The meaning of "investment": ICSID's travaux and the domain of international investment law

Harvard International Law Journal

Volumn 51, Issue 1, 2010, Pages 257-318

  Mortenson, Julian Davis ^a  

^a UNIVERSITY OF MICHIGAN LAW SCHOOL   (United States)

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EID: 77949836378     PISSN: 00178063     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Article

References (658)

1. Treaty between the United States of America and the Republic of Zaire Concerning the Reciprocal Encouragement and Protection of Investment, U. S.-Zaire, art. 1 (c), Aug. 3, 1984, S. TREATY DOC. NO. 99-17 [hereinafter U. S.-Congo-Kinshasa BIT] (Investment means "every kind of investments... including equity...; and includes: tangible and intangible property, including all property rights...; a company or... interests in a company or interests in the assets thereof;... licenses and permits issued pursuant to law...; [and]... any right conferred by law or contract, and any licenses and permits pursuant to law."). Zaire became the Democratic Republic of the Congo in 1997.
2. Malaysian Historical Salvors v. Malaysia, ICSID Case No. ARB/05/10, Decision on Annulment, ¶ 62 (Apr. 16, 2009) [hereinafter Malaysian Historical Salvors II] (Shahabuddeen, dissenting).
3. The accuracy of this assumption continues to be debated. See infra note 243.
4. To be clear, the bare invocation of deference cannot alone resolve the issue. There typically remains a diachronic problem of which state decision to defer to: the up-front adoption of a broad ICSID policy, or the midstream litigation decision to resist the implications of that policy when a particular case threatens financial repercussions. For reasons elaborated in Part III. C, deference is properly directed to a state's ex ante policy decision as a competent and autonomous actor capable of binding itself, rather than to its ex post attempt to walk back from that commitment in an adversarial context. To do otherwise unwinds not only the foundational principle of pacta sunt servanda, but also threatens to make the very act of promising impossible, at least within the gray zone of current Article 25 doctrine.
5. Vienna Convention on the Law of Treaties, art. 32, May 23, 1969, 1155 U. N. T. S. 331 [hereinafter VCLT]. The ICSID travaux should also guide tribunal decision-making for the independent reason that the historical evidence clearly "establish[es]" that "the parties... intended" a "special meaning" for investment, which should therefore be given effect.
6. Id. art. 31 (4).
7. Id. art. 31 (1).
8. This approach does not remove all ambiguity at the margins, and I discuss various test cases in the Conclusion. But the continuing existence of theoretical ambiguity in some conceivable applications does not vitiate the contribution made here. The fundamental point of this Article is that tribunal inquiry on the question of "investment" should shift radically toward respecting state commitments and away from skeptical scrutiny of whether any particular form of economic activity should "really" count as an investment.
9. In particular, investors' only recourse was typically to petition their home government for assistance; unless the host state agreed to arbitrate treaty disputes, investors could not bring direct claims themselves under international law. Kenneth J. Vandevelde, A Brief History of International Investment Agreements, 12 U. C. D AVIS J. INT'L L. & P OLY 157, 159-61 (2005).
10. See generally, eg., RUDOLF DOLZER & M ARGARETE STEVENS, BILATERAL INVESTMENT TREATIES 1-18 (1995).
11. Over the last 20 years, there has been explosive growth in the number of BITs, with the total number rising from fewer than 500 in the late 1980s, UNCTAD, W ORLD INVESTMENT REPORT 1996, at 147 (1996)
12. to more than 2, 600 in 2008, UNCTAD, W ORLD INVESTMENT REPORT 2009, at 33 (2009).
13. It is striking to note how unanticipated this development was by the drafters of the ICSID Convention, at least initially. Memorandum of the Meeting of the Committee of the Whole (Dec. 18, 1962), in 2 HISTORY OF THE CONVENTION ON THE SETTLEMENT OF INVESTMENT DISPUTES BETWEEN STATES AND NATIONALS OF OTHER STATES 59 (1968) [hereinafter 2 HISTORY] (General Counsel Aron Broches) (suggesting that the "situation in which a government... made a general statement that it would submit to arbitration a defined class of disputes with all comers" was "hardly ever likely to obtain"). Many expected that most ICSID proceedings would adjudicate rights under domestic law, whether based on specific contracts with a host state or on broader investment promotion legislation.
14. See, e.g., id.
15. But see, e.g., Consultative Meeting of Legal Experts, Addis Ababa (Dec. 16-20, 1963), in 2 HISTORY, supra, at 273-75 (discussion regarding "bilateral [investment] agreements" that "provide for appeals for arbitration by a national of one State in relation to the other State").
16. See, e.g., North American Free Trade Agreement, U. S.-Can.-Mex., art. 1139, Dec. 17, 1992, 107 Stat. 2057, 32 I. L. M. 605 (1993) [hereinafter NAFTA];
17. Agreement among the Governments of Brunei Darussalam, Indonesia, Malaysia, Philippines, Singapore, and Thailand for the Promotion and Protection of Investments, Dec. 15, 1987 (as amended and enlarged by later agreement) ;
18. The Southern Common Market (MERCOSUR) : Protocol of Colonia for the Promotion and the Reciprocal Protection of Investments in the MERCOSUR, MERCOSUR/CMC/DEC No. 11/94 (Jan. 17, 1994), available at http://www.cvm.gov. br/ingl/inter/mercosul/coloni-e.asp.
19. For a more in-depth survey of typical BIT protections
20. see RUDOLF DOLZER & MARGARETE STEVENS, BILATERAL INVESTMENT TREATIES (1995).
21. Also critical to the scheme are two features typical of BITs: (1) a dispute settlement clause in which states provide ex ante consent to direct arbitration with any investor who alleges violations of the BIT's substantive provisions, and (2) a waiver of the requirement that individuals exhaust their domestic remedies before asserting legal claims in an international forum.
22. See generally JAN PAULSSON, DENIAL OF JUSTICE IN INTERNATIONAL LAW (2005). States may incorporate these features into contracts and investment legislation as well.
23. Convention on the Settlement of Investment Disputes between States and Nationals of Other States, Oct. 17, 1966, 575 U. N. T. S. 159. There are currently 156 ICSID Convention signatories, of which 144 have deposited instruments of ratification. ICSID, Member States, http://icsid.worldbank.org/ ICSID/FrontServlet?requestType=CasesRH&actionVal=SHowHome&pageName= MemberStates-Home.
24. Formulation of the Convention on the Settlement of Investment Disputes between States and Nationals of other States, in 1 HISTORY OF THE CONVENTION ON THE SETTLEMENT OF INVESTMENT DISPUTES BETWEEN STATES AND NATIONALS OF OTHER STATES 2 (1970) [hereinafter 1 HISTORY] ("[I]f the plans established for the growth in the economies of the developing countries were to be realized, it would be necessary to supplement the resources flowing to these countries from bilateral and multilateral governmental sources by additional investments originating in the private sector.").
25. Report of the Executive Directors of the International Bank for Reconstruction and Development on the Convention on the Settlement of Investment Disputes between States and Nationals of Other States, Mar. 18, 1963, ¶ 9 [hereinafter Report of the Executive Directors];
26. see also, P. P. Sutherland, The World Bank Convention on the Settlement of Investment Disputes, 28 I NT'L & C OMP. L. Q. 367 (1979) (discussing impetus for ICSID).
27. For a classic critique of the investment regime from this perspective
28. see M. SORNARAJAH, THE INTERNATIONAL LAW ON FOREIGN INVESTMENT (2d ed. 2004).
29. ICSID Convention, supra note 13, art. 25 (1).
30. See, e.g.. Consultative Meeting of Legal Experts, Addis Ababa (Dec. 16-20, 1963), in 2 HISTORY, supra note 9, at 256 (Uganda) ("[T]he effect of [the Convention] would be to place nationals on a par with States. That represented a departure from customary international law and was a step which should not be taken lightly.") ;
31. Consultative Meeting of Legal Experts, Addis Ababa (Dec. 16-20, 1963), in 2 HISTORY, supra note 9, at 293 (Togo) ;
32. Consultative Meeting of Legal Experts, Santiago (Feb. 3-7, 1964), in 2 HISTORY, supra note 9, at 305 (Chile) ;
33. Consultative Meeting of Legal Experts, Bangkok (Apr. 27-May 1, 1964), in 2 History, supra note 9, at 501 (Ceylon) ;
34. Consultative Meeting of Legal Experts, Geneva (Feb. 17-22, 1964), in 2 HISTORY, supra note 9, at 393-94 (South Africa) ;
35. Consultative Meeting of Legal Experts, Geneva (Feb. 17-22, 1964), in 2 HISTORY, supra note 9, at 403 (Broches) (stating that "the most important juridical innovation introduced by the Convention" was elevating individual rights against states to the international plane). For a range of perspectives on the revolution of the individual in international law more generally
36. see, e.g., Theodor Meron, The Humanization of International Humanitarian Law, 94 A M. J. INT'L L. 239 (2000) ;
37. Jonathan I. Charney, Transnational Corporations and Developing Public International Law, D UKE L. J. 748 (1983) ;
38. cf. ANNE-MARIE SLAUGHTER, A NEW WORLD ORDER (2004) (discussing the "disaggregated state").
39. Insisting all the while, of course, that there is no doctrine of stare decisis in international law. This tension between rhetorical rejection of binding precedent and de facto adherence to stare decisis is a typical feature of international adjudication.
40. Set, e.g., MOHAMED SHAHABUDDEEN, PRECEDENT IN THE WORLD COURT (1996) ;
41. Raj Bhala, The Precedent Setters: De Facto Start Decisis in WTO Adjudication, 9 J. T RANSNAT'L L. & P OL'Y 1 (1999).
42. ICSID Convention, supra note 13, art. 52 (1) (limiting annulment review to challenges claiming, for example, that the Tribunal "manifestly exceeded its powers, " was subject to "corruption, " or "railed to state the reasons" for its decision).
43. See e.g., Agreement on Encouragement and Reciprocal Protection of Investments between the Government of the Republic of Malawi and the Government of the Kingdom of the Netherlands, Malawi-Neth., art. 9, Dec. 11, 2003, available at http://www.unctad.org/sections/dite/iia/docs/bits/netherlands- malawi.pdf;
44. Agreement between the Republic of Austria and Malaysia for the Promotion and Protection of Investments, Austria-Malay., art. 9 (2), Apr. 12, 1985, available at http://www.unctad.org/sections/dite/iia/docs/bits/austria-malaysia. pdf;
45. 9Agreement between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the Republic of Moldova for the Protection and Promotion of Investments, U. K.-Mold., art. 8 (1), Mar. 19, 1996, 2067 U. N. T. S. 175;
46. Agreement Between the Government of Mongolia and the Government of the Republic of Singapore on the Protection and Promotion of Investments, Mong.-Sing., art. 13 (2), Jul. 24, 1995, available at http://www.unctad.org/ sections/dite/iia/docs/bits/mongolia-singapore.pdf;
47. Treaty between the Federal Republic of Germany and the Republic of Namibia concerning the Encouragement and Reciprocal Protection of Investments, F. R. G.-Namib., art. 11 (2), Jan. 21, 1994, available at http://www.unctad.org/ sections/dite/iia/docs/bits/germany-namibia.pdf;
48. Agreement on Encouragement and Reciprocal Protection of Investments between the Kingdom of the Netherlands and the Republic of Belarus, Neth.-Belr., art. 9, Apr. 11, 1995, 1941 U. N. T. S. 213;
49. Agreement between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of Malaysia for the Promotion and Protection of Investments, U. K.-Malay., art. 7, May 21, 1981, 16 U. N. T. S. 5 [hereinafter U. K.-Malay. BIT].
50. ICSID Convention, supra note 13, art. 54 (1) ;
51. see also Ibrahim Shihata, Towards a Greater Depoliticization of Investment Disputes: The Roles of ICSID and MlGA, 1 F OREIGN INVESTMENT L. J. 1, 8 (1986) ("This simple procedure eliminates the problems of the recognition and enforcement of foreign arbitral awards, which subsist in domestic laws and under other international conventions.").
52. Roger P. Alford, Federal Courts, International Tribunals, and the Continuum of Deference, 43 V IRGINIA J. INT'L L. 675, 692 (2005). On the suggestion that domestic "compliance constituencies" are crucial to the enforcement powers of international tribunals, see for example, L EGALIZATION AND WORLD POLITICS (Judith Goldstein et al. eds., 2001) ;
53. Catherine Powell, The Role of Transnational Norm Entrepreneurs, 5 T HEORETICAL INQ. L. 47 (2004).
54. ICSID Convention, supra note 13, art. 55 (stipulating that the Convention does not derogate from existing law relating to sovereign immunity from execution). For an excellent summary of the legal and practical challenges in executing ICSID awards
55. see Andrea Bjorklund, State Immunity and the Enforcement of Investor-State Arbitral Awards, in I NTERNATIONAL INVESTMENT LAW FOR THE 21ST CENTURY: ESSAYS IN HONOR OF CHRISTOPH SCHREUER 302, 304 (Binder et al. eds., 2009) (concluding that a sufficiently persistent investor "can very likely execute his arbitral award against commercial assets of a State, assuming he is able to locate those assets").
56. ICSID Convention, supra note 13, art. 54 (3) ;
57. see, e.g.. Fed. R. Civ. P. 60 (b) (permitting federal courts, in exceptional circumstances, to refuse to recognize final judgments in cases of, for example, fraud or newly discovered evidence) ;
58. Edward Baldwin et al., The Arbitration Risk Facing Sovereign Investors, 23 I NT'L FIN. L. REV. 22 (2004) (suggesting that most domestic law provisions for reopening final judgments are very narrow).
59. The United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the "New York Convention") permits domestic court systems to refuse to enforce commercial arbitral awards in a variety of circumstances, including where the award is contrary to public policy or relates to a subject matter "not capable of settlement by arbitration under the law of that country." United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 71 (May-June 1958).
60. Cf. Amerasinghe, The International Centre for Settlement of Investment Disputes and Development through the Multinational Corporation, 9 V AND. J. TRANSNAT'L L. 793, 8 15 (1976) (noting that ICSID "goes beyond customary international law and the New York Convention" in eliminating even an ordre public exception to enforcement) ;
61. see also Consultative Meeting of Legal Experts, Geneva (Feb. 17-22, 1964), in 2 History, supra note 9, at 426 (Broches) ("The question [was]... of limiting the grounds for attacking awards. Those grounds were limited by the Geneva and New York Conventions and the present Convention sought to limit them still further.") ;
62. DOLZER & STEVENS, supra note 11, at 11 n. 35 ("Although many [bilateral treaties that preceded the BIT-ICSID regime] contained references to arbitration, these provisions were generally inadequate and offered little in the way of effective dispute resolution mechanisms").
