Abstract:

Encouragement of foreign investments plays a prominent role for economic development in developing countries. Therefore paving the way for foreign investments in legal aspect by governments is a necessity. In this field, generally international regulations affect internal codifications. In the subject case of this study, Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID) which is crucial in terms of international investment law became applicable. For investor to take advantage of the arbitration procedure in the framework of the Convention is subjected to certain conditions in terms of Center’s jurisdiction. In the case at hand, applying fraudulent transactions Claimant made an effort to provide international jurisdiction and took advantage of ‘détournement de procedure’. And as a result, whether this situation ruined the Government’s reputation, and whether a moral compensation should be sentenced came into question.

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