The Concept of Investment in ICSID Arbitration

Abstract

Abstract This book examines the meaning of the concept of investment in International Centre for Settlement of Investment Disputes (ICSID) arbitration. It provides a comprehensive and detailed examination of the various legal issues arising in connection with the jurisdictional requirement of the existence of an investment. It explores, first of all, the fundamental question of whether the term ‘investment’ in Art 25 ICSID Convention — despite not being defined — nevertheless has some ‘objective’ or ‘independent’ meaning. Second, it discusses the substance of that ‘objective’ meaning, showing that three primary approaches (the prevailing Salini test, the permissibility test, and the commercial-transaction test) co-exist in arbitral practice. Third, this book analyses investment treaty definitions of ‘investment’. It discusses the traditional definitional model, typical requirements (ownership or control by the investor, territoriality, legality, and the controversial requirement of an ‘active’ investment), as well as recent developments in treaty and related arbitral practice. Fourth, it provides an overview of definitions contained in domestic investment laws, highlighting commonalities with, and differences from, definitions found in investment treaties. Finally, it examines the investment status of several specific categories of assets and operations. This book offers not only a detailed analysis of the relevant case law, legislation, and scholarship, but also a critical assessment of existing practices and trends, as well as normative recommendations. Despite its formal focus on ICSID arbitration, significant portions of this book are also relevant in the context of other forms of investor-state arbitration proceedings.