63. Consultative Meeting of Legal Experts, Geneva (Feb. 17-22, 1964), in 2 HISTORY, supra note 9, at 427 (Norway) (questioning the necessity of the provision) ;
64. see also id (United Kingdom) ("The acceptance of foreign awards without the right to attack them would be a new departure.. [and] should be accepted regardless of the fact that on paper it appeared a strange innovation. ") ;
65. Consultative Meeting of Legal Experts, Bangkok (Apr. 27-May 1, 1964), in 2 HISTORY, supra note 9, at 466 (Thailand) (enforcement provisions "went far beyond the normal universal practice of States") ;
66. Consultative Meeting of Legal Experts, Addis Ababa (Dec. 16-20, 1963), in 2 HISTORY, supra note 9, at 272 (Broches) (This "special feature of the Convention... went beyond any known forms of recognition of foreign judgments in requiring that the award of a tribunal be treated as final.").
67. Consultative Meeting of Legal Experts, Geneva (Feb. 17-22, 1964), in 2 HISTORY, supra note 9, at 379;
68. see also Consultative Meeting of Legal Experts, Bangkok (Apr. 27-May 1, 1964), in 2 HISTORY, supra note 9, at 522
69. (Jordan) (recognizing that Convention created direct enforcement against states in domestic court) ; Consultative Meetings of Legal Experts, Geneva (Feb. 17-22, 1964), in 2 HISTORY, supra note 9, at 429 (Austria) ;
70. id. at 430 (Netherlands) ;
71. Report of Working Group VI on Recognition and Enforcement of Awards (Dec. 8, 1964), in 2 HISTORY, supra note 9, at 892;
72. see also Consultative Meeting of Legal Experts, Addis Ababa (Dec. 16-20, 1963), in 2 HISTORY, supra note 9, at 273 (Dahomey) ("wish[ing] to be assured that once an award was binding it would be enforced... [against] the losing state").
73. Id. at 272.
74. ICSID Convention, supra note 13, art. 25 (1).
75. While ICSID's nationality requirements have traditionally not been the subject of much litigation, tribunals are increasingly confronting that issue, especially in the context of veil piercing and the corporate form. E.g., TSA Spectrum de Arg., S. A. v. Argentine Republic, ICSID Case No. ARB/05/05 (Dec. 19, 2008) ;
76. Micula v. Romania, ICSID Case No. ARB/05/20, Decision on Jurisdiction and Admissibility (Sept. 24, 2008) ;
77. Tokios Tokeles v. Ukraine, Decision on Jurisdiction, ICSID Case No. ARB/02/18 (Apr. 29, 2004), reprinted in 20 ICSID Rev.-FILJ 205 (2005) ;
78. Rompetrol Group, N. V. v. Romania, ICSID Case No. ARB/06/3, Decision on Jurisdiction and Admissibility (April 18, 2008) ;
79. cf. Barcelona Traction, Light & Power Ltd. (Belgium v. Spain), 1970 I. C. J. 3 (Feb. 5, 1970). The requirement that the matter submitted constitute a "legal dispute" that "aris[es] directly out of" an investment is even less frequently a significant issue.
80. See, e.g., Amco Asia, Inc. v. Indonesia, ICSID Case No. ARB/81/1, Decision on Jurisdiction, (1983), reprinted in 23 I. L. M. 351 (1984) ;
81. Pierre Lalive, The First World Bant Arbitration (Holiday Inns v. Morocco)-Some Legal Problems, 51 B RIT. Y. B. INT'L L. 123, 127-28 (1980) (discussing Holiday Inns v. Morocco, ICSID Case No. ARB/72/1) ;
82. William Rand et al., ICSID's Emerging Jurisprudence: The Scope of ICSID's Jurisdiction, 19 N. Y. U. J. I NT'L L. & P OL. 33, 40 (1986) (discussing Klöckner v. Cameroon, ICSID Case No. ARB/81/2).
83. See, e.g., Ibrahim Shihata & Antonio Parra, The Experience of the International Centre for Settlement of Investment Disputes, 14 F OREIGN INVESTMENT L. J. 299, 302 n. 12 (citing Swiss Aluminium v. Iceland, ICSID Case No. ARB/83/1, and Compañia del Desarrollo v. Costa Rica, ICSID Case No. ARB/96/1).
84. See, e.g., Impreglio v. Islamic Republic of Pakistan, ICSID Case No. ARB/03/3, Decision on Jurisdiction, ¶ 108 (Apr. 22, 2005) ;
85. Lanco Int'l v. Argentine Republic, ICSID Case No. ARB/97/6, Preliminary Decision on Jurisdiction, ¶¶ 42-43 (Dec. 8, 1998), reprinted in 40 I. L. M. 457 (2001). While the ICSID drafters expected most controversies to arise out of contractual arbitration clauses, they also contemplated a two-step "open offer" consent process, albeit in the context of domestic investment promotion legislation.
86. See Report of the Executive Directors, supra note 15, ¶ 24 ("Nor does the Convention require that the consent of both parties be expressed in a single instrument.").
87. See, e.g., Gruslin v. Malaysia, ICSID Case No. ARB/99/3, Award, ¶¶ 135-13.6 (Nov. 27, 2000), reprinted in 5 ICSID R EP. 483 (2006) ;
88. Lanco Int'l, Inc. v. Argentine Republic, ICSID Case No. ARB/97/6, Preliminary Decision on Jurisdiction, ¶ 48 (Dec. 8, 1998), reprinted in 40 I. L. M. 457 (2001).
89. See, e.g., Tokios Tokeles v. Ukraine, ICSID Case No. ARB/02/18, Decision on Jurisdiction, ¶ 39 (Apr. 19, 2004) ;
90. Enron v, Argentine Republic, ICSID Case No. ARB/01/3, Decision on Jurisdiction, ¶ 44 (Jan. 14, 2004), reprinted in 11 ICSID REP. 273 (2007) ;
91. Československa Obchodní Banka (CSOB) v. Slovak Republic, ICSID Case No. ARB/97/4, Decision on Objections to Jurisdiction, ¶ 68 (May 24, 1999), reprinted in 14 ICSID Rev.-FILJ 251 (1999). For similar suggestions in the commentary
92. see C. F. Amerasinghe, The Jurisdiction of the Centre for the Settlement of Investment Disputes, 19 I NDIAN J. INT'L L. 166, 180 (1979) ;
93. Aron Broches, The Convention on the Settlement of Investment Disputes Between States and Nationals of Other States, 136 R ECUEIL DES COURS 331, 362 (1972).
94. See, e.g., Georges Delaume, ICSID and the Transnational Financial Community, F OREIGN INVESTMENT L. J. 37, 242 (1986) (discussing sales of services) ;
95. Rand, supra note 33, at 36 (discussing ordinary sales contracts) ;
96. Shihata & Parra, supra note 34, at 308 (1999).
97. But see Paul Szasz, A Practical Guide to the Convention on the Settlement of Investment Disputes, 1 C ORNELL INT'L L. J. 1, 15 (1968) (World Bank Group staffer agnostic whether jurisdiction extends to sales contracts).
98. Perhaps the best description of the marginal limits imposed by this approach comes from the tribunal in Fedax v. Venezuela, which contrasted the debt instruments in that case to "short-term, " "occasional" arrangements in the nature of "volatile capital, " yielding only "quick gains" and then followed by "immediat[e]" departure from the host country, which might not qualify as an investment. Fedax v. Republic of Venezuela, ICSID Case No. ARB/96/3, Decision of the Tribunal on Objections to Jurisdiction, ¶ 43 (July 11, 1997)
99. reprinted in 37 I. L. M. 1378 (1998). Interestingly, Fedax appears to have been the first case to mention the analytical factors now relied on by the restrictive approach.
100. See infra note 55. But its application of them was deferential in the extreme.
101. Generation Ukr. v. Ukraine, ICSID Case No. ARB/00/9, Award, §§ 6.1, 6.5, 11.1 (Sept. 16, 2003), reprinted in 44 I. L. M. 404 (2005).
102. SGS Société Générale de Surveillance v. Phillipines, ICSID Case No. ARB/02/6, Decision on Objections to Jurisdiction, ¶¶ 13, 99-107 (Jan. 29, 2004)
103. reprinted in 8 ICSID REP. 518 (2005).
104. Lalive, supra note 33, at 127 (discussing Holiday Inns v. Morocco, ICSID Case No. ARB/72/1).
105. Lanco Int'l, Inc. v. Argentine Republic, ICSID Case No. ARB/97/6, Preliminary Decision on Jurisdiction, ¶¶ 4-5, 15 (Dec. 8, 1998)
106. reprinted in 40 I. L. M. 457 (2001).
107. Gruslin v. Malaysia, ICSID Case No. ARB/99/3, Award, ¶ 8.1 (Nov. 27, 2000)
108. reprinted in 5 ICSID R EP. 483 (Edward Helgeson ed., 2006).
109. Tokios Tokeles v. Ukraine, ICSID Case No. ARB/02/18, Decision on Jurisdiction, ¶¶ 2, 78 (Apr. 29, 2004)
110. reprinted in 20 ICSID REV.-FILJ 205 (2005).
111. Fedax v. Republic of Venezuela, ICSID Case No. ARB/96/3, Decision of the Tribunal on Objections to Jurisdiction, ¶ 43 (July 11. 1997)
112. reprinted in 37 I. L. M. 1378 (1998) ;
113. Fedax v. Republic of Venezuela, ICSID Case No. ARB/96/3, Award, ¶ 32 (Mar. 9, 1998)
114. reprinted in 37 I. L. M. 1391 (1998).
115. See, e.g., Tokios Tokeles v. Ukraine, ICSID Case No. ARB/02/18, Decision on Jurisdiction, ¶ 82 (Apr. 29, 2004)
116. reprinted in 20 ICSID REV.-FILJ 205 (2005) ;
117. Československa Obchodnf Banka (CSOB) v. Slovak Republic, ICSID Case No. ARB/97/4, Decision of the Tribunal on Objections to Jurisdiction, ¶¶ 64, 66 (May 24, 1999)
118. reprinted in 14 ICSID REV.-FILJ 251 (1999) ;
119. Fedax v. Republic of Venezuela, ICSID Case No. ARB/96/3, Award on Jurisdiction, ¶ 31 (July 11, 1997)
120. reprinted in 37 I. L. M. 1391 (1998) ;
121. Camuzzi Int'l v. Argentine Republic, ICSID Case No. ARB/03/2, Decision on Objections to Jurisdiction, ¶ 58 (May 11, 2005) ;
122. Mihaly Int'l Corp. v. Democratic Socialist Republic of Sri Lanka, ICSID Case No. ARB/00/2, Award, ¶¶ 33, 49 (Mar. 15, 2002)
123. reprinted in 41 I. L. M. 867 (2002) ;
124. Biwater Gauff (Tanz.), Ltd. v. United Republic of Tanzania, ICSID Case No. ARB/05/22, Award, ¶ 312 (July 24, 2008) ;
125. cf. TSA Spectrum de Arg., S. A. v. Argentine Republic, ICSID Case No. ARB/05/05, Award, ¶¶ 8-10 (Dec. 19, 2008) (Aldonas, dissenting) (discussing question of foreign control for Article 25 (2) (b) purposes).
126. See, e.g., Parkerings-Compagniet v. Republic of Lithuania, ICSID Case No. ARB/05/8, Award, ¶¶ 249-54 (Aug. 14, 2007) ;
127. M. C. I. Power Group, L. C. v. Republic of Ecuador, ICSID Case No. ARB/03/6, Award, ¶¶ 159-61 (July 26, 2007) ;
128. SGS Société Générale de Surveillance v. Republic of the Philippines, ICSID Case No. ARB/02/6, Decision of Tribunal on Objections to Jurisdiction, ¶¶ 48, 49, 112 (Jan. 29, 2004) ;
129. Azurix Corp. v. Argentine Republic, ICSID Case No. ARB/01/12, Decision on Jurisdiction, ¶¶ 65-66 (Dec. 8, 2003)
130. reprinted in 43 I. L. M. 262 (2004).
131. For real and tangible personal property, there is essentially no inquiry into the nature or value of an asset; it is sufficient to own it. For activities and contractual rights, there is a highly deferential inquiry into whether the activity or relationship is plausibly economic.
132. ABRAM CHAYES & ANTONIA CHAYES, THE NEW SOVEREIGNTY: COMPLIANCE WITH INTERNATIONAL REGULATORY AGREEMENTS 26-28 (1995) (suggesting a relational understanding of "sovereignty" as the capacity to make binding commitments on the international plane and thereby participate as a coequal member of the international community) ;
133. see also Case of the S. S. "Wimbledon" (U. K., Fr., Italy & Japan v. F. R. G.) 1923 P. C. I. J. (ser. A.) No. 1, Part IV. A (Aug. 17) ("No doubt any convention creating an obligation of this kind places a restriction upon the sovereign rights of the State, in the sense that it requires them to be exercised in a certain way. But the right of entering into international engagements is an attribute of State sovereignty.").
134. CHRISTOPH SCHREUER, THE ICSID CONVENTION: A COMMENTARY (2001) [hereinafter S CHREUER I]. Schreuer's factors had roots in earlier commentary, but his treatise was the first to draw them out in substantial analytical detail.
135. See, e.g., C. F. Amerasinghe, supra note 37, at 181 (discussing "duration, " "regularity of profit or return, " and "profit motive" as "relevant factors") ;
136. Alcoa Minerals of Jam., Inc. v. Jamaica, ICSID Case No. ARB/74/2 (July 26, 1975), excerpted in 4 YEARBOOK COMMERCIAL ARBITRATION 206, 206-08 (1979) (similar). A second edition of the treatise has just been published; its expanded discussion of this question is addressed below.
137. See CHRISTOPH SCHREUER, LORETTA MALINTOPPI, AUGUST REINISCH, AND ANTHONY SINCLAIR, THE ICSID CONVENTION: A COMMENTARY (2d ed. 2009) [hereinafter S CHREUER II].
138. SCHREUER I, supra note 50, art. 25, ¶ 122 (emphasis deleted). Adherents describe this as the "objective" definition of investment in order to distinguish it from the deferential approach, which they describe as "subjective" because it accepts the parties' definition of investment.
