What Limits Are There on the Notion of an ‘Investment’ for the Purpose of the Jurisdictional Requirements of the ICSID Convention and BITs?

Abstract

The notion of ‘investment’ for the purpose of jurisdictional requirements of the ICSID Convention and the BITs is a contentious issue in international investment arbitration. The identification of ‘investment’ or what constitutes an ‘investment’ has a vital meaning for jurisdiction of arbitral tribunals. It is an answer ‘yes’ or ‘no’ for competent tribunals to handle the investment disputes. Nevertheless, neither the ICSID Convention nor the BITs provide definitely definition of ‘investment’. Moreover, the Salini criteria identified by Professor Christoph Schreuer to determine an ‘investment’ is controversial issue and not used by all arbitral tribunals in their jurisdiction. As stated in the preambles of the ICSID Convention and the BITs, economic development and cooperation are objects and purposes of the parties. There is a close relationship between investment and economy. Investment is considered as a motivation to boost the economic development and strengthen business cooperation among States. In which, the host States have obligations to protect foreign investment and the foreign investors, by their investment, make contribution to the economic development of the host States. This paper suggests that the limits of the notion of an ‘investment’ for the purport of jurisdictional requirements under the ICSID Convention and the BITs is upon the contribution of the ‘investment’ to the economic development of the host State.