The idea for the International Convention on the Settlement of Investment Disputes (“the Convention”) was first conceived in 1961 by Aron Broches, then the General Counsel of the World Bank. This initiative carried forward a more general one for the protection of international investment that had begun in the Organisation for European Economic Co-operation (now the Organisation for Economic Co-operation and Development) in the late 1950s and that ended in the production in 1962 of the OECD Draft Convention on the Protection of Foreign Property. The idea prevailed that in the then divided state of opinion the best way to provide satisfactory legal infrastructure for the promotion of international private investment flows would be by providing effective procedures for impartial settlement of disputes rather than by seeking multilateral agreement on the establishment of general substantive standards.

The negotiating procedure initiated by Mr Broches was a novel one aimed at the avoidance of direct confrontation between opposing views in a large-scale international conference. Instead, he submitted the evolving text to a series of regional conferences in Africa, the Americas, Asia and Europe, inviting comments and proposals, but retaining in his own hands the preparation of a final text for submission to the Executive Directors of the Bank.

In 1965 the Convention was opened for signature and ratification. The 20 ratifications required for its entry into force were rapidly achieved and the Convention became operational on 14 October 1966. It soon secured broad support from States in all parts of the world including States newly emerging into independence.