The Notion of Investment: New Controversies

In: The Journal of World Investment & Trade
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  • 1 Sebastien Manciaux, Professor at the University of Bourgogne and member of the CREDIMI [Centre de recherche sur le droit des marches et des investissements internationaux]. The author may be contacted at: sebastien.manciaux@u-bourgogne.fr. This paper is an updated and supplemented version of a presentation delivered by the author at a conference held in Paris on 3 April 2008 entitled "La procedure arbitrale relative aux investissements internationaux: aspects recents". The author wishes to thank Monica Nepote Cit for her assistance with the English translation of the original French version of this paper. This paper is dedicated to the Memory of Thomas Waelde which prompted me to publish in English and gave me valuable suggestions for this work last summer even if it did not share all my views on this question (so was Thomas).

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  • 2 Thus excluded from this list, and from the analysis conducted in this study, are the cases that approach the question of knowing whether the transactions in question are indeed investments "performed in conformity with the rules in force ", the only category of investments covered by the applicable BITS. In this situation, the question at hand is not whether an investment exists, but rather if the transaction in question does in fact satisfy an additional requirement necessary for the application of a BIT (its realisation under specific norms). A negative answer to such a question does not mean ipso facto that the transaction analysed by the Tribunal is not an investment... For an accurate description of the current situation, see for instance F. Yala, "The notion of "investment" in ICSID Case Law: A Drifting jurisdictional Requirement? Some Un-Coiiveiitioiial Thoughts on Salini, SGS and Mihaly", Journal of International Arbitration, Vol. 22, No. 2, 2005. ' Decision on jurisdiction, 23 July 2001, para. 44. 5 Ibid., para. 52. As noted by F. Yala in his paper, these criteria are not entirely new and the Fedax and CSOB cases could be seen as precedents (F. Yala, "The notion of "investment" in ICSID Case Law: A Drifting Jurisdictional Requirement? Some Un-Conventional Thoughts on Salini, SGS and Mihaly", op. cit., footnote 3, p. 109). But, more developed and systematized, the Salini decision is generally considered as the leading one.

  • 6 For the Tribunal, the concession contract seemed to be the paradigm of an investment (para. 79 to 105 of the decision, especially para. 104). 7 Joy Mining Machinery Ltd v. Egypt (Arb/03/11), Award for lack of jurisdiction, 4 August 2004, para. 55 to 57; Bayindir v. 7'Mr<.'fy (AKrs/03/29), Decision on jurisdiction, 14 November 2005, para. 130 to 137; Jan de Nul N. V v. Egypt (AIU3/04/13), Decision on jurisdiction, 16June 2006, para. 90 to 96 ; Saipern Spa v. Bangladesh (Aiu3/OS/7), Decision on jurisdiction, 21 March 2007, para. 99 to 114; Malaysian Historical Sailors and others v. Malaysia (ARB/05/10), Award for lack of jurisdiction, 17 May 2007, para. 43 to 46. 8 Consorzio Lesi-Dipenta v. Algeria (AKR/03/8). Award for lack of jurisdiction, 10 January 2005, para. 13 ; Lesi SpA and Astaldi SpA v. Algeria (AR�/(J5/3), Decision on jurisdiction, 12 July 2006, para. 72. '' Patrick Mitchell v. Congo (A)m/99/7), Decision of the arl hoc committee setting aside the award, 1 November 2006, para. 39 and 40. r�r Anc affiliate Ltd and others v. Hungary (Artn/03/16), Award, 2 October 2006, para. 159 and 160. �� Helnan International Hotel A/S v. Egypt (Arb/05/19), Decision on jurisdiction, 17 October 2006, para 77. 12 Mcr Power Group LC and others v. Ecuador (AK.H/03/16), Award, 31 July 2007, para. 159 and 160; Parkerings-Compagniet AS v. Republic of Lithuania (ARH/05/8), Award, 11 September 2007, para. 249 to 254. 13 Noble Energy Inc and others v. Ecuador and Consejo Nacional de Elertnridad (AKt3/OS/12), Decision on jurisdiction, 5 March 2008, para 128 to 135.

