This thesis will analyze one of the ways in which disputes arising from developed countries' investment activities in the developing countries are decided. The issues of investment and disputes are of great importance to the developed countries as well as to developing countries. The scope of the issues gives rise to a multitude of questions of national and international law in an interdependent world economy. International investment attracts the close attention of international law because it brings the movement of people and financial resources from one country to another and such movement gives rise to a potential risk for conflict between the countries. Whereas disputes arising from trade and financial transactions are mainly settled by means of domestic courts, the tools of international law are often required in case of foreign investment disputes.' The International Centre for Settlement of Investment Disputes (ICSID or the Centre) created by the Convention on the Settlement of Investment Disputes between States and Nationals of other States has unique dispute settlement mechanism. The jurisdiction of the Convention is limited to disputes between the Contracting States and nationals of other Contracting States. Therefore, the increasing number of the States that have ratified the Convention expand this limitation of the ICSID' s jurisdiction and clearly contribute to the growth of ICSID as an investment disputes settlement institution. The jurisdiction of the Convention is also limited by the consent of the parties to submit a dispute to ICSID conciliation and arbitration and the subject matter of a dispute. The experience of ICSID in the settlement of disputes involving the issues of the jurisdiction of the Convention is a particularly important part of this thesis.