139. Id.
140. It is here that misunderstanding of ICSID history has likely played the greatest role. These tribunals assume that the drafters' failure to define investment arose from a practical inability to enunciate precisely their common and limited vision of "investment." On this view, the deferential approach looks like a sloppy abdication of tribunals' responsibility to exercise their delegated definitional authority. See infra Part II. B.
141. I am not suggesting that stiffening the jurisdictional test is a necessary response under these circumstances-tribunals could just as well ratchet back the underlying substantive law and indeed may be doing so in some cases. But as discussed below, it seems likely to me that tribunals' inchoate impulse to draw back in the face of a growing backlash against investment law is at least one motivating force behind the rise of restrictive jurisdiction.
142. Salini Costruttori, S.p. A. v. Kingdom of Morocco, ICSID Case No. ARB/00/4, Decision on Jurisdiction Quly 23, 2001), reprinted in 42 I. L. M. 609 (2003). Schreuer's factors were actually first cited in Fedax v. Venezuela on the basis of one of his prior articles on the subject.
143. See Fedax v. Republic of Venezuela, ICSID Case No. ARB/96/3, Decision of the Tribunal on Objections to Jurisdiction, ¶ 43 (July 11, 1997)
144. reprinted in 37 I. L. M. 1378 (1998). Because that tribunal's implementation of Schreuer's factors was so toothless, however, I have classified it here as belonging to the deferential school. And indeed it appears from the second edition of Schreuer's treatise that he sees no incompatibility between his discussion of Article 25 and a genuinely deferential approach-although that deference might not extend so far as this article proposes.
145. See infra text accompanying note 64.
146. Salini Costruttori, S.p. A. v. Kingdom of Morocco, ICSID Case No. ARB/00/4, Decision on Jurisdiction, ¶ 45 (July 23, 2001)
147. reprinted in 42 I. L. M. 609 (2003).
148. Id. 1 52.
149. Id. ¶¶ 52-57 (omitting regularity of profit and return).
150. Id. ¶ 54.
151. E.g., Malaysian Historical Salvors v. Malaysia, ICSID Case No. ARB/05/10, Award on Jurisdiction, ¶ 112 (May 17, 2007) [hereinafter Malaysian Historical Salvors I] (deciding that the risk involved in a venture amounted to mere "commercial risk" as opposed to ICSID-cognizable "investment risk") ;
152. Joy Mining v. Egypt, ICSID Case No. ARB/03/11, Award on Jurisdiction, ¶ 57 (Aug. 6, 2004)
153. reprinted in 44 I. L. M. 73 (2005). The regularity of profit and return is one exception; as Schreuer notes in the second version of his treatise, while it has received some support, most tribunals have not adopted it.
154. SCHREUER II, supra note 50, art. 25, ¶ 157.
155. See Helnan Int'l Hotels, A. S. v. Arab Republic of Egypt, ICSID Case No. ARB 05/19, Decision on Objection to Jurisdiction, ¶ 77 (Oct. 17, 2006) ;
156. Saipem, S.p. A. v. People's Republic of Bangladesh, ICSID Case No. ARB/05/7, Decision on Jurisdiction and Recommendation on Provisional Measures, ¶ 99 (Mar. 21, 2007) ;
157. cf. Malaysian Historical Salvors I, supra note 60, ¶ 106 (e) ("If any of [the Salini factors] are absent, the tribunal will hesitate (and probably decline) to make a finding of "investment.").
158. Salini, by contrast, had at least acknowledged that the factors were "interdependent" and "should be assessed globally." Salini Costruttori, S.p. A. v. Kingdom of Morocco, ICSID Case No. ARB/00/4, Decision on Jurisdiction, ¶ 52 (July 23, 2001)
159. reprinted in 42 I. L. M. 609 (2003) ;
160. see also Jan de Nul, N. V. v. Arab Republic of Egypt, ICSID Case No. ARB/04/13, Decision on Jurisdiction, ¶ 91 (June 16, 2006) (adopting Salini factors as collectively "indicative" of the existence of an investment).
161. See Emmanuel Gaillard, Identify or Define? Reflections on the Evolution of the Concept of Investment in ICSID Practice, in I NTERNATIONAL INVESTMENT LAW FOR THE 21ST CENTURY (2009) (advocating this gloss on Victor Pey Casado v. Chile, ICSID Case No. ARB/98/2, Award (May 8, 2008)) ;
162. L. E. S. I., S.p. A. v. République algérienne démocratique et populaire, ICSID Case No. ARB/05/3, Decision on Jurisdiction (July 12, 2006) ;
163. Consortium Groupement Lesi-Dipenta v. République algérienne démocratique et populaire, ICSID Case No. ARB/03/8, Award for Lack of Jurisdiction (Jan. 10, 2005), reprinted in 19 ICSID REV.-FILJ 426 (2004) ;
164. see also Phoenix Action, Ltd. v. Czech Republic, ICSID Case No. ARB/06/5, Award, ¶ 85 (Apr. 15, 2009) (turning Gaillard's approach into a rebuttable presumption that any economic activity contributes to the domestic economy).
165. For other cases adopting the Salini approach, see IBM World Trade Corp. v. Republic of Ecuador, ICSID Case No. ARB/02/10, Decision on Jurisdiction (Dec. 22, 2003) ;
166. L. E. S. I., S.p. A. v. République algérienne démocratique et populaire, ICSID Case No. ARB/05/3, Decision on Jurisdiction (July 12, 2006) ;
167. Mitchell v. Congo, ICSID Case No. ARB/99/7, Decision on Annulment (Nov. 1, 2006) ;
168. 9Joy Mining v. Arab Republic of Egypt, ICSID Case No. ARB/03/11, Award on Jurisdiction (Aug. 6, 2004), reprinted in 44 I. L. M. 73 (2005).
169. SCHREUER II, supra note 50, art. 25, ¶¶ 171-74 (criticizing the restrictive tribunals' "rigid list of criteria" and emphasizing that "[a] test that turns on the contribution to the host State's development should be treated with particular care" and "be treated with some flexibility.").
170. Mitchell v. Congo, ICSID Case No. ARB/99/7, Decision on Annulment, ¶ 1 (Nov. 1, 2006). News reports suggest that the law firm was targeted because it represented a Canadian mining corporation that was bringing an expropriation claim against the Congo-Kinshasa government.
171. See Investment Treaty News (Nov. 24, 2006), available at http://www.iisd.org/pdf/2006/itn-nov24-2O06.pdf (noting that Mitchell's employees were tried for high treason).
172. Mitchell v. Congo, ICSID Case No. ARB/99/7, Decision on Annulment, ¶ 24 (48) (Nov. 1, 2006) (discussing law firm's physical property, its know-how and goodwill, and its legal "right to exercise its activities" as a going concern) ;
173. see also id ¶ 24 (55) (noting that Mitchell transferred "money and other assets" into the country "which constituted the foundations for his professional activities").
174. Id. ¶ 3.
175. Mitchell v. Congo is all the more remarkable because it arose as an annulment proceeding, which is supposed to involve review solely for major structural failings such as manifest excess of powers or total failure to state reasons. ICSID Convention, art. 52 (1) ;
176. see also supra text accompanying note 19.
177. Mitchell v. Congo, ICSID Case No. ARB/99/7, Decision on Annulment, ¶ 39 (Nov. 1, 2006).
178. Id. ¶¶ 25, 26;
179. see also U. S.-Congo-Kinshasa BIT, supra note 1, art. I (c) ("Investment means every kind of investment..., including equity...; and includes: tangible and intangible property, including all property rights...; a company or... interests in a company or interests in the assets thereof;... licenses and permits issued pursuant to law...; [and]... any right conferred by law or contract, and any licenses and permits pursuant to law.").
180. Malaysian Historical Salvors I, supra note 60, ¶ 9.
181. Id, ¶¶ 132-33.
182. Id., ¶¶ 109, 133.
183. U. K.-Malay. BIT, supra note 21, art. 1 (l) (a) (ii), (iii), (v) (defining investment as "every kind of asset, " including "claims to money or to any performance under contract, " "shares, stock, and debentures of companies, " and "business concessions conferred by law or under contract").
184. Malaysian Historical Salvors I, supra note 60, ¶ 6 ;
185. id., Claimant's Memorial on Jurisdiction, at 6, available at icsid.worldbank.org/ICSID/FrontServlet?requestType=ICSIDPublicationsRH& actionVal=ViewPleadings&PleadingNo=2.
186. Malaysian Historical Salvors I, supra note 60, ¶¶ 110-11.
187. Malaysian Historical Salvors I, supra note 60, ¶ 112 (suggesting obscurely that "the assumption of risk by the salvor [was] inherent in the transaction, rather than a special feature of the Contract which affected the salvor's decision to undertake the project in question").
188. Malaysian Historical Salvors I, supra note 60, ¶ 134.
189. The salvage proceeds were apparently the largest in the history of the salvage industry. Yulia Andreeva, Tbe Tribunal in Malaysian Historical Salvors v. Malaysia Adopts a Restrictive Interpretation of tbe Term "Investment, " 25 J. I NT'L ARB. 503, 506 (2008).
190. Malaysian Historical Salvors I, supra note 60, ¶¶ 136-38.
191. U. K.-Malay. BIT, supra note 21, art. 7.
192. Malaysian Historical Salvors II, supra note 2.
193. Joy Mining v. Arab Republic of Egypt, ICSID Case No. ARB/03/11, Award on Jurisdiction, ¶¶ 15-16 (Aug. 6, 2004)
194. reprinted in 44 I. L. M. 73 (2005).
195. Id. ¶ 55.
196. Id. ¶ 20.
197. Id. ¶ 57.
198. See id. ¶¶ 46-48, 54-55.
199. Id. ¶ 44-45, 54.
200. Id ¶ 55.
201. See id ¶ 55-56.
202. Id. ¶ 56-58.
203. In fact, we may be seeing the beginning of a similar shift away from deference to state definitions of a "national" under Article 25. Compare Rompetrol Group, N. V. v. Romania, ICSID Case No. ARB/06/3, Decision on Jurisdiction and Admissibility, ¶ 80 (Apr. 18, 2008) (recognizing ICSID signatories' "wide latitude to agree on the criteria by which nationality would be determined"), and
204. Tokios Tokeles v. Ukraine, ICSID Case No. ARB/02/18, Decision on Jurisdiction, ¶ 25 (Apr. 29, 2004) (emphasizing "the deference this Tribunal owes" to BIT definition of nationality), with
205. TSA Spectrum de Arg., S. A. v. Argentine Republic, ICSID Case No. ARB/05/05, Award, ¶¶ 133-54, 162 (Dec. 19, 2008) (refusing to defer to BIT definition of nationality).
206. See Phoenix Action, Ltd. v. Czech Republic, ICSID Case No. ARB/06/5, Award, ¶¶ 81-86, 118-33 (Apr. 15, 2009) (adopting Salmi with "supplement[al] analysis") ;
207. Malaysian Historical Salvors I, supra note 60;
208. Saipem, S.p. A. v. People's Republic of Bangladesh, ICSID Case No. ARB/05/7, Decision on Jurisdiction and Recommendation on Provisional Measures (Mar. 21, 2007), reprinted at 22 ICSID REV.-FILJ 100 (2007) ;
209. Mitchell v. Congo, ICSID Case No. ARB/99/7, Decision on Annulment (Nov. 1, 2006) ;
210. Helnan Int'l Hotels v. Arab Republic of Egypt, ICSID Case No. ARB/05/19, Award (July 3, 2008) ;
211. L. E. S. I., S.p. A. v. République algénenne démocratique et populaire, ICSID Case No. ARB/05/3, Award (july 12, 2006) ;
212. Jan de Nul, N. V. v. Arab Republic of Egypt, ICSID Case No. ARB/04/13, Decision on Jurisdiction (June 16, 2006).
213. See Malaysian Historical Salvors II, supra note 2;
214. Biwater Gauff (Tanz.), Ltd. v. United Republic of Tanzania, ICSID Case No. ARB/05/22, Award (July 24, 2008). Several other cases have briefly noted that "investment" is not defined by the ICSID convention and turned to a more careful review of the relevant BIT without adverting to the Article 25 controversy. E.g., Parkerings-Compagniet, A. S. v. Republic of Lithuania, ICSID Case No. ARB/05/8, Award on Jurisdiction and Merits, ¶¶ 249-54 (Sep. 11, 2007) ;
215. M. C. I. Power Group, L. C v. Republic of Ecuador, ICSID Case No. ARB/03/6, Award, ¶¶ 159-61 (July 26, 2007) ;
216. C. M. S. v. Argentine Republic, ICSID Case No. ARB/01/8, Annulment Decision, ¶ 71 (Sept. 27, 2007).
217. Both Biwater and (it appears) the Malaysian Historical Salvors II annulment panel advocate an interpretation of "investment" that would turn on state practice. Where BITs generally recognize a given category of asset or enterprise as an "investment, " Biwater would recognize that category as a jurisdictionally legitimate investment for ICSID purposes as well. The Biwater theory, contrary to early tribunals' deferential approach to this question, suggests that a non-mainstream definition of investment would not receive deference from tribunals for purposes of ICSID jurisdiction. See infra note 209 for a critique of this approach.
218. See, e.g., Devashish Krishan, A Notion of Investment, in I NVESTMENT TREATY ARBITRATION: A DEBATE AND DISCUSSION (T. Grierson ed., 2008) ;
219. Yulia Andreeva, Salvaging or Sinking the Investment? MHS v. Malaysia Revisited, in L AW & P RACTICE OF INT'L COURTS AND TRIBUNALS (2008).
220. But see, e.g., Sébastien Manciaux, Tie Notion of Investment: New Controversies, 9 J. W ORLD INVESTMENT & T RADE 443 (2008) (generally supporting Salini) ;
221. Emmanuel Gaillard, Identify or Define? Reflections on the Evolution of the Concept of Investment in ICSID Practice, in I NTERNATIONAL INVESTMENT LAW FOR THE 2 1ST CENTURY, supra note 24 (supporting narrower version of Salini that does not require a specific showing that the investment contributes to the domestic economy).
222. While one pre-Joy Mining tribunal denied jurisdiction under the contractual definition of investment, its ruling was based on the agreement between the parties, not on a Salini-style assessment of Article 25. Mihaly Int'l Corp v. Democratic Socialist Republic of Sri Lanka, ICSID Case No. ARB/00/2, Award, ¶ 51 (Mar. 15, 2002)
223. reprinted in 41 I. L. M. 867 (2002) (noting that the "Parties could have agreed that the formation of a South Asia Electric Company was to be treated as the starting point of the admitted investment, " but "the facts of the case point to the opposite conclusion").