  • 14VictorFlexCnsadoandfotindation«PresidentAllende»v. Chile (ARIJ/98/2), Award, 8 May 2008, para 232. 15 Biu�ater Gardf (Tarlzal1ia) Ltd. v. Tanzania (Aiu/05/22), Award, 24 July 2008, para 310-318. In the latest decision known so far (loan Micula and otlrers v. Romania (Am/05/20), Award, 24 September 2008, para. 119 to 128), the Respondent State did not contest that the investments made by the Claimants qualify as investments for the purpose of the 1(:sii) Convention but only that investment incentives were not investment in themselves. 6 I. Fadlallah, "La notion d'investissement: vers une restriction a la competence du Cirdi?", Global Reflections on International Laud, Commerce and Dispute Resolution, LiberAmicorum in honour of Robert Brillcr, Ice Publishing, 2005, pp. 259 and following. See also E. Gaillard, observations on the hatrick Mitchell v. Congo decision, "Cirdi, chroniquc des sentences arbitrales", JDI 2007, p. 359 and following. 17 F. Horchani, "Le droit international des investissements a l'heure de la 1110nclialisation",jDI 2004, p. 367 and following. 18 W. I3cn Hamida, "La notion d'investissement, notion maudite du systcmc Cirdi?", in Investissements internationaux et arbitraye, chronique sous la direction de I. Fadlallah, Ch. Leben et E. Teynier, Gazette du halais, Friday 14, Saturday 15 December 2007, pp. 33 and following.

  • 19 See, Ch. H. Schreuer, Tho IcsiD Convention: A Commentary, Cambridge University Press, 2001; I. Fadlallah, "La notion d'investissement: vers une restriction de la competence du Cirdi?", op. cit., footnote 16, p. 267: the author insists on the formality of any definition; N. Rubins, "The notion of'investmcnt' in International Investment Arbitration", in Arbitratiqq Foreign Investment Disputes, N. Hom (editor), Kluwer, 2004, p. 283 and following; the author highlights the following citation: "Dc/!K�!0;M are like belts. The shorter they are, the more elastic they need to be". z° For developments on this matter, see for example the author's book "Investissements etrangers et arbitrate entre Etats et ressortissants d'autres Etats, "frCllte annees d'activite du Cirdi Litec, 2004, pp. 44-46. zt "While the consent of both parties is an essential prerequisite for the jurisdiction of the Centre, consent alone will not suffice to bring a dispute within its jurisdiction. In keeping with the purpose of the Copivcntion, the jurisdiction of the Celitre is further limited by reference to the nature of the dispute and the parties thereto" Report of the Executive Directors on the Convention on the Settlement of Investment Disputes between States and Nationals of Other States, IcsiD Doc/2, para. 25. 22 On the power struggle that generally governs the adoption of such bilateral treaties, as well as on their reciprocity which is more formal than real, see for example M. Salem, "Le developpement de la protection conventionnelle des investissements etrangers", Jn1 1986, pp. 579 and following, especially, pp. 598 and following.

  • 23"Intruth,BiTsneitherpromotenorprotectinvestmentsinasyecficmanner,butrathergoodsinagenericmnnner."" D. Carreau and P. Juillard, Droit intemational economique, fourth edition, Paris, Lgdj, 1998, para 1066; see also, J-P Laviec, Protection et promotion des investissements, Paris, PUF, 1985. z4 One may observe in this respect that the adoption of most BITS currently in force but also of multilateral treaties including a section on investments (NAFTA, and the Treaty on the Energy Charter especially) precedes the growth of disputes concerning the notion of investment. 25 The most important material commitments are as follows: commitment to ensure to the foreign investment and/or investor a fair, non discriminatory and equitable treatment, commitment to ensure to the foreign investment and/or investor full protection and security, strict framing of the direct or indirect expropriations, obligation to respect the personal commitments taken in favour of the foreign investor ("mirror effect" clauses contained in some BITS), guarantee of transfers present in all laws and treaties on investments, etc. The procedural commitment is the consent given by the State in advance and erga o�tine.� to an alternative form of settling disputes.

