![]() Where the original maturity of the loan is at least 3 years, but does not include a loan, regardless of original maturity, to a state enterprise Īn interest in an enterprise that entitles the owner to share in income or profits of the enterprise Īn interest in an enterprise that entitles the owner to share in the assets of that enterprise on dissolution, other than a debt security or a loan excluded from subparagraph (c) or (d) Where the original maturity of the debt security is at least 3 years, but does not include a debt security, regardless of original maturity, of a state enterprise Where the enterprise is an affiliate of the investor, or Article 1139 provides that investment means: KeywordsĪ typical example is the North American Free Trade Agreement (NAFTA). ![]() In this regard, the definition of investment clause under investment treaties is likely to subject to greater scrutiny when tribunals apply the “ordinary meaning” of investment in case the substantive investment treaty failed to provide a “special meaning” under Article 31(4) of the VCLT. The same ordinary meaning might also be applied in non-ICSID arbitrations only if the governing substantive treaty does not clearly define what constitutes an “investment”. For the ICSID jurisdiction, the “objective and inherent meaning” of the term “investment” should be appreciated and applied in accordance with Article 31 (1) of the VCLT, which include only the minimum core of the concept. ![]() It is submitted that a “double door” theory may be useful to address the relationship between the Article 25 of the ICSID Convention and the definition of “investment” clause under applicable investment treaties. Nonetheless, the effect of such newer investment treaties remains to be tested in arbitral cases. In response to such controversy and uncertainty, many States have used various approaches to narrow and clarify the scope of investment for the avoidance of exposure to ISDS claims, such as the inclusion of the characteristics of investment, the explicit exclusion of certain assets, and the requirement of in accordance with host State’s laws. In particular, the silence on the term “investment” under the ICSID Convention has given rise to divided interpretations in arbitral decisions on whether the tribunal should appreciate and apply the “ordinary, objective or inherent” meaning of the term “investment” to establish the ICSID jurisdiction. The concept of “investment” as a prerequisite for investor-State arbitration has caused many difficulties and controversies in ISDS practice.
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