Economic Development in the Establishment of International Centre for Settlement of Investment Dispute

Abstract

The development of today's economy demands a favourable legal mechanism, one that is able to facilitate all matters in its development. In relation to economic cooperation between countries, especially in the field of investment to help developing countries, a suitable legal mechanism is required to settle disputes. For this reason, the World Bank established a special institution that handles foreign investment disputes, known as ICSID (the International Centre for Settlement of Investment Disputes) through its convention. However, a problem that arises from the convention is the refusal of ICSID jurisdiction due to certain issues, such as a vacuum of law. To resolve this issue, attention must be returned to the foundation of the convention, which aims to create ‘Economic Development’ for states. The concept of Economic Development has a profound impact to the contents of the convention and to the standing of ICSID itself. The writer would like to clarify the link between the concept of Economic Development to the practice of the application of the Convention regarding ICSID jurisdiction.