  • 2(, In this respect the absence of a definition of the notion cannot be compared with the silence of the 1980 Vienna Convention on Contracts for the international sale of goods concerning the notion of sale; thc latter is the object of specific definitions concordant in domestic Law systems, which is far from being the case for the notion of investment. 27 See for example Petrobert Ltd v. Kirghtstan, Award rendered under the auspices of the Arbitration institute of the Stockholm chamber of commerce, in application of the Treaty on the Energy Charter, 29 March 2005, and its commentary by F. Yala, in Investissemeents iiiteniationaiix et arbifra,�e, chronicle under the direction of I. Fadlallah, Ch. Leben and E. Tcynier, Gazette dii Palais, Friday 14, Saturday 15 December 2005, pp. 40 and following. Sec also BG Group Plc. n. Arqentina, Award rendered under the aegis of the UNCITKAL arbitration rules, in application of the UK-Argentina BIT, 24 December 2007, para. 111 and following (available at http://ita.law.uvic.ca/); Me v. Czech Republic, award under the aegis of the Arbitration institute of the Stockholm chamber of commerce in application of the UK-Republic Czech Bit, Scc Case 49/2002, (2004), 1 Stockholm Arbitration Report, pp. 145 and following); S.l�. Myers v. Canada, Interim Award rendered under the auspices of the UNCITKAL arbitration rules by application of NnFrn Chapter 11, 13 November 2000 (available at www.naftalaw.org). For commentaries on these two last decisions, see Yves G.L. Wolters, "The Meaning of "Investment" in Treaty Disputes: Substantive orJurisdictional? Lessons from Nagel v. Czech Republic and S.D. Myers v. Canada" 8J.W.LT. 1, February 2007, pp. 175 and following. ZR In support of this, see also E. Gaillard, observations on the Patrick Mitchell v. Congo decision, "Cirdi, chronique des sentences arbitrales", jiji 2007, p. 368 and W. Ben Hanllda, "La notion d'investissement, notion maudite du systeme Cirdi? " in op, cit., footnote 18, p. 39. =y See 1. Fadlallah, "La notion d'investissement: vers une restriction a la competence du Cirdi ?", in op. cit., footnote 16, p. 268. 30 Contrary to the ICSID, the other international arbitration institutions (Ice, LciA, Arbitration Institute of the Stockholm chamber of commerce, etc.) do not limit ratione material the jurisdiction of arbitral Tribunals ruling under them only to disputes relating to an investment.

  • 31 In support of this, see Jan de Nul N.V. v. Egypt (ARB/04/13), Decision on jurisdiction, 16 June 2006, para. 49 and 50. 32 I. Fadlallah, "La notion d'investissement: vers une restriction de la competence du Cirdi?", op. cit., footnote 16, p. 265. 33 "Indeed, such concept ofiitvestnteiit should prevail over any other 'd�fitiitioti' of investment in the parties ' agreement or in the Bit, as it is obvious that the Special and privileged arrangements established by the Washington Convention can be applied only to the type of investment which the Contracting States to that Contention envisaged". Decision of the arl Iror conmuttee, 1st November 2006, para 25. 34 On previous ICSID decisions on this issue, see the author's book Grvestissements etrangers et arbitraye entre Etats et ressortissmzts d'autres Etats, 7'rente amlées du Cirdi, Litec, 2004, pp. 61-62. is Ruling that in the absence of a definition of the term 'investment' in the Washington Convention it was sufficient that the transaction be considered as such under the BIT in order to grant jurisdiction to an ICSID arbitral Tribunal (see, supra, para. 2). "·The Tribunal notes, however, that these elements of the stiaested d�fil1itjorl, while they tend as a rule to be present in most investments, are not a formal prereguisite for the finding that a transaction constitutes all investments as that concept is understood under the Convention." Decision on jurisdiction, 24 May 1999, para. 90. See, for example, Mitchell v. Conko (Aus/99/7), Award, 9 February, 2004, para. 55. See also Biwater (say (Tanzania) Ltd. v. Tanzania (ARB/05/22). Award, 24 July 2008, para 312-318. In doctrine, see Ch. H. Schrcuer, The ICSID Convention: A Commentary, Cambridge University Press, 2001, p. 140; I. Fadlallah, "La notion d'investissement: vcrs une restriction a la competence du Cirdi?", np. cit., footnote 16, p. 267.

