395,000 U.S. dollars. In the absence of agreement, and after the ratification of Costa Rica in 1993 of ICSID Convention, the company claimed the May 31, 1995 to Costa Rica to pay 41 million U.S. dollars, and ICSID arbitration decided to order Costa Rica compensation payment of 16 million U.S. dollars. See text of the decision of july 17th, 2000 of ICSID tribunal at:

Note 3: See Global Committee of Argentina Bondholders, Memorandum of February 2005 “GCAB Releases Legal Memorandum Summarizing Recent Argentine Legislation and Bondholder Remedies”. Available at:

Note 4: See note of El Universal (Venezuela) of January 25, 2012, including the official statement made by Venezuela to ICSID, available at:

Note 5: Bill of Argentina Congress dates April 21, 2012. Tex of the draft of that bill available at:

Note 6 : See ICSID, History of the ICSID Convention. Documents Concerning the Origin and the Formulation of the Convention on the Settlement of Investment Disputes between States and Nationals of Other States, Washington, D. C., ICSID, vol. II-1, pp.606-608.