Assessing the Concept of Investment in the Jurisprudence of the International Center for Settlement of Investment Disputes
Deputy of Dean and Associate Professor of Private Law – Faculty of Law and Political Science – University of Abderrahmane Mira – Bejaia – Algeria
This research reviews the impact of the absence of a definition of the term “investment” in the Washington Convention, which established the International Center for Settlement of Investment Disputes (ICSID), on the proper adaptation of the legal relationship between the conflicting parties, and thus on the substantive jurisdiction of the Center. The judiciary of ICSID adopted a liberal approach in estimating the investment requirement, to include in its competence all forms of economic operations, including those that are not related to the investment process in the strict technical sense of the term.
The importance of this research stems from the significant role that foreign investments play in advancing and strengthening the economies of different countries, especially the developing ones, which is then reflected in development projects. This research takes into consideration the facilities and incentives provided in this field, whether directly or through bilateral agreements, and the arbitration issues arising from such investments.
The assessment of the concept of investment in the jurisprudence of ICSID, which is the research problem, is examined through two sections: the first deals with the concept of investment from a legal point of view and the stance of the Washington Convention, while the second explains the findings of the arbitral jurisprudence of ICSID regarding the concept of investment. The research adopts an inductive approach that combines description and analysis and clarifies and criticizes the arbitral jurisprudence of the Center. In conclusion, the research highlights that the center’s adaptation towards the investment requirement was not accurate and not in line with the precise concept of the investment process. It also explains that the Center adopted a broad concept, which is based on the broad definition of “investment” included in the texts of bilateral or multilateral agreements, and ICSID’s desire to adopt a liberal interpretation of the specified criteria.
The research recommends that countries hosting investments should be keen to provide an appropriate climate for conflict management and favor amicable solutions, and that the foreign investor must deal transparently, consider the position of the partner in this regard, avoid abusing the means of pressure on the host country, and ensure that all his requests are reasonable. The research also highlights the need for an accurate definition of investment and its instruments of protection, which will prompt the arbitration courts of ICSID to interpret the specific criteria for investment accurately and properly, thus limiting expansion in the assessment of the concept of “investment”.
Keywords: foreign investment, arbitration, investment disputes, investment contracts, investment incentives, Washington Convention of 1965 for the settlement of investment disputes.