  • 3s Clues correspond to a series of known facts from which one can establish, thanks to inductive reasoning, the existence of an alleged/disputed fact, the proof of which is not directly possible. In French Law, clues are not used to define a legal act, such as an investment, but help to determine the existence of a fact; the absence of a clue is therefore not determining to this respect since others exist. ;y On this matter, see Bilateral Investment Treaties 1995-2006: Trends in Investment Rulemaking, ITA/ Ut�rc'rnn/2006/5; United Nations Publication, 2007, p. 8 and following. 4° The link between investment and asset in Investment treaties has been underlined in Nagel v. Czech Republic (See Case 49/2002, (2004), 1 StockHolm Arbitration Report, pp. 145 and following). The transaction at stake was a cooperation agreement signed in 1993 by Mr Nagel and a Czech enterprise wholly owned by the Czech Republic with the undertaking to cooperate for the purpose of obtaining operating rights for a telecommunications business. The Tribunal noted that this agreement - which did not oblige the parties to make specific contributions to their project - was only of a prepatory nature and that the rights derived from it had no financial value. The tribunal thus concluded that Mr Nagcl's right under the cooperation agreement were not such as to constitute an "asset", or an "investment" within the meaning of article 1 of the United Kingdom-Czech Republic BiT (ibid., pp.164-165). On this case, see Yves G.L. W<mrstts, "The Meaning of "Investment" in Treaty Disputes: Substantive or Jurisdictional? Lessons from Nagel v. Czech Republic and S.D. Myers v. Canada", 8jWlT, Nor. 1, February 2007, pp. 175-185.

  • On this matter, see especially, the author's book, "Investissements etrangers et arbitrage entre Etats et ressortissants d'aiitres Etats, Trente annees d'acitivite du Cirdi," Litec, 2004, p. 67. °2 Information gathered by the only existing source concerning this dispute, P. Lalive's article, "The First World Bank Arbitration (Holiday Inns v. Morocco) - Some Legal Problems", 51 Brit. Y. B. Int'I L. 1980, p. 123 and following. °' Decision of the ad hoc Committee, 1 November 2006, para. 27, setting aside the award rendered 30 November 2004. See also Malaysian Historical Salvors and others v. Malaysia (ARB/05/10), Award declining jurisdiction, para. 109, in which the Tribunal notes that, concerning the contribution, "the Claimant has, like the Claimants in Salini, made contributions in money, in kind and in industry...". ".

