The Counter-productivity of ICSID Denunciation and Proposals for Change

Bolivia and Ecuador have denounced the Convention on the Settlement of Investment Disputes between States and Nationals of Other States ("ICSID Convention") purportedly because they believe the International Centre for Settlement of Investment Disputes ("ICSID") favors investors. This has triggered speculation that other states will follow suit, which could ultimately result in the collapse of the current international investment system. This thesis argues that denunciation will not change the current international investment regime because most states' bilateral investment treaties ("BITs") provide for alternative investor-state arbitration mechanisms. These non-ICSID alternatives can actually be more disadvantageous to states than ICSID arbitration. Thus, the denunciation of ICSID is counterproductive. BITs, rather than ICSID, are the source of the extensive investment protections that form the basis of developing countries' objections to investor-state arbitration. Therefore, changing the current international investment regime would require the amendment of BITs