Q. Consider the following statements regarding International Centre for Settlement of Investment Disputes (ICSID):
1. It was set up in 1966 is an investment dispute settlement body whose decisions are binding on the parties.
2. India is not a member of ICSID.
Which of the statements given above is/are correct?

[A] 1 only

[B] 2 only

[C] Both 1 and 2

[D] Neither 1 nor 2

Answer: C
Notes:

The International Centre for Settlement of Investment Disputes (ICSID), set up in 1966 is an investment dispute settlement body whose decisions are binding on the parties.  

  • It was established under the 1966 Convention on the Settlement of Investment Disputes between States and Nationals of Other States.  
  • Though recourse to the centre is voluntary, but once the parties have agreed to arbitration, they cannot withdraw their consent unilaterally.  
  • It settles the investment disputes arising between the investing foreign companies and the host countries where the investments have been done.  
  • India is not its member (that is why the Enron issue was out of its preview).  
  • It is believed that being signatory to it encourages the foreign investment flows into an economy, but risks independent sovereign decisions, too. 

Source: Sriram’s IAS