  • " In Amco Asia v. Indonesia (ARS/81 /I), the investor was granted a lease of 19 years along with an amortising share in profits earned by the hotel he/she was managing under the aforementioned lease. 4� See, Ch. H. Schreuer The karn Convention: A Commerttary, Cambridge University Press, 2001, p. 140. ^f� In this respect, see also P. Bernardini, "Investment Protection under Bilateral Investment Treaties and Investment Contracts", 2 J. W.I. T., No. 2, June 2001, p. 235: "An investment does not consist merely in the transfer into or creation of all asset in the economy of a given State. Such an asset is, in fact, only the instrument through which the private investor aims at obtaining, after a certain period af time, a return justifying the risk it has accepted to run. Thus, both the lapse of some time for the investment to become rooted in the economy of the host State and the assumption of the risk that no return (or a returrt lower than expected) will be forthcoming characterize all investments". ". 4� In CSOH v. Slovakia (Akt3/97/4), the Respondent State put forth the following definition: "an investment consists essentially in the acquisition of property or assets through the expenditure of resources by one party (the 'investor) in the territory '!l afore(�1I country (the 'host State ), which is expected to produce a benefit on both sides and to offer a return in the future, subject to the uncertainties of the risk involved. (Decision onjurisdiction, 24 May 1999, para. 78, and see supra footnote 36 the Tribunal's answer.) 4' In loan Micula and others v. Romania (AR.B/05/20), Award, 24 September 2008, para 128, the Tribunal held that "investments do include income expectations and such income will of necessity be· less if an investor is deprived of incentives". In doctrine, see, Ch. A. Michelet, "Les nouveaux cadres de la cooperation industricllc", in Les investissementc frantais dans le 1'iers Monde, J. Bourrinct (dir.), Economic (1984), p. 59 and following, especially p. 68: "T7te adequate criterion is thus pro/it auess. It is proportiorlate to tlte local added value a(the project or enterprise. It varies according to the obtained results. This distinction is central and allows to avoid a transfer from the investment modality to a sale modality." See, also, E. Gaillard, "Cirdi, chronique des sentences arbitralcs", Jn� 1988, p. 176-177. Contra, see, Ch. H. Schreuer, The kato Convention: A Commentary, Cambridge University Press, 2001, p. 140 who evokes "a certain regularity of profits and earnings". The regularity of expected return, even if rendered less precise by adding the expression "a certain", raises some difficulties. Does it mean that the irregularity of the amount of revenues received due to the acquisition of a majority interest in a company precludes qualifying this acquisition as an investment?

  • 49 For a more ample discussion on the distinction between loan and investment, see the author's book Investissements etran,qers et arbitrqqe entre Etats et ressortissants d'autres Etats, Trente annees d'activit6 dti Cirdi, Litec, 2004, p. 76. 511 Icsid, Annlysis of documents relative to the origin and elnborntiort o(the Convention, Washington D.C., 1970, vol. 1, p. 116. 51 See, Consorzio Lesi-Dipenta v. Algeria (AikB/03/8), Award for lack of jurisdiction, 10 January 2005, para. 14(ii), as well as LesiSpA v. Algeria (An.B/05/3), Decision on jurisdiction, 12 July 2006, para. 73 (iii).

  • 5z Decision on jurisdiction, 23 July 2001, para. 53. 53 Jan de Nul N.Yv. Egypt (APB/04/13), Decision on jurisdiction 16 June 2006, para. 93; Malaysian Historical Salvors and others v. Malaysia (AKU/OS/10), Award for lack of jurisdiction rendered 17 May 2007, para. 110. 5^ Para. 94. 55 Ibid, para. 95. sb Decision on jurisdiction, 21 March 2007, para. 7 to 12. s� Ibid., para. 102.

  • 58 Ch. Oman, Les notivellesfonnes d'investissernent dans les pays en voie de développefflfrlt, Etudes du Centre de développement de I'OCDE, 1984, p. 11. See also, D. Carreau and P. Juillard, Droit international economique, fourth edition, Paris, LGDJ, 1998, para 1083: "The investment transaction necessarily entails that the investor be associated to the risks of the enterprise ". 59 The sole arbitrator ruling in Malaysian Historical Sailors and others v. Malaysia (ARB/05/1 0) decided that the risks assumed under the Contract were no more than ordinary commercial risks and that mere commercial risk did not satisfy the risk criterion set forth by the Salini jurisprudence (Award declining jurisdiction, 17 May 2007, para. 112). 60 Thus article 4 of the Mauritanian Law dated 16 October 1976 relative to investments provided for an authorisation procedure and added in section 2: "Authorisation cannot include the commitment to protect an investor against losses, foregone profit or expenses resulting from the evolution of production techniques, economic trend or the investor's management." (Unofficial translation). 61 On this question, see the author's presentation "La compatibilité des mesures d'urgences iconomiqi4es avec les obligations internationales des Etats découlmlf des TBl" delivered at a conference held in Paris on 17 and 18 October 2007 entitled L'avenir du droit des investissements en Amérique Latine (to be published).

