Salini Criteria: A Strict-Deductive Approach Against the Principles of Article 25 ICSID

Abstract

This research paper is written by the author for the want of strict definition of the term ‘investment(s)’ in the ICID Convention. Article 25 of the Convention nowhere defines investment and therefore, the legislative drafter of the Convention deemed it fit to leave such interpretation on the arbitral jurisprudence of the ad-hoc tribunals so constituted on case to case basis. As investments are not defined in the Convention, however such definitions are clearly worded and expressly found within the BITs and other investment contracts. The parties to the BITs i.e. two sovereign States enter into consultation and negotiation to strictly define the term investment which governs their relations and even the disputes arising thereafter. The law of the BITs is framed by the parties keeping in mind the realms of ‘Public International law’ as well as the ‘Private International law’. It is for this reason that the legislative drafters of the ICID convention knowingly left from defining ‘What are Investment(s).’ One can even argue and has been argued by numerous parties before a tribunal and also through the jurisprudence of the arbitrators that back in the year 1965 when the ICID Convention was formulated, the law makers recommended that defining the term investment under the Convention would restrict and limit the authority of the parties to bring forth their disputes which are concerning Investment per se. The executive working committee report of the ICID Convention also recommended that by intentionally leaving behind from defining the term Investment would justify the role of globalisation within the transnational continents and would lead to better and free movement of investments amongst the contracting parties. Therefore, the author sides with the view of the executive working committee of the ICID Convention from not defining Investments then, however, the author on the other hand also considers it necessary from defining Investments now, within the ICID Convention. Lastly, as there is no rule of stare decisis in international arbitration, the development of jurisprudence of international arbitration is left upon the tribunals formed on case to case basis, this not only leads to lack of uniformity and coherent judgement making by the tribunal, but also creates some serious doubts on the processes legitimacy and credibility. The definition of Investments within Article 25 of the ICID Convention is the need of the hour.