9. In submitting the attached Convention to governments, the Executive
Directors are prompted by the desire to strengthen the partnership between
countries in the cause of economic development. The creation of an institution
designed to facilitate the settlement of disputes between States and foreign
investors can be a major step toward promoting an atmosphere of mutual
confidence and thus stimulating a larger flow of private international
capital into those countries which wish to attract it.
10. The Executive Directors recognize that investment disputes are as
a rule settled through administrative, judicial or arbitral procedures
available under the laws of the country in which the investment concerned
is made. However, experience shows that disputes may arise which the parties
wish to settle by other methods; and investment agreements entered into
in recent years show that both States and investors frequently consider
that it is in their mutual interest to agree to resort to international
methods of settlement.
The present Convention would offer international methods of settlement
designed to take account of the special characteristics of the disputes
covered, as well as of the parties to whom it would apply. It would provide
facilities for conciliation and arbitration by specially qualified persons
of independent judgment carried out according to rules known and accepted
in advance by the parties concerned. In particular, it would ensure that
once a government or investor had given consent to conciliation or arbitration
under the auspices of the Centre, such consent could not be unilaterally
The Executive Directors believe that private capital will continue to
flow to countries offering a favorable climate for attractive and sound
investments, even if such countries did not become parties to the Convention
or, having joined, did not make use of the facilities of the Centre. On
the other hand, adherence to the Convention by a country would provide
additional inducement and stimulate a larger flow of private international
investment into its territories, which is the primary purpose of the Convention.
13. While the broad objective of the Convention is to encourage a larger
flow of private international investment, the provisions of the Convention
maintain a careful balance between the interests of investors and those
of host States. Moreover, the Convention permits the institution of proceedings
by host States as well as by investors and the Executive Directors have
constantly had in mind that the provisions of the Convention should be
equally adapted to the requirements of both cases.
14. The provisions of the attached Convention are for the most part self-explanatory.
Brief comment on a few principal features may, however, be useful to member
governments in their consideration of the Convention.