  • "2 The location of the investment in foreign territory is important since it gives the investment its international character and justifies the application of rules relative to foreign investments. This explains that the arbitral Tribunal constituted in Bayview v. Mexico declared that it lacked jurisdiction by an award dated 19 June 2007 after having noted that the American Claimants could not prove to have made any investments in the Mexican territory, within the meaning of NnFrn article 1101(1)(b). But one could recall that the territoriality criterion set forth by the BIT are sometimes very loosely interpreted, such as in SGS v. Pakistan and SGS v. Philippines. On this issue, see F. Yala, "The notion of "investment" in ICSID Case Law: A Drifting Jurisdictional Requirement? Some Un-Conventional Thoughts on Salini, SGS and Mihaly", op. cit., footnote 3, especially pp. 117-120. 63 See, supra, para. 17. m Creation of the Overseas Private Investment Corporation in the United States, development of investment insurance (parallel to exportation insurance) by the CoFACE in France, creation of the Multilateral Investment Guarantee Agency, etc. ss "N�,r can the Tribunal accept the argument that, unlike the case of an investment, there is no risk involved in this transaction: rhe very existence of a dispute as to the payment of the principal and interests evidences the risk that the holder of the notes has taken. " Decision on jurisdiction, 11 July 1997, para. 40. 66 E. Gaillard, observations on the same decision, Jm 1999, pp. 290 and following, especially p. 293. 67 Para. 14 (iii). See also Bayindir v. Turkey (ARB/03/29), Decision on jurisdiction, 14 November 2005, para. 134 to 136; Saipem Spa v. Bangladesh (ARB/05/7). Decision on jurisdiction, 21 March 2007, para. 109.

  • 68 See especially Lesi SpA and Astaldi SpA v. Algeria (Akts/OS/3), Decision on jurisdiction, 12 July 2006, para. 73 (iii). by See )K/m, Part In, para. 34 to 36. 70 See supra, preceding paragraph. "The only possible indication of an objective meaning that can be gleaned from the Convention is contained in the Preamble's first sentence, which speaks of "the need for international cooperation for economic development and the role of private intemational investment therein ". Therefor, it may be argued that the Convention's object and purpose indicate that there should be some positive impact on development". Ch. H. Schreuer, The ICSID Convention: A Commentary, Cambridge University Press, 2001, p. 140. 72 See supra, para. 1. 73 Consorzio Lesi-Dipenta v. Algeria (ARB/03/8), Award for lack ofjurisdiction, 10 January 2005, para. 13 ; Lesi SpA and Astaldi SpA v. Algeria (ARB/05/3), Decision on jurisdiction, 12 July 2006, para. 72. Bayindir v. Turkey (Altt3/03/29), Decision on jurisdiction, 14 November 2005, para. 137.

  • �5 Decision on jurisdiction, 17 May 2007, para. 132. �6 Decision of the ad hor committee, 1 November 2006, para. 39. 77 Sec especially W. Ben Hamida, "La notion d'investisserncnt, notion maudite du systeme Cirdi?" in op. cit, footnote 18, pp. 33 to 38, and E. Gaillard, "Cirdi, chronique des sentences arbitrales", Jnt 2007, p. 367. 78 In the explanations accompanying the Preliminary Draft of the Icsid Convention, it was already stated that if considerations had been given to fixing a lower limit for the value of the subject-matter of a dispute, this idea has been dropped quickly, both for theorical reasons ("The subject-matter of a dispute might be of insignificant pecuniary value, but might involve important questions ofprinciple") and practical reasons (in some instance, the pecuniary value of a dispute might not be readily ascertainable). See Convention on the Settlement of Investment Disputes between States and National of Other States, Documents concerning the origin and the Formulation of the Convention, Washington DC, 1968, Vol n., Part. 1, pp. 184 and following, especially p. 204. And there are obvious and mechanical links between the value of the subject-ntatter of a dispute and the amount of the investment made on the one hand and between this amount and the contribution of the investment to the economic development of the host State on the other hand...