224. SGS Société" Générale de Surveillance, S. A. v. Islamic Republic of Pakistan, ICSID Case No. ARB/01/13, Decision on Jurisdiction (Aug. 6, 2003).
225. SGS Société Générale de Surveillance, S. A. v. Republic of the Philippines, ICSID Case No. ARB/02/6, Decision on Jurisdiction (Jan. 29, 2004), reprinted in 8 ICSID R EP. 518 (2005).
226. See Helnan Int'l Hotels, A. S. v. Arab Republic of Egypt, ICSID Case No. ARB/05/19, Decision on Objection to Jurisdiction (Oct. 17, 2006) (adopting Salini test).
227. SEDITEX Eng'g v. Democratic Republic of Madagascar, ICSID Case No. CONC/82/1 (1982) (settled before constitution of a commission).
228. Fedax v. Republic of Venezuela, ICSID Case No. ARB/96/3, Decision of the Tribunal on Objections to Jurisdiction, ¶ 43 (July 11, 1997)
229. reprinted in 37 I. L. M. 1378 (1998).
230. Atlantic Triton Co. v. People's Revolutionary Republic of Guinea, ICSID Case No. ARB/84/1, Award, ¶ 13 (Apr. 21, 1986)
231. reprinted in 3 ICSID R EP. 13 (1995) (discussing a contract to equip and operate fishing boats).
232. PSEG Global, Inc. v. Republic of Turkey, ICSID Case No. ARB/02/5, Decision on Jurisdiction, ¶ 18 (June 4, 2004) (discussing a "build-operate-transfer" contract to construct power plant).
233. Československa Obchodní Banka (CSOB) v. Slovak Republic, ICSID Case No. ARB/97/4, Decision on Objections to Jurisdiction, ¶ 283 (May 24, 1999)
234. reprinted in 14 ICSID REV.-FILJ 251 (1999).
235. Fedax v. Republic of Venezuela, ICSID Case No. ARB/96/3, Decision of the Tribunal on Objections to Jurisdiction, ¶ 29 (July 11, 1997)
236. reprinted in 37 I. L. M. 1378 (1998).
237. See, e.g. Lanco Int'l, Inc. v. Argentine Republic, ICSID Case No. ARB/97/6, Preliminary Decision on Jurisdiction, ¶ 10 (Dec. 8, 1998)
238. reprinted in 40 I. L. M. 457, 461 (2001) (18.3% of stock) ;
239. Camuzzi Int'l, S. A. v. Argentine Republic, ICSID Case No. ARB/03/2, Decision on Objections to Jurisdiction, ¶¶ 9, 81 (May 11, 2005) (43.09% of stock) ;
240. Continental Casualty Co. v. Argentine Republic, ICSID Case No. ARB/03/9, Decision on Jurisdiction, ¶¶ 77, 86 (Feb. 22, 2006)
241. reprinted in 2006 WL 462068, at 18, 20.
242. Michael Waibel, Opening Pandora's Box: Sovereign Bonds in International Arbitration, 101 A M. J. INT'L L. 711, 718-32 (2007).
243. CME Czech Rep. (The Netherlands) v. Czech Republic, Award, UNCITRAL Arbitration (Mar. 14, 2003) ;
244. Lauder v. Czech Republic, Award, UNCITRAL Arbitration (Sept. 3, 2001).
245. Political risk insurance may also provide partial hedges for some investors, but it is extremely expensive, subject to highly restricted availability, generally limited in payout, and applicable only to certain forms of risk. See generally, Kenneth W. Hansen, Managing Political Risks in Emerging Market Investment, 18 T RANSNAT'L LAW. 77 (2004) ;
246. Maura B. Perry, A Model for Efficient Foreign Aid: The Case for The Political Risk Insurance Activities of the Overseas Private Investment Corporation, 36 V A. J. INT'L L. 511 (1996). A full discussion of the limitations of political risk insurance is beyond the scope of this paper.
247. See supra note 21 (examples of ICSID-only BITs).
248. See supra text accompanying notes 23-30.
249. Under what is now broadly accepted as customary international law, when a treaty term like "investment" fails to unambiguously demonstrate "the agreement of the parties, " tribunals look to the drafting history and ratification process to discern the parties' intent. See VCLT, supra note 5, art. 32.
250. See also infra Part III. D for further elaboration of how the historical materials discussed in Part II translate into doctrinal interpretation of Article 25.
251. See, e.g., Sébastien Manciaux, The Notion of Investment: New Controversies, 9 J. W. I. T. 443, 445-47 (2008) ;
252. David Sassoon, Convention on Settlement of Investment Disputes, 13 J. Bus. L. 334, 337 n. 5.
253. Cf, e.g., Joel P. Trachtman, The Domain of WTO Dispute Resolution, 40 H ARV. INT'L L. J. 333, 338-44 (1999) (arguing that the WTO Appellate Body was delegated a gap-filling role) ;
254. Michael Van Alstine, Dynamic Treaty Interpretation, 146 U. P A. L. REV. 687 (1998) (simitar argument for U. N. Convention on Contracts for the International Sales of Goods).
255. World Bank General Counsel Aron Broches, for example, noted that the jurisdictional provision was "che only provision of the [draft Convention] to which possibly as many as one-third of the delegations addressed themselves." Regional Consultative Meetings of Legal Experts: Chairman's Report on Issues Raised and Suggestions Made (July 9, 1964), in 2 HISTORY, supra note 9, at 563.
256. Broches' summary of this conflict is especially crisp: [T]wo main trends had emerged; one favored a broad and flexible definition of the scope of the jurisdiction of the Center and would leave it to each State to determine the kind of disputes it would consent to submit to the Center; the other one was in favor of limiting the jurisdiction of the Center only to certain specific types of disputes. Summary Report on Views Expressed on Jurisdiction of the Center (Nov. 30, 1964), in 2 HISTORY, supra note 9, at 831;
257. see also Report of the Chairman of the Legal Committee on Settlement of Investment Disputes (Dec. 23, 1964), in 2 HISTORY, supra note 9, at 936 ("There were two principal approaches to the problem of defining the Scope of the Convention. The first... may be characterized as the 'open' approach which would permit the parties to bring by agreement any investment dispute of a legal character. The other, which may be characterized as a 'closed' approach, would have limited disputes which might have come before the Centre to specific classes.... After lengthy discussions..., the draft reflecting the 'open' approach had obtained both the largest number of votes in favor and the smallest number of votes against.") (emphasis in original).
258. See infra notes 210-227 and accompanying text.
259. The Legal Committee's rules of procedure envisaged that "the Committee would try to reach a consensus on every issue, " that major issues "would be regarded as settled if a substantial majority was obtained, " and that "[i]f the votes on an important issue were fairly evenly divided the conflicting viewpoints would be reported to the Executive Directors" for final decision. Aron Broches, Development of International Law By the International Bank for Reconstruction and Development, 59 A M. SOC'Y INT'L L. PROC. 33, 37 (1965). Broches suggested that "the success of this method is best attested by the fact that I had only two issues of importance to report to the Executive Directors, " neither of which touched on the definition of investment.
260. Id.
261. See, e.g., Aron Broches, Tie Convention on the Settlement of Investment Disputes Between States and Nationals of Other States, 136 R ECUEO. DES COURS 331, 346-47 (1972) ;
262. see also Memorandum of the Meeting of the Committee as a Whole (July 20, 1964), in 2 HISTORY, supra note 9, at 586-93 (debating whether to finalize the Convention at a diplomatic conference of states or in a committee of legal advisors to the World Bank's Executive Directors).
263. 1 HISTORY, supra note 14, at 2 (referencing discussions among the World Bank, Organization for Economic Cooperation and Development, and United Nations Committee on Trade and Economic Development).
264. Working Paper in the form of a Draft Convention (June 5, 1962), in 2 HISTORY, supra note 9, at 19.
265. Working Paper in the form of a Draft Convention, art. IV, § 1 (June 5, 1962)
266. in 2 HISTORY, supra note 9, at 33.
267. Id. at 33-34.
268. Memorandum of the Meeting of the Committee of the Whole, ¶ 4 (Dec. 28, 1962)
269. in 2 HISTORY, supra note 9, at 54 (Broches) ;
270. see also, e.g., Memorandum of the Meeting of the Committee of the Whole, ¶ 38 (Dec. 28, 1962)
271. in 2 HISTORY, supra note 9, at 66 (Bullitt) ;
272. Memorandum of the Meeting of the Committee of the Whole, ¶ 25 (Dec. 28, 1962)
273. in HISTORY, supra note 9, at 65 (Suzuki).
274. Memorandum of the Meeting of the Committee of the Whole, ¶ 52 (June 5, 1963)
275. in 2 HISTORY, supra note 9, at 96 (Khelil) ("While... the Convention should be limited to legal disputes as distinguished from political or commercial disputes,... it would be very difficult to draw the line between the political and legal aspects of a dispute....") ;
276. Memorandum of the Meeting of the Committee of the Whole, ¶ 4 (Dec. 28, 1962)
277. in 2 HISTORY, supra note 9, at 54 (Broches) ("There was the danger that recourse to the services of the Center might in a given situation be precluded because the dispute in question did not precisely qualify under the definition of the convention... These possibilities suggested it was inadvisable to define narrowly the kinds of disputes that could be submitted.").
278. Preliminary Draft of a Convention on the Settlement of Investment Disputes between States and Nationals of Other States, art. II, § 1 (Oct. 15, 1963)
279. in 2 HISTORY, supra note 9, at 202 (emphasis added).
280. Preliminary Draft of a Convention on the Settlement of Investment Disputes between States and Nationals of Other States, art. II cmt. 4 (Oct. 15, 1963)
281. in 2 HISTORY, supra note 9, at 203;
282. see also Consultative Meeting of Legal Experts, Santiago (Feb. 3-7, 1964)
283. in 2 HISTORY, supra note 9, at 322 (Broches) (explaining that this formulation "was the result of compromise between two positions, the first being that the reference need only be to investment disputes, and the second that there should be a precise definition of an investment dispute").
284. Preliminary Draft of a Convention on the Settlement of Investment Disputes between States and Nationals of Other States, an. II, § 3 cmt. 4 (Oct. 15, 1963)
285. in 2 HISTORY, supra note 9, at 204.
286. See Regional Consultative Meetings of Legal Experts: Chairman's Report on Issues Raised and Suggestions Made, ¶ 40 (July 9, 1964)
287. in 2 HISTORY, supra note 9, at 565 (conceding later in the process that this had been "somewhat unfortunate phraseology").
288. See Consultative Meeting of Legal Experts, Addis Ababa (Apr. 30, 1964), in 2 HISTORY, supra note 9, at 236;
289. Consultative Meeting of Legal Experts, Santiago (June 12, 1964), in 2 HISTORY, supra note 9, at 298;
290. Consultative Meeting of Legal Experts, Geneva (June 1, 1964), in 2 HISTORY, supra note 9, at 367
291. Consultative Meeting of Legal Experts, Bangkok (July 20, 1964), in 2 HISTORY, supra note 9, at 458;
292. see also Memorandum of the Discussion by the Executive Directors (Sept. 20, 1963), in 2 HISTORY, supra note 9, at 174-75 (Woods) (discussing arrangements for four "regional consultative meetings of legal experts, " with invitations issued "only to [World Bank] member countries, to countries that had applied for membership, and to Switzerland with which the Bank maintained a special relationship") ;
293. see generally Regional Consultative Meetings of Legal Experts: Chairman's Report on Issues Raised and Suggestions Made (July 9, 1964), in 2 HISTORY, supra note 9, at 557-58 (describing procedure and practices at Consultative Meetings).
294. Whatever force this critical perspective may have, the developing and developed worlds do not appear to have been at systematic loggerheads over the fundamental bargain of ICSID itself. As will become apparent below, however, they were certainly at odds on the scope and breadth of its jurisdiction.
295. Latin American countries, whose traditional suspicion of international arbitration as an incursion on state sovereignty was longstanding, were (with some exceptions) the most notable bloc of Convention skeptics. See, e.g.. Consultative Meeting of Legal Experts, Santiago (June 12, 1964), in 2 HISTORY, supra note 9, at 305-11
296. (skeptical expressions by Brazil, Argentina, Bolivia, Venezuela, Guatemala, Ecuador, Colombia) ; Memorandum of the Meeting of the Committee of the Whole (June 5, 1963), in 2 HISTORY, supra note 9, at 92-93 (Broches) ("The clearest opposition to [creating a Convention] came from those Directors representing Latin American countries.") ;
297. Consultative Meeting of Legal Experts, Santiago (June 12, 1964), in 2 HISTORY, supra note 9, at 309 (Venezuela) (referencing with apparent dismay the "tone of some of the statements, " which "did not augur well for the meeting, " and reminding fellow delegates that they "were jurists"). None of them signed the Convention when it was first promulgated, although many eventually did. Guyana, a former British colony that became independent in 1966, was the only country in South or Central America to sign before 1981. ICSID, List of Contracting States and Other Signatories, http://icsid.worldbank.org/ICSID/FrontServlet?requestType=ICSIDDocRH&action Val=ShowDocument&language=Engiish (last visited July 29, 2009).
298. Consultative Meeting of Legal Experts, Addis Ababa (Apr. 30, 1964), in 2 HISTORY, supra note 9, at 244 (Guinea) ;
299. see also Consultative Meeting of Legal Experts, Addis Ababa (Apr. 30, 1964), " in 2 HISTORY, supra note 9, at 287 (Central African Republic) ;
300. Consultative Meeting of Legal Experts, Addis Ababa (Apr. 30, 1964), in 2 HISTORY, supra note 9, at 243-46 (noting support from Ethiopia, Nigeria, Dahomey, Ghana, Malagasy Republic) ;
301. Consultative Meeting of Legal Experts, Santiago (June 12, 1964), in 2 HISTORY, supra note 9, at 305-06, 364 (noting support from Chile, Honduras, Costa Rica) ;
302. Consultative Meeting of Legal Experts, Bangkok (July 20, 1964), in 2 HISTORY, supra note 9, at 468-73 (noting support from Nepal, Israel, Lebanon, Japan) ;
303. see also, e.g.. Consultative Meeting of Legal Experts, Bangkok (July 20, 1964), in 2 HISTORY, supra note 9, at 547, 550 (noting support from Viet Nam, Saudi Arabia) ;
304. Comments and Observations of Member Governments (Nov. 23, 1964), in 2 HISTORY, supra note 9, at 651 (support from Sudan at Legal Committee).
