Subject Matter Jurisdiction: The Notion of Investment

19 ICSID Rep (Cambridge, University Press, 2021) (eds. Jorge Vinuales and Michael Waibel), 25-84

57 Pages Posted: 9 Mar 2021 Last revised: 19 Apr 2021

See all articles by Michael Waibel

Michael Waibel

University of Vienna - Faculty of Law

Date Written: January 11, 2021

Abstract

As is well known, the ICSID Convention does not define what “investments” are. Article 25 ICSID Convention, the only provision on the subject matter jurisdiction of ICSID tribunals, merely refers to “investment”. Investment tribunals and the literature have adopted divergent approaches with respect to two specific features of the term “investment”. These two features are: (i) whether “investment” in Article 25 ICSID Convention has an objective meaning, in addition to the definition of investment in the instrument of consent/the investment treaty (the controversy over the objective versus subjective meaning of investment); and (ii) if “investment” has an objective meaning, which elements ought to be used to objectively determine investments (the controversy about objective, or characteristic elements of investments). Specifically, there has been some controversy as to whether an objective element is that the transaction contributes to the host country’s economic development.

This study explores both features. It focuses on the second feature because the objective elements that may characterize investments have considerable practical relevance for the jurisdictional determinations of ICSID tribunals. Section II analyses whether “investment” in Article 25 ICSID Convention has an objective meaning, and whether the term “investment” has evolved over time. Section III examines possible objective elements of investments. Section IV considers two special cases whose investment status is unclear considering these two controversies: first, whether financial instruments qualify as investments and, second, whether commercial arbitration awards, investment awards or judgments by national courts in the host country qualify as investments.

Keywords: Investment; Characteristics; Salini; Portfolio Investment; Foreign Direct Investment; Financial Instruments

JEL Classification: F21; K33

Suggested Citation

Waibel, Michael, Subject Matter Jurisdiction: The Notion of Investment (January 11, 2021). 19 ICSID Rep (Cambridge, University Press, 2021) (eds. Jorge Vinuales and Michael Waibel), 25-84, Available at SSRN: https://ssrn.com/abstract=3763725 or http://dx.doi.org/10.2139/ssrn.3763725

Michael Waibel (Contact Author)

University of Vienna - Faculty of Law ( email )

Schottenbastei 10-16
Vienna, A-1010
Austria

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