  • For example in Kloclzner v. United Republic of Cameroon (Ap.B/81/2), the origin of which lies in the acquisition by Cameroon, through a public company, of a fertiliser factory which never functioned satisfactorily bcforc being shut down for lack of profitability. We may otherwise note that qualifying as an investment this transaction consisting mainly in the turn key sale of a factory is more than debatable.

  • 80 For further analysis on this issue, see the author's book Investissements strangers et arbitrate entre Etats et ressortissants d'autres Etats, Trente annees d'activite du Cirdi, Litec, 2004, pp. 80 and following. 11 Thus a sale is a contract by which one of the parties, the seller, conveys the property of a good and commits to delivering it, the buyer binds himself or herself by paying its price. A loan is the convention according to which the lender remits a good to the borrower in order for him/her to use it, with an obligation to return it. A contract for services is a contract through which a person (the entrepreneur) binds himself or herself to another (the client or developer) to produce a work (construction, repair, etc.) by providing his/her work, industry, and sometimes material. These definitions are certainly of domestic Law (G. Cornu (under the direction of), Vocabulaire juridique, PUF, 7th edition, 1994) but can be applied to international economic relations by adding the criterion of internationality. R2 Salini Costruttari SpA & Italstrade SpA v. Morocco (ARB/00/4), Decision on jurisdiction, 23 July 2001, para. 53; Consorzio Lesi-Dipenta v. Algeria (A1t13/03/8), Award for lack ofjurisdiction, 10 January 2005, para. 14(i); Bayindir turkey (Al�B/03/29), Decision on jurisdiction, 14 November 2005, para. 115 and following ; Lest SpA v. Algeria (AM/05/3), Decision on jurisdiction, 12 July 2006, para. 73 (i); Saipem Spa v. Bangladesh (AM/05/7), Decision on jurisdiction, 21 March 2007, para. 101.

  • 13 See, F. Yala, "La notion d'investissement dans la jurisprudence du Cirdi: actuality d'un critere de competence controverse (les affaires Salini, SGS et Mihaly)", in Le contentieux arbitral transnational relatif a I'investissement, under the direction of Ch. Leben, Anthemis, 2006, p. 288. 84 Award, 24 July 2008, para 319. ds Ibid., para 321.

  • 86 Salini Costruttori SpA Fr Italstrade SpA v. Morocco (AEZa/00/4), Decision on jurisdiction, 23 July 2001, para. 55; Bayindir v. Turkey (Aiu3/03/29), Decision on jurisdiction, 14 November 2005 para. 135; Lesi SpA v. Algeria (Atm/05/3), Decision on jurisdiction, 12 July 2006, para. 73 (iii) which contains this additional analysis, compare to the corresponding paragraph in the award declining jurisdiction rendered in Con.sorzio Lesi-Dipenta v. Algeria (ARB/03/S); Saipem Spa v. Bangladesh (AHS/OS/7), Decision on jurisdiction, 21 March 2007, para. 109, in a more dispersed manner. x� Salini Castn4ttori SpA & Italstrade SpA v. Morocco (ARB/00/4), Decision on jurisdiction, 23 July 2001, para. 56. 88 The benefit resulting from the existence of a positive difference between the expected remuneration and the production cost.

  • R9 In this respect, see also P. Bernardini, "Investment Protection under Bilateral Investment Treaties and Investment Contracts", 2 J.W.LT., No. 2, Junc 2001, p. 235. 9U See I. Fadlallah, "La notion d'investissement: vers une restriction dc la competence du Cirdi?", in op. cit., footnote 16. 11 Salini Costruttori SpA & Italstrade SpA v. Morocco (ARB/00/4); Consorzio Lesi-Dipenta v. Algeria (Aiu/03/8); Bayindir v. Turkey (ARB/03/29); Lesi SpA and Astaldi SpA v. Algeria (ARB/05/3) and Saipem Spa v. Bangladesh (ARB/05/7). '!2 The award for lack of jurisdiction rendered in Malaysian Historical Salvors and others v. Malaysia (ARB/05/1 0) is currently in annulment proceedings.

