Definition of “Investment”—A Voice from the Eye of the Storm

Abstract

This article traces the development of the definition of “investment” under Article 25(1) of the ICSID Convention. It proposes that the definition should act as an outer limit to the usually broad definition of investment (encompassing every kind of asset) in international investment agreements (IIAs). The article discusses the various characteristics (hallmarks) of an investment which should constitute the definition. It argues that the hallmark of “significant contribution to economic development” can be refined to reduce uncertainty while giving effect to the intent of the ICSID contracting states by drawing a distinction between an ordinary commercial transaction and an investment. Recent IIA definitions of investment adopting Salini hallmarks show that states adopt the “every kind of asset” definition of investment in IIAs out of a concern that the form which the investment may take should not be restricted and that states do not necessarily view the Salini hallmarks as unwelcome.