Twelve years after it denounced the agreement, Ecuador has again ratified the ICSID Convention. The agreement came back into force on September 3, following the deposit of the instrument of ratification with the World Bank on August 21.
In 2009, during the administration of the former president Rafael Correa, Ecuador both withdrew from the convention and terminated BITs to which it was a signatory. Correa argued that the agreement violated Article 422 of the Ecuadorian constitution, which prohibits “international treaties in which the State cedes sovereign jurisdiction to international arbitration bodies.” The former president also claimed that the Convention led Ecuador to face millions of dollars in cases in international arbitration.
The decision to rejoin the ICSID Convention has also been upheld by Ecuador’s Constitutional Court. However, observers note that the Court must still render a judgement on Article 422 before the country can sign new IIAs and fully reintegrate into the investment protection regime.
Rejoining the ICSID Convention was part of the measures to attract foreign investment put in place by president Guillermo Lasso, who took office last May.