  • 11 On this Treaty, see, for example, David A. Gantz, "Settlement of Disputes Under the Central America- Dominican Republic-United States Free Trade Agreement", 30 Boston College Ititeniational & Comparative Lav Review (2007), pp. 331 and following.

  • 11 The existence of an investment can be inferred from the existence of a concession contract, which constitutes an easily identifiable investment (para. 79 to 105, especially 80 to 104). ys A procurement contract of mining equipment is an ordinary contract of sales that cannot be construed as an investment under the meaning of the ICSID Convention because it does not satisfy the criteria of duration, risk, projected profit, and contribution to the development of the host State, (para. 55 to 57). �6 A construction contract may constitute an investment if 3 criteria are satisfied: contributions to the host State, a certain duration of these contributions that entail a risk for the agent. The transaction's contribution to the economic development of the State is not to be taken into account because it is difficult to evaluate and implicitly covered by the other criteria (para. 13 and 14). 97 Application of the "Sahni test" (with doubt concerning the fourth criterion) to a construction contract (para. 130 to 137). 98 Application of the "Salini test" (with farther discussion of the duration criterion) to a service contract (para. 90 to 96). 99 Identical reasoning to the one followed in Lesi-Dipenta, with additional developments on the risk criterion. 100 The Tribunal mainly rests on the financial contribution and its compensation in order to qualify the transaction (construction of an airport terminal and providing of management services) as an investment. 101 In the absence of a "contribution to the econornic development of the host State", a transaction may not be qualified as an investment under the Washington Convention. 102 Application of the "Salini test" to a construction contract (para. 99 to 111). The rights following from an Ice arbitral award concerning the failure to perform a construction contract arc included in the general understanding of an investment transaction (para. 112 to 114). �03 Contract for the recovery of sunken ship's cargo on the basis of compensation relative to the sale of objects brought back to the surface. Detailed analysis of precedents and retained methods by ICSID arbitral Tribunals. Application of the "Salini test" leading to the refusal to qualify the contract as an investment (para. 43 to 146). 10' Construction and operating contract of two electric power plants. In the absence of a definition in the Washington Convention of what constitutes an investment, it is good enough for the transaction to be considered as an investment according to the Brr in order to grant jurisdiction to an ICSID arbitral Tribunal (para. 159 and 160).

  • tos In the absence of a definition in the Washington Convention of what constitutes an investment, it is good enough for the transaction to be considered as an investment according to the BIT in order to grant jurisdiction to an Icsii) Tribunal (para. 249 to 254). �o�� Construction and operating contract of an electric power plant. Application of the "Salini test" (para. 128 to 135). low Shares in a press company may constitute an investment if 3 criteria are satisfied: contributions to the host State, a certain duration of these contributions that entails a risk for the agent. The transaction's contribution to the economic development of the State is not to be taken into account because it is difficult to evaluate and implicitly covered by the other criteria (para 231 to 235). 108 Management and operation of the Dar es Salaam water and sewerage infrastmcture under a concession agreement and through the constitution of a local company. Flexible and pragmatic approach to the meaning of "investment" which takes into account the features identified in Salini, but along with all the circumstances of the cases. Even if the Respondent could demonstrate that any, or all, of the Salini criteria are not satisfied in this case, this would not necessarily be sufficient - in and or itself- to deny jurisdiction. 109 Creation and operation of agribusiness. The Respondent State did not contest that the investments made by the Claimants qualify as investments for the purpose of the ICSID Convention but only that investment incentives (withdrawn due to Romania joining the European Union) were not investment in themselves.

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