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Ecuador: Withdrawal from International Arbitration Agency

(Oct. 8, 2009) Ecuador has withdrawn from the International Center for the Settlement of Disputes (ICSID), the international arbitration agency of the World Bank, terminating its membership of 23 years. Executive Decree 1823 of July 2, 2009, was signed by President Rafael Correa to end the commitment of Ecuador to recognize the jurisdiction of the ICSID to resolve international investment-related claims involving Ecuador.

The government maintained that the membership in the ICSID violated the Ecuadoran Constitution, which provides that the government may not enter into international instruments or treaties in which the Ecuadoran state yields its sovereign jurisdiction for international arbitration purposes, in contractual or commercial controversies between the state and natural or legal entities. (Art. 422, Constitution of 2008, POLITICAL DATABASE OF THE AMERICAS,
(last visited Oct. 5, 2009).)

Ecuador currently has ongoing claims for about US$13 billion, an amount exceeding its total foreign debt, mostly from foreign oil companies claiming breach of contract issues. Decree 1823 does not affect these ongoing claims before the international arbitration body, but prevents future ones. (Ecuador oficializó el retiro del Ciadi ayer, DIARIO EL COMERCIO, July 7, 2009, available at