Arbitration that Barely Was:

Investor-State Dispute Settlement in the OIC Investment Treaty

Julia Sochacka

 

ABSTRACT: Despite a promising start, The Organization of Islamic Cooperation's investment agreement had been forgotten for decades, until unexpectedly resurrected in 2011 by a Saudi Arabian investor in a case against Indonesia. One of the latest awards, however, halted further developments in that field. It is argued in this paper that such was the case since the language of the arbitration clause, along with the case-law stemming from different adjudicating bodies, has significantly impaired the treaty's capacity to function as a robust tool for investor protection. Although ICSID-based proceedings seem now unlikely, the possibility of ad hoc solutions and potential reforms in the OIC investment regime, including the arbitration clause, may shape its future. The potential establishment of the OIC Arbitration Centre also adds a hopeful dimension, even though its development scope is uncertain. Nonetheless, with the status quo the relevance of OIC’s ISDS teeters on the edge of collapse.