305. World Bank representatives expressed measured but happy surprise at the breadth of international support. Extracts from Statement by Mr. Broches Regarding the African Regional Meeting Held in Addis Ababa, Ethiopia (Jan. 17, 1964), in 2 HISTORY, supra note 9, at 298 ("The need for an instrument of the character of our draft was recognized. Nobody found anything radically wrong with it... [I]t was more constructive and more helpful and encouraging than I had dared to expect.") ;
306. Memorandum from the President to the Committee of the Whole, ¶ 4 (June 10, 1964)
307. in 2 HISTORY, supra note 9, at 554 ("[O]nly a relatively small minority had objections of principle to the basic idea of establishing facilities for international conciliation and arbitration. ") ;
308. Memorandum of the Meeting of the Committee of the Whole (Aug. 4, 1964), in 2 HISTORY, supra note 9, at 597 (Machado) ("He had been surprised when at the [Latin American regional] meeting in Santiago... there had been recognition of and praise for the idea of the Center, and many of the delegates had become intrigued.").
309. E.g., Consultative Meeting of Legal Experts, Bangkok (July 20, 1964), in 2 HISTORY, supra note 9, at 468 (Ceylon) ;
310. id. (Israel) (calling for a "[m]ore precise definition of... 'investment dispute'") ;
311. Consultative Meeting of Legal Experts, Bangkok (July 20, 1964), in 2 HISTORY, supra note 9, at 470 (India) (noting that the lack of a "precise definition of the category of disputes referable to the Center" was "a fundamental weakness") ;
312. Consultative Meeting of Legal Experts, Bangkok (July 20, 1964), in 2 HISTORY, supra note 9, at 474 (Japan) (calling for "a more precise definition of those terms") ;
313. Consultative Meeting of Legal Experts, Addis Ababa (Apr. 30, 1964), in 2 HISTORY, supra note 9, at 259, 261 (Tunisia) ("The types of disputes to be submitted to the Center should" receive "a comprehensive definition").
314. Consultative Meetings of Legal Experts, Geneva (June 1, 1964), in 2 HISTORY, supra note 9, at 396 (France) ("Discrimination in taxation, or even police measures, could adversely affect an investment contract without touching in any way the legal aspects of the contract.") ;
315. see also, e.g., Consultative Meetings of Legal Experts, Geneva (June 1, 1964), in 2 HISTORY, supra note 9, at 395 (South Africa) (suggesting that "no further definition should be sought") ;
316. Consultative Meetings of Legal Experts, Geneva (June 1, 1964), in 2 HISTORY, supra note 9, at 401 (Finland) ("[A] more precise definition... would tend to open the door to frequent disagreements as to the applicability of the Convention. ") ;
317. cf. Consultative Meetings of Legal Experts, Geneva (June 1, 1964), in 2 HISTORY, supra note 9, at 450 (United Kingdom) ("[T]he definition ought to be simple and should say as little as possible in the interests of devising a convention that could serve as a practical instrument for the settlement of as wide a range of disputes as possible.") (discussing the definition of "nationality") ;
318. Consultative Meeting of Legal Experts, Santiago (June 12, 1964), in 2 HISTORY, supra note 9, at 361 (Jamaica) (seeking "to keep the definitions as flexible as possible... [and thus] enable a wide variety of disputes to be brought within the jurisdiction of the Center") (discussing the definition of "nationality").
319. Consultative Meeting of Legal Experts, Geneva (June 1, 1964), in 2 HISTORY, supra note 9, at 401 (suggesting that the term "should be transferred to the Preamble").
320. E.g., Consultative Meetings of Legal Experts, Addis Ababa (Apr. 30, 1964), in 2 HISTORY, supra note 9, at 285-86 (Tunisia) (proposing to define investments as "all categories of property, notably but not exclusively, goods and real estate, the right to participate in organizations, créancts pécuniares, intellectual property rights including industrial property, copyright, and goodwill, and public concessions") ;
321. see also Consultative Meeting of Legal Experts, Bangkok (July 20, 1964), in 2 HISTORY, supra note 9, at 537 (Broches) (describing "an agreed list of transactions that would be regarded as investments, and then... some general residual clause.").
322. E.g., Consultative Meeting of Legal Experts, Bangkok (Apr. 27-May 1, 1964), in 2 HISTORY, supra note 9, at 492-93 (Lebanon) ;
323. Consultative Meeting of Legal Experts, Bangkok (Apr. 27-May 1, 1964), in 2 HISTORY, supra note 9, at 493-94 (India) ;
324. Consultative Meeting of Legal Experts, Bangkok (Apr. 27-May 1, 1964), in 2 HISTORY, supra note 9, at 497-98 (Israel).
325. E.g., Consultative Meeting of Legal Experts, Addis Ababa (Dec. 16-20, 1963), in 2 HISTORY, supra note 9, at 257 (Cameroon) (asking "whether the Center would be competent to decide political questions or merely questions relating to pecuniary matters or private law") ;
326. Consultative Meeting of Legal Experts, Bangkok (Apr. 27-May 1, 1964), in 2 HISTORY, supra note 9, at 500-01 (Ceylon) (suggesting cases of "highly political significance" are "unsuited for settlement on the plane of legal debate").
327. Consultative Meeting of Legal Experts, Bangkok (Apr. 27-May 1 1964), in 2 HISTORY, supra note 9, at 466 (Thailand) ("[A] State, in the ordinary course of exercising government functions, may have to take various broad measures which could affect the interests of foreign investors e.g. measures required to protect the health, morals and welfare of the community, as well as the security of the nation. ") ;
328. Consultative Meeting of Legal Experts, Bangkok (Apr. 27-May 1, 1964), in 2 HISTORY, supra note 9, at 504 (India) ("If... the State... passed a law affecting... the social security legislation or the taxation legislation... could such a measure be challenged on the grounds that it affected the legal right of that investor to the ownership, control or management [of its investment]?").
329. Consultative Meeting of Legal Experts, Geneva (Feb. 17-22, 1964), in 2 HISTORY, supra note 9, at 450 (United Kingdom).
330. Extracts from Statement by Mr. Broches Regarding the African Regional Meeting (Jan. 7, 1964), in 2 HISTORY, supra note 9, at 297 ("[S]ome delegates felt that the term 'investment' should be defined, and... we shall probably in the end have to devise a suitable definition of investment, difficult though it may be.").
331. Draft Convention on the Settlement of Investment Disputes Between States and Nationals of Other States (Sept. 11, 1964), in 2 HISTORY, supra note 9, at 621-22.
332. Draft Convention on the Settlement of Investment Disputes Between States and Nationals of Other States (Sept. 11, 1964), in 2 HISTORY, supra note 9, at 623.
333. See 1 HISTORY, supra note 14, at 8;
334. see also Rules for the Conduct of Proceedings of Legal Committee (Nov. 17, 1964), in 2 HISTORY, supra note 9, at 647.
335. The technical function of the Committee was as an advisory entity that would "prepare a final Committee text for submission to the Executive Directors, " but the Executive Directors rubber stamped most of the Committee's final draft, by and large making only minor changes of a technical character. Memorandum of the President to the Executive Directors (Jan. 4, 1965), in 2 HISTORY, supra note 9, at 942;
336. see also Memorandum from the General Counsel and List of Proposed Changes to the Revised Draft Convention (Jan. 8, 1965), in 2 HISTORY, supra note 9, at 943-52.
337. Summary Proceedings of the Legal Committee Meeting (Nov. 23, 1964), in 2 HISTORY, supra note 9, at 672.
338. Comments and Observations of Member Governments (Nov. 23, 1964), in 2 HISTORY, supra note 9, at 668 (United Kingdom)
339. Summary Proceedings of the Legal Committee Meeting (Nov. 25, 1964), in 2 HISTORY, supra note 9, at 702 (United Kingdom) ("prefer[ring] to have no such definition in the Convention, " as "parties should not be prevented from making arrangements to submit disputes to the Center") ;
340. Summary Proceedings of the Legal Committee Meeting (Nov. 27, 1964), in 2 HISTORY, supra note 9, at 710 (Iran) ("[I]t was not imperative to elaborate too much on the definition. ").
341. Comments and Observations by the Republic of Austria (Nov. 24, 1964), in 2 HISTORY, supra note 9, at 670 ("[I]t should be the goal of the Convention to allow as general an application as possible.") ;
342. Summary Proceedings of the Legal Committee Meeting (Nov. 25, 1964), in 2 HISTORY, supra note 9, at 702 (United Kingdom) ("The parties should not be prevented from making arrangements to submit disputes to the Center.").
343. See, e.g. Summary Proceedings of the Legal Committee Meeting (Nov. 25, 1964), in 2 HISTORY, supra note 9, at 704 (Germany) (proposing definition of investment that includes "property, rights, and interests") ;
344. Summary Proceedings of the Legal Committee Meeting (Nov. 25, 1964), in 2 HISTORY, supra note 9, at 704 (Australia) (proposing to define investment as "every mode or application of money which is intended to return interest for profit") ;
345. Summary Proceedings of the Legal Committee Meeting (Nov. 25, 1964), in 2 HISTORY, supra note 9, at 703 (United States) (proposing to extend the definition of "investment" to mere "transfers" of money and other assets, rather than restricting it to "contributions").
346. Comments and Observations of Member Governments (Nov. 23, 1964), in 2 HISTORY, supra note 9, at 661 (South Africa) ("The definition of 'investment' seems unsatisfactory. Is capital appreciation covered?") ;
347. Comments and Observations of Member Governments (Nov. 23, 1964), in 2 HISTORY, supra note 9, at 668-69 (Viet Nam) ("For instance, we would like to know if under the term investment there would be included, as seems logical,
348. Summary Proceedings of the Legal Committee Meeting (Nov. 25, 1964), in 2 HISTORY, supra note 9, at 702 (United Kingdom).
349. Summary Proceedings of the Legal Committee Meeting (Nov. 25, 1964), in 2 HISTORY, supra note 9, at 701 (Costa Rica) ;
350. see also Summary Proceedings of the Legal Committee Meeting (Nov. 25, 1964), in 2 HISTORY, supra note 9, at 702 (Dahomey) ("The fact that the basis of this jurisdiction is consent should dispel any misgivings on this subject.") ;
351. Summary Proceedings of the Legal Committee Meeting (Nov. 27, 1964), in 2 HISTORY, supra note 9, at 706 (Sweden) ("[B]ecause of the condition of consent, there would be no need for complicated definitions.").
352. The Latin American countries were a special case. By and large their shared postcolonial experience led them to oppose the ICSID enterprise outright. Peru's sole submission at the beginning of the conference, for example, was a list of block quotes from its constitution emphasizing its inability to give special rights to foreign investors. Statement by the Delegation of Peru (Dec. 8, 1964), in 2 HISTORY, supra note 9, at 672 ("[Concessions and contracts with foreign businesses] shall... waive all recourse to diplomatic request... Foreigners shall be on equal terms with Peruvians... and may in no case claim exceptional status.") ;
353. see also Summary Proceedings of the Legal Committee Meeting (Nov. 25, 1964), in 2 HISTORY, supra note 9, at 699 (Venezuela) (observing that Venezuelan constitution prohibited arbitration clauses "in respect of matters connected with public policy" and in particular for any "contracts of public interest" between the government and private persons) ;
354. Comments by Mr. da Cunha (Brazil) on Chapter II (Nov. 30, 1964), in 2 HISTORY, supra note 9, at 838 ("[I]t would be inadmissible... to attempt to raise the Arbitral Tribunal to a super-power capable of changing the internal legislation of the Contracting States... the drafting and enforcement of which are inequivocably [sic] an act of sovereignty.").
355. On the development of Latin America's historical discomfort with arbitration, see generally GARY B. BORN, 1 INTERNATIONAL COMMERCIAL ARBITRATION 54-56 (2009).
356. Comments and Observations of Member Governments (Nov. 23, 1964), in 2 HISTORY, supra note 9, at 652 (China) (criticizing "the loose definition given to the word 'investment'") ;
357. Comments and Observations of Member Governments (Nov. 23, 1964), in 2 HISTORY, supra note 9, at 660 (Thailand) ("U]urisdiction of Center... is too broad even though contracting state [sic] may specify classes of dispute to be submitted to Center.") ;
358. Summary Proceedings of the Legal Committee Meeting (Nov. 27, 1964), in 2 HISTORY, supra note 9, at 707 (Central African Republic) ("[T]he definitions must be precise.") ;
359. Summary Proceedings of the Legal Committee Meeting (Nov. 27, 1964), in 2 HISTORY, supra note 9, at 709 (Niger) ("stress[ing] the need for precise definitions") ;
360. Summary Proceedings of the Legal Committee Meeting (Nov. 27, 1964), in 2 HISTORY, supra note 9, at 709 (Philippines) (finding "the proposed jurisdiction of the Centre too brood").
361. Comments and Observations of Member Governments (Nov. 23, 1964), in 2 HISTORY, supra note 9, at 652-53 (China) ("[T]he jurisdiction of the Center... should not extend to... 'investments' other than those made pursuant to an investment agreement with the host State or in response to special investment promotion legislation. ") ;
362. set also Consultative Meeting of Legal Experts, Geneva (Feb. 17-22, 1964), in 2 HISTORY, supra note 9, at 446 (Italy) (suggesting that ICSID should protect only "investments made pursuant to a particular contract with a State" and "investments made in reliance on [an investment promotion] law of the host country, " since "[p]ersons investing without special incentives in a foreign country did not deserve special protection").
363. Summary Proceedings of the Legal Committee Meeting (Nov. 27, 1964), in 2 HISTORY, supra note 9, at 708 (Portugal).
364. Summary Proceedings of the Legal Committee Meeting (Nov. 27, 1964), in 2 HISTORY, supra note 9, at 707 (Japan) ;
365. Summary Proceedings of the Legal Committee Meeting (Nov. 25, 1964), in 2 HISTORY, supra note 9, at 703 (New Zealand) ;
366. see also Summary Proceedings of the Legal Committee Meeting (Nov. 27, 1964), in 2 HISTORY, supra note 9, at 709 (Austria) (suggesting that "[a] descriptive list might be suitable" in light of the dispute about the scope of "investment").
367. Summary Proceedings of the Legal Committee Meeting (Nov. 25, 1964), in 2 HISTORY, supra note 9, at 700 (Ceylon) (noting that the phrasing "arising out of... [or] connected with any investment... were capable of the widest possible meaning, " yielding "very wide and indefinite authority over the affairs of a sovereign state") ;
368. Summary Proceedings of the Legal Committee Meeting (Nov. 25, 1964), in 2 HISTORY, supra note 9, at 703 (Guatemala) ;
369. Summary Proceedings of the Legal Committee Meeting (Nov. 25, 1964), in 2 HISTORY, supra note 9, at 703 (Tunisia) (suggesting that tribunals should be able only to rule on the valuation of an expropriation, not on its legality per se) ;
370. Summary Proceedings of the Legal Committee Meeting (Nov. 27, 1964), in 2 HISTORY, supra note 9, at 709 (Philippines) (suggesting the elimination of claims based on expropriation).
