X Notion of Investment

Subject(s):

Conduct of proceedings — Jurisdiction

This chapter explores the notion of investment in investment protection instruments such as international treaties and national investment laws. Determining whether a particular economic activity constitutes investment under the definitions of investment protection instruments is one of the prerequisites for jurisdiction of an arbitral tribunal. Typical categories of investment activity found in most investment treaties include real estate and other direct property rights; shareholdings and other forms of participation in local companies; intellectual property and other intangibles; and contractual rights including concession agreements. On the other hand, the term ‘investment’ is not defined in the International Centre for Settlement of Investment Disputes (ICSID) Convention. Nevertheless, scholarly writings and arbitral decisions have suggested that an investment under Article 25(1) has certain inherent characteristics, which sets it apart from other economic activities.