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ICSID Arbitration

Who is eligible to file an ICSID claim?

Only foreign investors who are nationals of an ICSID Convention member state can file a claim against another member state. You must prove you have a qualifying "investment" in the host country, as defined by the relevant treaty and the ICSID Convention.

What rights does a Bilateral Investment Treaty (BIT) protect?

BITs typically guarantee protection against expropriation without compensation, fair and equitable treatment (FET), full protection and security, and the free transfer of funds. Violation of these standards by the state is grounds for arbitration.

How long does an ICSID arbitration take?

These are complex proceedings often lasting 3 to 5 years. The timeline involves jurisdictional objections, written pleadings, document production, hearings, and the tribunal's deliberation. We manage the entire lifecycle efficiently.

Can an ICSID award be appealed?

ICSID awards cannot be appealed in national courts. However, a party may request an internal "annulment" procedure by an ad hoc committee on limited grounds, such as corruption or a serious departure from a fundamental rule of procedure.

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The International Centre for Settlement of Investment Disputes (ICSID) is part of the World Bank Group and stands as the leading global institution for resolving disputes between foreign investors and states. ICSID arbitration is a unique legal mechanism that allows a private investor to directly sue a sovereign state in an international tribunal if the latter violates investment protection guarantees. For Georgia, as a developing economy actively attracting foreign investment, the ICSID mechanism is critically important. This service is designed for both foreign investors operating in Georgia who believe their rights have been violated, and Georgian investors with business interests abroad.

ICSID arbitration differs radically from commercial arbitration. Here, the legal basis is often not a contract, but an international treaty (Bilateral Investment Treaty - BIT) or a multilateral convention (e.g., the Energy Charter Treaty). The process requires deep knowledge of public international law, understanding of sovereign immunity issues, and analysis of complex expropriation standards. Specialists featured on Legal.ge are highly qualified lawyers capable of managing these extremely complex and high-stakes disputes.

What does the ICSID Arbitration service cover?

  • Jurisdictional Analysis: Assessing whether a specific dispute falls under ICSID jurisdiction (whether there is an "investment" and "investor" within the meaning of the Convention).
  • Analysis of BITs and Treaties: Studying Bilateral Investment Treaties concluded by Georgia to identify violated rights (e.g., fair and equitable treatment).
  • Notice of Dispute: Managing the mandatory "cooling-off period" and conducting pre-arbitration negotiations with the state.
  • Registration of Request for Arbitration: Submitting the application to the ICSID Secretary-General and navigating the registration process.
  • Representation in Proceedings: Preparing memorials (written arguments), coordinating expert testimony, and defending interests at hearings in Washington or Paris.
  • Enforcement of Award: Utilizing specific mechanisms of the ICSID Convention to actually receive the awarded compensation.

Common scenarios requiring this service

A typical scenario is so-called "indirect expropriation," where the state adopts regulations or revokes licenses that render the investor's business futile. For example, if a foreign company built a factory, but the state subsequently created discriminatory tax conditions or illegally revoked an environmental permit. Another scenario is the violation of the "fair and equitable treatment" principle, where the state breaches legitimate promises made to the investor. ICSID is also used in the energy sector to seek compensation for damages caused by tariff changes.

Georgian Legal Framework

Georgia has been a member of the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID Convention) since 1992. This means Georgia has undertaken an international obligation to recognize and enforce ICSID awards as if they were final judgments of its own highest court. Additionally, Georgia has concluded dozens of Bilateral Investment Treaties (BITs) that directly refer to ICSID as the dispute resolution mechanism. Georgian legislation, including the Law on Promotion and Guarantees of Investment Activity, also protects investors, but ICSID offers a higher, supranational level of protection.

Step-by-step service process

The process begins with an in-depth analysis of the potential violation. The first formal step is sending a "Notice of Dispute" to the government, followed by a mandatory negotiation period (usually 3-6 months). If no agreement is reached, the investor registers a request with ICSID. Then comes the tribunal formation (often complex due to conflicts of interest). The process involves a written phase (Memorials/Counter-Memorials) and an oral hearing. ICSID proceedings are lengthy, averaging 3-4 years.

Why choose a specialist on Legal.ge?

ICSID arbitration is the elite and most complex area of legal services. An incorrectly initiated dispute can cost an investor millions of dollars in fees. Legal.ge gives you access to those rare specialists who have specific experience in public international law and investment arbitration. They will help you correctly assess the prospects of the dispute and select the best strategy against the state apparatus.

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Specialists for this service

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