371. Summary Report on Views Expressed on Jurisdiction of the Center (Nov. 30, 1964), in 2 HISTORY, supra note 9, at 830 (Uganda).
372. Summary Proceedings of the Legal Committee Meeting (Nov. 27, 1964), in 52 HISTORY, supra note 9, at 709 (Philippines) (suggesting eliminating claims based on expropriation and capital flow restrictions).
373. Comments by Mr. da Cunha (Brazil) on Chapter II (Nov. 30, 1964), in 2 HISTORY, supra note 9, at 839.
374. Summary Proceedings of the Legal Committee Meeting (Nov. 27, 1964), in 2 HISTORY, supra note 9, at 707 (Broches).
375. Summary Proceedings of the Legal Committee Meeting (Nov. 27, 1964, Morning), in 2 HISTORY, supra note 9, at 711 (Broches).
376. The working group was chaired by the delegate from Tanzania and included 27 members from all regions of the globe and all levels of economic development. See Report on Scope of Jurisdiction of the Centre, arts. 26, 29 (Dec. 7, 1964)
377. in 2 HISTORY, supra note 9, at 827 (Tanzania, Belgium, Sierra Leone, Germany, Central African Republic, Philippines, United Kingdom, Ivory Coast, Spain, United States, Denmark, Sweden, Dahomey, India, Panama, Greece, Ethiopia, Australia, Peru, Uganda, Guatemala, New Zealand, Norway, Nepal, Finland, Japan, and Netherlands).
378. Report on Scope of Jurisdiction of the Centre, arts. 26, 29 (Dec. 7, 1964)
379. in 2 HISTORY, supra note 9, at 828.
380. Id. (limiting jurisdiction to three categories: (i) disputes involving a contract between the "State and a National of another State"
381. (ii) disputes over specific guarantees made by the state to specific investments" and
382. (iii) disputes to determine the injury suffered by an investor who was harmed when the state broke its own laws).
383. Id at 829.
384. Partly to emphasize that signing the ICSID Convention did not, without more, create jurisdiction over any particular dispute, a different Article of the previous draft had noted that states were free to submit "statement[s]" to the Secretary-General "indicating [the]... classes of dispute within the jurisdiction of the Center which [they] would in principle consider submitting." Draft Convention on the Settlement of Investment Disputes Between States and Nationals of Other States, art. 29 (Sept. 11, 1964)
385. in 2 HISTORY, supra note 9, at 623 (located in Chapter II, "Jurisdiction of the Center").
386. That provision had not been incorporated as a sub-component of the Article actually defining jurisdiction, and it contemplated mere "information" about disputes already within ICSID's jurisdiction that the state "in principle" would consider submitting.
387. Summary Report on Views Expressed on Jurisdiction of the Center (Nov. 30, 1964), in 2 HISTORY, supra note 9, at 830 (Netherlands) ("[I]n order to meet some of the fears expressed by some capital-importing countries, States [should] be allowed to declare... the classes of disputes they would not consider suitable for [submission].") ;
388. set also Consultative Meeting of Legal Experts, Geneva (Feb. 17-22, 1964), in 2 HISTORY, supra note 9, at 412 (Netherlands) ("[S]ignatory States [should have] the right to exclude certain categories of disputes which they might be unwilling to submit to conciliation and arbitration").
389. The Dutch suggestion was an apparently milder version of proposals by developing states at the Working Group to add a jurisdictionally preclusive opt-out to the definition of investment. See, e.g., Draft Submitted by Mr. Bomani (Tanzania) (Dec. 1, 1964), in 2 HISTORY, supra note 9, at 834;
390. Summary Report on Views Expressed on Jurisdiction of the Center (Nov. 30, 1964), in 2 HISTORY, supra note 9, at 831 (India) ;
391. cf. Proposal of Sierra Leone, Philippines, Tanzania, Uganda, Central African Republic, Nepal and India (Dec. 4, 1964), in 2 HISTORY, supra note 9, at 835 (suggesting that the drafters should also adopt "specif[ied] categories of disputes relat[ed] to investment").
392. Summary Proceedings of the Legal Committee Meeting (Dec. 8, 1964), in 2 HISTORY, supra note 9, at 821-22.
393. Summary Proceedings of the Legal Committee Meeting (Dec. 8, 1964), in 2 HISTORY, supra note 9, at 821 (emphasis added) ;
394. see also Summary Report on Views Expressed on Jurisdiction of the Center (Nov. 30, 1964), in 2 HISTORY, supra note 9, at 831 (United States) ("[T]o limit the scope of the Center only to disputes specifically listed would unduly limit the free choice of States. States which did not wish to submit certain disputes to conciliation or arbitration could freely do so by withholding their consent.").
395. See infra Part II. A.5 for a discussion of the three principal mechanisms available to states for tailoring the eligible categories of "investment."
396. Memorandum of the Meeting of the Committee of the Whole (Feb. 16, 1965), in 2 HISTORY, supra note 9, at 972 (Broches).
397. Summary Proceedings of the Legal Committee Meeting (Dec. 8, 1964), in 2 HISTORY, supra note 9, at 821 (U. K. proposal joined by Tanzania, Uganda, United States, Netherlands, Sierra Leone, Denmark, Norway, Finland, Sweden, Nepal, Malaysia, New Zealand, Turkey, Australia, Nigeria, Yugoslavia, Korea, Japan, Liberia, Greece, Germany, Austria, Ivory Coast, Belgium, India, Costa Rica, Lebanon, Iran, and the Malagasy Republic).
398. New Wording of Article 26: Proposal Submitted by the Delegation from Spain (Dec. 4, 1964), in 2 HISTORY, supra note 9, at 841-42 (specifying jurisdiction over disputes (a) arising out of a contract with the state, (b) arising out of specific commitments made by the state to specific investments, such as through investment promotion legislation, and (c) arising out of disagreement over compensation to the investor for the host state's violations of domestic law) ;
399. Summary Proceedings of the Legal Committee Meeting (Dec. 8, 1964), in 2 HISTORY, supra note 9, at 824-25 (amending the Spanish proposal to be illustrative and non-exhaustive).
400. Summary Proceedings of the Legal Committee Meeting (Dec. 8, 1964), in 2 HISTORY, supra note 9, at 826 (requiring that disputes be "of a legal character" and arise "directly" out of investments, and deleting the words "in principle" from the notification provision).
401. Summary Proceedings of the Legal Committee Meeting (Dec. 8, 1964), in 2 HISTORY, supra note 9, at 826. Immediately before the vote, the United Kingdom's proposal was amended by virtually unanimous agreement to require that the dispute arise "directly" out of the investment, and that the dispute be "of legal character."
402. Id. These changes, reflected in the printed version reported out of the Drafting Subcommittee, were the last substantive alterations to the U. K. compromise.
403. See Fourth Interim Report (Dec. 11, 1964), 2 HISTORY, supra note 9, at 879-80.
404. Summary Proceedings of the Legal Committee Meeting (Dec. 8, 1964), in 2 HISTORY, supra note 9, at 826.
405. Legal Committee on Settlement of Investment Disputes, Fourth Interim Report (Dec. 11, 1964), in 2 HISTORY, supra note 9, at 879-80 (submitting proposed text of jurisdictional section) ;
406. Revised Draft of Convention on the Settlement of Investment Disputes Between States and Nationals of Other States (Dec. 11, 1964), in 2 HISTORY, supra note 9, at 918-19.
407. Broches explained to the Executive Directors that Article 25 (1) "represented a compromise between various points of view" and "had been adopted by the Legal Committee by a very substantial majority." Memorandum of the Meeting of the Committee of the Whole (Feb. 16, 1965), in 2 HISTORY, supra note 9, at 972. The only change they ultimately made was to refer to "legal dispute[s]" rather than "dispute[s] of a legal character"-and that only to retain parallel structure with the ICJ Statute and with the Spanish and French versions of the ICSID Convention.
408. See Memorandum from the General Counsel and List of Proposed Changes to the Revised Draft Convention (Jan. 8, 1963), in 2 HISTORY, supra note 9, at 944.
409. Report of the Executive Directors, supra note 15, ¶ 23.
410. Id. ¶ 27.
411. Even so, this abbreviated comment's focus on the procedure of consent comes in significant contrast to the Report's focus on the substance of definitions for other jurisdictional elements. For example, the Report noted that the Article 25 requirement of a "legal dispute" was "used to make clear that while conflicts of rights are within the jurisdiction of the Centre, mere conflicts of interests are not, " and explained that "[t]he dispute must concern the existence or scope of a legal right or obligation, or the nature or extent of the reparation to be made for breach of a legal obligation. " Report of the Executive Directors, supra note 15, ¶ 26. Similarly, the Report discussed the Article 25 limitations on the categories of eligible parties in fairly extensive technical detail.
412. Id. ¶¶ 28-30.
413. Excerpt from the Minutes of the Meeting of the Executive Directors (Mar. 18, 1965), in 2 HISTORY, supra note 9, at 1040.
414. Memorandum of the Meeting of the Committee of the Whole (Mat. 9, 1965), in 2 HISTORY, supra note 9, at 1027.
415. Id.
416. Id. This word choice in the widely promulgated report may bear substantial culpability for modern tribunals' failure to implement the historical agreement.
417. E.g., Memorandum of the Meeting of the Committee of the Whole (Dec. 18, 1962), 2 HISTORY, supra note 9, at 55 (Lieftnick) ;
418. Memorandum of the Meeting of the Committee of the Whole (Dec. 27, 1962), 2 HISTORY, supra note 9, at 67-70 (lengthy colloquy among Directors and Bank staff) ;
419. Consultative Meeting of Legal Experts, Chile (Feb. 5, 1964), 2 HISTORY, supra note 9, at 334 (Nicaragua) (discussing separate section of draft Convention) ;
420. Consultative Meeting of Legal Experts, Thailand (Apr. 29, 1964), 2 HISTORY, supra note 9, at 499 (Israel).
421. Report of the Executive Directors, supra note 15, ¶ 23.
422. ICSID Convention, supra note 13, Preamble.
423. Consultative Meeting of Legal Experts, Bangkok (Apr. 27-May 1, 1964), in 2 HISTORY, supra note 9, at 541 (Broches).
424. If a services contract was not viewed as an investment by the host country, that could be stipulated in the contract-or the issue could be avoided altogether by emphasizing that ICSID was not one of the available forums in the event of a contract dispute. If a bilateral treaty was not intended to cover activity within certain "purely economic" sectors, it could say so in its definition of asset or investment.
425. ICSID Convention, supra note 13, art. 25 (4) (emphasis added).
426. Contracting States and Measures Taken by Them for the Purpose of the Convention, ICSID/8-D (2008), available at http://icsid.worldbank.org/ICSID/ FrontServlet?requestType=ICSIDDocRH&action Val= ContractingMeasures&reqFrom=Main (listing notifications from China, Guyana, Israel, Costa Rica, Guatemala, Ecuador, Jamaica, Papua New Guinea, Saudi Arabia, and Turkey). Guyana and Israel have since withdrawn their notifications.
427. See id.
428. Id.
429. One tribunal held that notifications are "merely informational" and do not qualify the consent given in the treaty. PSEG Global Inc. v. Republic of Turkey, ICSID Case No. ARB/02/5, Decision on Jurisdiction, ¶¶ 137 n. 37, 145 (June 4, 2004) (citing expert opinions by Michael Reisman, Rudolf Dolzer, and Christoph Schreuer). Other tribunals have reached the opposite conclusion in dictum, suggesting that notifications can indeed limit the scope of jurisdiction.
430. See Ceskoslovenska Obchodnf Banka, A. S. v. Slovak Republic, ICSID Case No. ARB/97/4, Decision on Objections to Jurisdiction, ¶ 65 (May 24, 1999)
431. reprinted in 14 ICSID Rev.-FILJ 251 (1999) (suggesting that notifications can limit scope of jurisdiction) ;
432. Alcoa Minerals of Jam., Inc. v. Jamaica, ICSID Case No. ARB/74/2, Decision on Jurisdiction, reprinted in 17 HARV. INT'L L. J. 90, 103 (1976) (notifications can limit consent prospectively).
433. This point was made in one of the final internal World Bank meetings prior to the promulgation of the completed Convention.
434. See Memorandum of the Meeting of the Committee of the Whole (Feb. 16, 1965), in 2 HISTORY, supra note 9, at 973 (Rajan) ("Article 25 (4) was a very important provision and to some extent took care of the [concern about overly broad jurisdiction] raised... by India, and some other countries.... [O]ne reason for the wide support Article 25 as a whole had received in the Legal Committee was the incorporation in it of this provision. ").
435. See, e.g.. Summary Proceedings of the Legal Committee Meeting (Dec. 8, 1964), in 2 HISTORY, supra note 9, at 822 (Philippines) (noting that the U. K. approach permitted "any State... to define the jurisdiction of the Centre along the lines of the Spanish proposal") ;
436. id. (Broches) ("clearly permissible" to limit the jurisdiction of the Centre on a tailored basis in this way) ;
437. Summary Proceedings of the Legal Committee Meeting (Dec. 8, 1964), in 2 HISTORY, supra note 9, at 823 (Italy) ("[T]he British proposal leav[es] it to each state to define which categories of dispute could be submitted to the Centre.") ;
438. cf. Summary Proceedings of the Legal Committee Meeting (Nov. 11, 1964), in 2 HISTORY supra note 9, at 711 (Broches) (stating that a previous version of the notification provision "was added to enable countries to exclude classes of investments, thereby narrowing the scope of the Convention as far as they were concerned").
