The Case for a Coherent Approach in the Understanding and Application of the Concept of an ‘Investment’ in ICSID Arbitration

A key tenet of legal practice, and a principle that has ensured the effective resolution of disputes over time, is the idea of coherence. In ICSID arbitration, there is a perceived lack of coherence in the application of an important element of the jurisdictional requirement as stated in the ICSID Convention. Article 25(1) of the ICSID Convention limits the jurisdiction of ICSID tribunals to cases that directly emanate from an investment dispute. The problem is that the ICSID Convention fails to define the term ‘investment’ at any point. This has led to a multiplicity of approaches being taken by arbitral tribunals and academics in interpreting and applying the concept. The effect of this being a state of uncertainty, a lack of coherence and other issues that threaten this medium of arbitration as will be discussed. This thesis thus aims to carry out an analysis of the various approaches that have been taken, in order to better understand the concept of an ‘ICSID investment’. This concept is considered with reference to the Vienna Convention on the Law of Treaties, as the Vienna Convention is accepted as a correct standard of international treaty interpretation. This will be done to ascertain if the approaches or criteria used thus far have taken the right viewpoints. It thus allows the main focus of this thesis to be achieved, which is to develop a well-thought out and coherent approach that can be used to correctly understand and apply the term ‘investment’ in ICSID arbitration. It is hoped that this new approach, composed of a subjective and objective element, will adequately balance the interests of both foreign investors and host States, thus furthering the main aims of the ICSID Convention. This thesis takes the form of a doctrinal research, analysing both ICSID and relevant non-ICSID jurisprudence, the preparatory works to the ICSID Convention, the Vienna Convention on the Law of Treaties, and other relevant international investment agreements and treaties