439. See, e.g., C. F. Amerasinghe, The Jurisdiction of the International Centre for the Settlement of Investment Disputes, 19 INDIAN J. INT'L L. 166, 226 (1979) ;
440. David Sasson, Convention on Settlement of Investment Disputes, 13 J. Bus. L. 334, 334 n. 3 (1965).
441. See, e.g. Summary Report on Views Expressed on Jurisdiction of the Centre (Nov. 30, 1964), in 2 HISTORY, supra note 9, at 831 (India) ("Each Contracting State shall notify to the Centre the class or classes of investment disputes which it would in principle consider submitting.... The Centre shall exercise jurisdiction only over such disputes of the class or classes so notified [and] only if the parties thereto have in writing consented to submit the dispute....") (emphasis added) ;
442. Amendments Proposed by Mr. A. R. Brinas (Philippines) (Nov. 30, 1964), in 2 HISTORY, supra note 9, at 832 (similar) ;
443. Draft Submitted by Mr. Bomani (Tanzania) (Dec. 1, 1964), in 2 HISTORY, supra note 9, at 834 ("A Contracting State may at the time of ratifying the Convention stipulate any class or classes of disputes that it shall exclude from the scope of the facilities of the Centre.").
444. See Summary Proceedings of the Legal Committee Meeting (Dec. 8, 1964), in 2 HISTORY, supra note 9, at 824 (United Kingdom) (responding to Spanish delegate's query about the outcome in the event of "a conflict between a specific consent and a notification [to ICSID] to exclude the type of dispute covered by the specific agreement" by stating that "the specific and particular consent would govern").
445. Although the U. K. delegate had earlier suggested that states "could limit [ICSID's] jurisdiction" via the notification procedure without thereby "oblig[ing other States] to accept [those same] restrictions[,]" his later clarification made it clear that he understood notifications to function as a prospective rule of thumb for interpreting future agreements. Summary Proceedings of the Legal Committee Meeting (Dec. 8, 1964), in 2 HISTORY, supra note 9, at 821.
446. ICSID Convention, supra note 13, art. 25 (4).
447. Fedax v. Republic of Venezuela, ICSID Case No. ARB/96/3, Decision of the Tribunal on Objections to Jurisdiction, ¶ 33 (July 11. 1997), reprinted in 37 I. L. M. 1378 (1998)
448. (suggesting that Article 25 (4) notifications should be used to construe the scope of consent with BITs or contracts) ;
449. see also David A. Lopina, The International Centre for Settlement of Investment Disputes: Investment Arbitration for the 1990s, 4 OHIO ST. J. ON DISP. RESOL. 107, 120 (1988) (advising corporations to "remain alert to any possible future [Article 25 (4)] notification" when "considering upcoming investment options").
450. In Vienna Convention on the Law of Treaties terms, the notification would either be a "supplementary means of interpretation, " VCLT, supra note 5, art. 32, or perhaps an indication of "[a] special meaning" for the BIT's otherwise broad terms, id. art. 31. This approach proceeds from the reasonable premise that fellow ICSID signatories are on constructive notice of Article 25 (4) notifications.
451. See Consultative Meeting of Legal Experts, Addis Ababa (Dec. 16-20, 1963), in 2 HISTORY, supra note 9, at 292 (Sierra Leone) (suggesting amendment on ICJ referral issue to satisfy all parties "so... that it could be ratified without reservations") ;
452. Consultative Meeting of Legal Experts, Addis Ababa (Dec. 16-20, 1963), in 2 HISTORY, supra note 9, at 283 (Broches) (The Secretary-General believed that a reservation's validity turned on whether other states "accepted it. If they did not, the ratification was invalid.").
453. See Consultative Meeting of Legal Experts, Geneva (Feb. 17-22, 1964), in 2 HISTORY, supra note 9, at 442 (France) ("[R]eservations to the Convention ought not to be permitted.").
454. See, e.g., Edward T. Swaine, Reserving, 31 YAIB J. INT'L L. 307 (2006) ;
455. William W. Bishop Jr., Reservations to Treaties, 103 RECUEH. DES COURS 245 (1961).
456. Reservations to the Convention on the Prevention and Punishment of the Crime of Genocide, Advisory Opinion, 1951 I. C. J. 15 (May 28) [hereinafter Genocide Convention opinion].
457. Id. at 29.
458. Id. at 22, 24.
459. Other factors cutting in favor of allowing such reservations under the Genocide Convention opinion include the fact that ICSID's jurisdictional compromise was reached by a series of majority votes rather than by consensus, and that there was no general expression by delegates of an intent to disallow reservations. Id at 22, 25. For these reasons, the Genocide Convention opinion seems at odds with Schreuer's conclusion that it would have been "difficult to imagine any reservation" that is "compatible with the Convention's object and purpose."
460. SCHREUERI, supra note 50, at 1273.
461. Cf. Tokios Tokeles v. Ukraine, ICSID Case No. ARB/02/18, Decision on Jurisdiction, ¶ 80 (Apr. 29, 2004) (refusing over a strong dissent "to narrow the scope of covered investments by adding a condition... not found in... the Convention. ").
462. Joy Mining v. Arab Republic of Egypt, ICSID Case No. ARB/03/11, Award on Jurisdiction (Aug. 6, 2004), reprinted in 44 I. L. M. 73 (2005) ;
463. Malaysian Historical Salvors I, supra note 60;
464. see also SCHREUERI, supra note 50, art. 25, 1 122 ("the commitment is substantial").
465. But set Mihaly Int'l Corp. v. Democratic Socialist Republic of Sri Lanka, ICSID Case No. ARB/00/2, Award, ¶ 51 (Mar. 15, 2002)
466. reprinted in 41 IX. M. 867 (2002) (rejecting substantiality test).
467. Working Paper in the Form of a Draft Convention (June 5, 1962) 2 HISTORY, supra note 9, at 34.
468. Memorandum of the Meeting of the Committee of the Whole (June 6, 1963), in 2 HISTORY, supra note 9, at 115 (Garland) ;
469. see also, e.g., Consultative Meeting of Legal Experts, Addis Ababa (Dec. 16-20, 1963), in 2 HISTORY, supra note 9, at 258 (Dahomey) (suggesting that the Secretary-General should have the power to deem a dispute too financially insignificant to justify arbitration) ;
470. Consultative Meeting of Legal Experts, Bangkok (Apr. 27-May 1, 1964), in 2 HISTORY, supra note 9, at 502 (Pakistan) (advocating a minimum amount in dispute) ;
471. Consultative Meeting of Legal Experts, Addis Ababa (Dec. 16-20, 1963), in 2 HISTORY, supra note 9, at 257 (Cameroon) ;
472. Summary Proceedings of the Legal Committee Meeting (Nov. 27, 1964, Morning), in 2 HISTORY, supra note 9, at 710 (Niger) ;
473. cf. Comments by Mr. da Cunha (Brazil) on Chapter II (Nov. 30, 1964), in 2 HISTORY, supra note 9, at 839 (proposing that investments be "of public interest").
474. Regional Consultative Meetings of Legal Experts on Settlement of Investment Disputes, Chairman's Report on Issues Raised and Suggestions Made (July 9, 1964), in 2 HISTORY, supra note 9, at 567.
475. Consultative Meeting of Legal Experts, Bangkok (Apr. 27-May 1, 1964), in 2 HISTORY, supra note 9, at 497 (China) (proposing a limit on the value of total investment) ;
476. Summary Proceedings of the Legal Committee Meeting (Nov. 27, 1964, Morning), in 2 History, supra note 9, at 706 (India) ("[O]nly 'substantial' investments should come under the regime of the Convention. ").
477. Preliminary Draft of ICSID Convention (Oct. 15, 1963), in 2 HISTORY, supra note 9, at 204;
478. see also 2 HISTORY, supra note 9, at 260, 432, 497, 567, 660 (rejected efforts to insert substantiality requirement).
479. Draft Convention on the Settlement of Investment Disputes Between States and Nationals of Other States, (Sept. 11, 1964), in 2 HISTORY, supra note 9, at 621-23.
480. See, e.g., 2 HISTORY, supra note 9, at 702 (United Kingdom) ;
481. id. at 705 (Spain) ;
482. id. at 707 (Sweden).
483. Consultative Meeting of Legal Experts, Geneva (Feb. 17-22, 1964), in 2 HISTORY, supra note 9, at 450 (Norway) (arguing that "many thousands of short-term transactions would never be regarded as coming within [ICSID jurisdiction]").
484. SCHREUERI, supra note 50, art. 25, ¶ 89.
485. See, e.g., Malaysian Historical Salvors I, supra note 60, ¶ 86;
486. Joy Mining v. Arab Republic of Egypt, ICSID Case No. ARB/03/11, Award on Jurisdiction, ¶ 57 (Aug. 6, 2004), reprinted in 44 I. L. M. 73 (2005).
487. Even the Malaysian Historical Salvors Annulment Panel fell prey to this misunderstanding.
488. Malaysian Historical Salvors II, supra note 2, ¶ 69, 72 ("It appears... that use of the term 'investment' excluded a simple sale and like transient commercial transactions from the jurisdiction of the Centre.") ;
489. see also Phoenix Action, Ltd. v. Czech Republic, ICSID Case No. ARB/06/5, Award, ¶ 82 (Apr. 15, 2009).
490. Preliminary Draft of a Convention on the Settlement of Investment Disputes between States and Nationals of Other States, Comment to Art. II (Oct. 15, 1963), in 2 HISTORY, supra note 9, at 203.
491. See, e.g., 2 HISTORY, supra note 9, at 322 (Broches) ("The danger had been envisaged that a party might attempt to bring before the Center disputes of a purely commercial or political nature.").
492. See, e.g., Consultative Meeting of Legal Experts, Addis Ababa (Dec. 16-20, 1963), in 2 HISTORY, supra note 9, at 260 (Ethiopia) ("[T]he Center should be empowered to hear political and commercial claims') ;
493. id. at 397 (France) (advocating inclusion of claims "based on purely economic or commercial considerations" unless they had no plausible allegation of "legal rights") ;
494. Summary Proceedings of the Legal Committee Meeting (Nov. 25, 1964, Afternoon), in 2 HISTORY, supra note 9, at 705 (Spain) ("[M]oney, capital goods and other goods required for the industrial development of a country ought to be included in any definition. ").
495. Consultative Meeting of Legal Experts, Bangkok (Apr. 27-May 1, 1964), in 2 HISTORY, supra note 9, at 493 (India) ;
496. see also Consultative Meeting of Legal Experts, Geneva (Feb. 17-22, 1964), in 2 HISTORY, supra note 9, at 395 (Spain) ("agree[ing] that the term should exclude disputes of a political character, but... that commercial and economic factors were generally too closely bound up with legal disputes for those factors to be ruled out in the manner suggested in the Comment [of the drafters attached to the convention]") ;
497. cf. Summary Proceedings of the Legal Committee Meeting (Nov. 25, 1964, Afternoon) in 2 HISTORY, supra note 9, at 702 (Dahomey) ("Disputes were not always well defined... [D]isputes having said mixed character should [not] be taken away from the jurisdiction of the Center. The fact that the basis of this jurisdiction is consent should dispel any misgivings on this subject.").
498. For substantially similar reasons, all efforts to eliminate the Convention's application to bonds, loans, and capital flow were rejected.
499. Compare Summary Proceedings of the Legal Committee Meeting (Nov. 27, 1964, Morning), in 2 HISTORY, supra note 9, at 709 (Philippines) (suggesting the elimination of claims based on capital flow)
500. and Consultative Meeting of Legal Experts, Addis Ababa (Dec. 16-20, 1963), in 2 HISTORY, supra note 9, at 261 (Burundi) ("[A] foreign company which lent money to a State could not be regarded as an investor")
501. with Consultative Meeting of Legal Experts, Addis Ababa (Dec. 16-20, 1963), in 2 HISTORY, supra note 9, at 261 (Broches) (explaining that the current draft covered loans)
502. and Consultative Meeting of Legal Experts, Bangkok (Apr. 27-May 1, 1964), in 2 HISTORY, supra note 9, at 474 (Australia) (stating that the Convention also covers "borrowing of cash by the host country from foreign private investors").
503. See, e.g., Comments and Observations of Member Governments on the Draft Convention for the Settlement of Investment Disputes between States and Nationals of Other States (Nov. 23, 1964), in 2 HISTORY, supra note 9, at 668, 702 (United Kingdom) ("prefer[ing] to have no such definition in the convention, " as "parties should not be prevented from making arrangements to submit disputes to the Center") ;
504. Comments and Observations by the Republic of Austria on the Draft Convention (Nov. 24, 1964), in 2 HISTORY, supra note 9, at 670 ("[I]t should be the goal of the Convention to allow as general an application as possible.") ;
505. Consultative Meetings of Legal Experts, Santiago (Feb. 3-7, 1964), in 2 HISTORY, supra note 9, at 361 (Jamaica) (hoping "to keep the definitions as flexible as possible... [which] would enable a wide variety of disputes to be brought within the jurisdiction of the Center") (commenting on scope of "nationality" requirement) ;
506. see also Consultative Meeting of Legal Experts, Bangkok (Apr. 27-May 1, 1964), in 2 HISTORY, supra note 9, at 542 (Broches) (suggesting that even "outstanding and deferred payments" would "come within the term 'investment' in its broadest sense").
507. See, e.g.. Consultative Meetings of Legal Experts, Bangkok (Apr. 27-May 1, 1964), in 2 HISTORY, supra note 9, at 493 (India) (noting that failure to define investment would leave "[o]nly one limitation... explicitly stated, namely the consent of parties, and... would probably expose States to pressure to consent to arbitrate disputes which would not be arbitrable under any international law or understanding") ;
508. Summary Proceedings of the Legal Committee Meeting (Dec. 8, 1964, Afternoon), in 2 HISTORY, supra note 9, at 822 (Spain) ("consider[ing] the [United Kingdom proposal] to be exceedingly broad since it did not specify what the jurisdiction of the Centre would be") ;
509. Summary Proceedings of the Legal Committee Meeting (Nov. 25, 1964), in 2 HISTORY, supra note 9, at 700 (Ceylon) (noting that the phrase "arising out of or in connection with an investment" was "capable of the widest possible meaning, " yielding "very wide and indefinite authority over the affairs of a sovereign state") ;
510. cf. Consultative Meetings of Legal Experts, Bangkok (Apr. 27-May 1, 1964), in 2 HISTORY, supra note 9, at 496 (China) (" 'Investment' was a term whose content varied according to the different economic or political backgrounds or points of view of the various countries") ;
511. id. at 493 (India) (suggesting the impossibility of " distinguish[ing] between political, economic and commercial disputes on the one hand, and legal disputes on the other.").
512. Comments and Observations by the Republic of Austria on the Draft Convention (Nov. 24, 1964), in 2 HISTORY, supra note 9, at 670. The Directors' comment that "consent alone will not suffice to bring a dispute within its jurisdiction" does not seem to contradict this conclusion about the investment requirement specifically.
513. Report of the Executive Directors, supra note 15, ¶ 25. That comment introduces the entire section on jurisdiction, which also includes a discussion of the Convention's requirements of "national" status and "legal dispute."
514. See supra note 180 for the point that the purely processbased limits in the report's discussion of "investment" are a sharp contrast to the substantive limits in its discussion of "national" status and "legal dispute."
515. ICSID Convention, supra note 13, pmbl.
516. Memorandum of the Meeting of the Committee of the Whole (Feb. 23, 1965, Afternoon), in 2 HISTORY, supra note 9, at 989 (contrasting cases for which ordrt public is relevant to the cases that would be decided by investment tribunals).
517. Memorandum of the Meeting of the Committee of the Whole (Feb. 23, 1965, Afternoon), in 2 HISTORY, supra note 9, at 989.
518. Memorandum of the Meeting of the Committee of the Whole (Feb. 16, 1965), in 2 HISTORY, supra note 9, at 972.
519. See Regional Consultative Meetings of Legal Experts: Chairman's Report on Issues Raised and Suggestions Made (July 9, 1964), in 2 HISTORY, supra note 9, at 566-67 (Broches) ("Several other delegations... felt that the reluctance of some States to submit particular classes of disputes to arbitration was no reason to narrow the scope of the Convention for all Contracting States[,] many of whom had no objection to its present scope.").
520. Cf. Summary Proceedings of the Legal Committee Meeting (Nov. 25, 1964, Afternoon), in 2 HISTORY, supra note 9, at 704 (Broches) (explaining the drafters' decision not to specify a definition of investment because the attempted definitions "were always directed towards particular facts or situations which the parties or governments had in mind while the matter envisaged by this Convention was more fluid").
521. This can be raw protectionism or xenophobia, as with much of the negative reaction to Japanese investors' purchases of American real estate in the 1980s. It can also come from a more defensible desire for national control over crucial industries and security-sensitive areas, such as Venezuela's cancellation of its oil contracts with foreign oil companies, or the successful opposition in the United States to the Dubai Ports deal.
522. The text accompanying notes 247-233, infra, attempts to anticipate and respond to critiques of this simplifying assumption.
523. See infra note 230 for further discussion of this question.
524. For conflicting views on the "laboratories of democracy" rationale in the domestic context, see Susan Rose-Ackerman, Risk-Taking and Reelection: Does Federalism Promote Innovation?, 9 J LEGAL STUD. 593 (1980)
525. (criticizing the laboratories theory) and Brian Galle & Joseph Leahy, Laboratories of Democracy, Policy Innovation in Decentralized Governments, 58 EMORY L. J. 1333 (2009) (supporting the laboratories theory).
526. Any benefits of flexibility would be risked by relying solely on state practice to define "investment." See Devashish Krishan, A Notion of Investment, in INVESTMENT TREATY ARBITRATION: A DEBATE AND DISCUSSION (T. Grierson ed., 2008) (suggesting a state practice approach to defining investment). There are real attractions to the state practice approach, particularly its ability to anchor treaty interpretation in an objective but currently broad measure. But it sacrifices the flexibility that was actually agreed to in the Convention and leaves individual countries subject to any jurisdictional floor that may come into vogue. With that said, at least two tribunals seem sympathetic to this mode of analysis, and it is certainly preferable under current conditions to the restrictive approach. Biwater Gauff (Tanz.), Ltd. v. United Republic of Tanzania, ICSID Case No. ARB/05/22, Award, ¶ 314 (July 24, 2008) (suggesting that patterns in "very substantial numbers of BITs across the world" could generate an "international consensus") ;
527. Fedax v. Republic of Venezuela, ICSID Case No. ARB/96/3, Decision of the Tribunal on Objections to Jurisdiction, ¶¶ 34-36 (July 11, 1997), reprinted in 37 I. L. M. 1378 (1998) (reviewing BITs, Energy Charter Treaty, Mercosur Protocols, and Mex.-Colom.-Venez. Free Trade Agreement).
528. See, e.g., Agreement between the Government of Canada and the Government of the Kingdom of Thailand for the Promotion and Protection of Investments, Can.-Thail., arts. 1 (f), 4 (3), Jan. 17, 1997, available at http://www.sice.oas.org/Investment/BITSbyCountry/BITs/Can-thailand.pdf (excluding "cultural industries" including TV, film, publishing, and radio; excluding real estate not intended for "business purposes") (both states have signed but not ratified ICSID) ;
529. Treaty between the United States of America and the People's Republic of Bangladesh Concerning the Reciprocal Encouragement and Protection of Investment, U. S.-Bangl., art. 2.2 (a), July 25, 1989, S. TREATY DOC. NO. 99-23 (referring to annex at the end of the treaty) (listing industries not subject to national treatment guarantee) ;
530. Agreement between the Government of the Republic of Finland and the Government of the Republic of Argentina on the Promotion and Reciprocal Protection of Investments, Fin.-Arg., art. 1 (1) (c), Nov. 5, 1993, available at http://www.unctad.org/sections/dite/iia/docs/bits/argentina-finland.pdf (excluding loans not "directly related to a specific investment").
531. See, e.g., Agreement between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of Malaysia for the Promotion and Protection of Investments, U. K.-Malay., art. 1 (1) (b) (ii), Oct. 21, 1988, available at http://www.unctad.org/sections/dite/iia/docs/bits/uk- malaysia.pdf [hereinafter U. K.-Malaysia BIT];
532. Gruslin v. Malaysia, ICSID Case No. ARB/99/3, Award, ¶¶ 9.2, 25.5 (Nov. 27, 2000), reprinted in 5 ICSID REP. 483 (Edward Helgeson ed., 2006) (applying article 1 (1) (b) (ii) of U. K.-Malaysia BIT to exclude a non-approved project) ;
533. PSEG Global, Inc. v. Republic of Turkey, ICSID Case No. ARB/02/5, Decision on Jurisdiction, ¶ 125 (June 4, 2004) (describing Turkey's Article 25 (4) notification).
534. See, e.g., Agreement between the Government of Ukraine and the Government of the Kingdom of Denmark concerning the Promotion and Reciprocal Protection of Investments, Ukr.-Den., art. 1 (5), Oct. 23, 1992, available at http://www.unctad.org/sections/dite/iia/docs/bits/denmark-ukraine.pdf;
535. Agreement between the Government of Australia [and] the Government of the United Mexican States on the Promotion and Reciprocal Protection of Investments, Mex.-Austl., art. 1 (a) (ix), Feb. 18, 1998, available at http://www.unctad.org/sections/dite/iia/docs/bits/Australia-mexico.pdf (excluding loans or debt securities where the original maturity is "less than three years") (Mexico has not signed ICSID) ;
536. Agreement between the Republic of Austria and Bosnia and Herzegovina for the Promotion and Protection of Investments, Austria-Bos. & Herz., art. 1 (2) (h), Oct. 2, 2000, available at http://www.unctad.org/sections/dite/iia/ docs/bits/austria-bosnia.pdf (excluding credits to finance commercial transactions "with a duration of less than three years").
537. See, e.g., Agreement between the United Mexican States and the Republic of Austria on the Promotion and Protection of Investments, Mex.-Austria, art. 1 (2), Feb. 18, 1998, www.sice.oas.org/Investment/BITSbyCountry/BITs/MEX-Austria. pdf (excluding commercial transactions for sale of goods or services) (Mexico has not signed ICSID) ;
538. Fedax v. Republic of Venezuela, ICSID Case No. ARB/96/3, Award on Jurisdiction, ¶ 36 (July 11, 1997), reprinted in 37 I. L. M. 1378 (1998) (citing 1994 Mexico-Colombia-Venezuela Free Trade Agreement (excluding money claims arising from commercial contracts for the sale of goods or services and commercial credits) (Mexico has not signed ICSID)) ;
539. see also North American Free Trade Agreement, art. 1139 (i) (i), U. S.-Can.-Mex., Dec. 17, 1992, 32 I. L. M. 289 (1993) (excluding "claims to money that arise solely from... commercial contracts for sale of goods or services"). NAFTA disputes are not subject to ICSID jurisdiction, but the point is that states are in fact engaged in an ongoing and active process of tailoring their package of economic incentives.
540. Studies on this question conflict. Some find evidence that the introduction of BITs has a significant positive effect on levels of foreign investment under at least some circumstances. E.g., Jennifer Tobin & Susan Rose-Ackerman, When BITs Have Some Bite: The Political-Economic Environment for Bilateral Investment Treaties (2006), www.law.yale.edu/documents/pdf/When-BITs- Have-Some-Bite.doc;
541. Jeswold Salacuse & Nicholas P. Sullivan, Do BITs Really Work? An Evaluation of Bilateral Investment Treaties and their Grand Bargain, 46 HARV. INT'L. L. J. 67 (2005) ;
542. Eric Neumayer & Laura Spess, Do Bilateral Investment Treaties Increase Foreign Direct Investment to Developing Countries?, 33 WORLD DEV. 1567 (2005) ;
543. Tim Biithe & Helen V. Milner, The Politics of Foreign Direct Investment into Developing Countries: Increasing FDI through Policy Commitment Via Trade Agreements and Investment Treaties (2005), www.allacademic.com/meta/p- mla-apa-research-citation/0/5/9/8/5/p59852-index.html;
544. Peter Egger & Michael Pfaffermayr, The Impact of Bilateral Investment Treaties on Foreign Direct Investment, 32 J. COMP. EOON. 788 (2004).
545. Other reviews are more skeptical about whether BITs actually attract investment. Jason Webb Yackee, Bilateral Investment Treaties, Credible Commitment, and the Rule of (International) Law: Do BITs Promote Foreign Direct Investment, 42 LAW & SOC'Y REV. 805, 807 (2008) (finding no correlation between formal strength of investment protections and the level of foreign investment) ;
546. Mary Hallward-Driemeier, Do Bilateral Investment Treaties Attract Foreign Direct Investment?: Only a Bit,.. and They Could Bite (World Bank, Policy Research Working Paper No. WPS 3121, 2003) (finding no correlation). And Andrew Guzman has cautioned that even if BITs increase total investment flows, they may still reduce the net welfare of developing countries depending on how their benefits are distributed.
547. Andrew Guzman, Why LDCs Sign Treaties that Hurt Them: Explaining the Popularity of Bilateral Investment Treaties, 38 VA. J. INT'L L. 639.
548. But see Jeswold Salacuse & Nicholas Sullivan, Do BITs Really Work? An Evaluation of Bilateral Investment Treaties and their Grand Bargain, 46 HARV. INT'L. L. J. 67, 112 (2005) ("[T]he bargain implicit in the BITs has advanced the interests of both developed and developing countries.").
549. American lawyers are all too familiar with one such example: the history of judicial efforts to police the boundaries of the constitutional Commerce Clause. The courts' efforts to delineate "commerce" culminated in a line of cases drawing essentially arbitrary lines between economic activity "in the stream" of interstate commerce and economic activity outside of it. Partway through the Great Depression, however, the judiciary reversed course and has since effectively abandoned any effort to restrain the federal government's power over "economic activity." United States v. Lopez, 514 U. S. 549, 559 (1995).
550. For an interesting discussion of what this history might suggest for international adjudicators' review of state economic policymaking more generally, see Ernest A. Young, Institutional Settlement in a Globalizing Judicial System, 54 DUKE L. J. 1143, 1211-12 (2005).
551. Paul Stephan points out, for example, that this point is more complicated for states whose economic policy is influenced by the International Monetary Fund in exchange for desperately needed loans.
552. The interplay of interests is complicated by the repeat nature of the international game. Even a state eager to punish a rogue trading partner, for example, might not advocate a minimalist interpretation of tariff restrictions, since it may one day find itself at the receiving end.
553. See Consultative Meeting of Legal Experts, Santiago (Feb. 3-7, 1964), in 2 HISTORY, supra note 9, at 334, 336 (Broches) ("There would be no point in contemplating a Convention unless a government's word was regarded as its bond... The obligation in question was not to make a promise, but to keep it once made... The question was one of honoring a specific commitment.").
554. Cf. United States v. Mead Corp., 533 U. S. 218, 228 (2001) (suggesting in the context of domestic law that positions adopted by administrative agencies for the purpose of litigation have received "near indifference" from the courts). For further discussion of this point, see supra text accompanying note 27.
555. Eyal Benvenisti & George W. Downs, The Empire's New Clothes: Political Economy and the Fragmentation of International Law, 60 STAN. L. REV. 595, 597 (2007).
556. Andrew Guzman, Why LDCs Sign Treaties that Hurt Them: Explaining the Popularity of Bilateral Investment Treaties, 38 VA. J. INT'L L. 639 (1998) ;
557. see also Zachary Elkins, Andrew T. Guzman, & Beth Simmons, Competing for Capital: The Diffusion of Investment Treaties, 1960-2000, 2008 U. ILL. L. REV. 265, 267-79 (2008).
558. Summary Proceedings of the Legal Committee Meeting, (Dec. 8, 1964, Afternoon) in 2 HISTORY, supra note 9, at 825 (Tunisia) (expressing "[d]eep concern with respect to the British proposal which would lead to a competition between the capital-importing states who would then be compelled to present a comparative list of advantages to private investors.") ;
559. Summary Proceedings of the Legal Committee Meeting (Nov. 25, 1964, Afternoon) in 2 HISTORY, supra note 9, at 700 (Ceylon) ("No capital-importing State which had accepted the Convention could refuse consent to arbitration which investors would invariably require[,] and capital would stop flowing to countries that did not accede to the Convention. ") ;
560. Memorandum of the Meeting of the Committee of the Whole (Dec. 18, 1962), 2 HISTORY, supra note 9, at 57-58 (Krishna Moorthi) ("[A] state which did accede with reservations would find itself under continued pressure to make its accession to the convention progressively less conditional") ;
561. see also Summary Proceedings of the Legal Committee Meeting (Dec. 8, 1964, Afternoon), in 2 HISTORY, supra note 9, at 823-24 (Central African Republic) (criticizing "the idea of leaving the limitations to the procedure of notification rather than embodying the limitations in the [Convention] text because the procedure of notification would result in a comparison being drawn between the advantages given by one capital-importing country as against another capital-importing country.") ;
562. Consultative Meeting of Legal Experts, Addis Ababa (Dec. 16-20, 1963), in 2 HISTORY, supra note 9, at 259 (Tunisia) ("[The Convention's] optional character would... become more and more theoretical.") ;
563. id. at 261 (Mali) (agreeing that "recourse to the facilities of the Center was optional in theory only") ;
564. Consultative Meeting of Legal Experts, Santiago (Feb. 3-7, 1964), in 2 HISTORY, supra note 9, at 308 (Bolivia) ("[I]f the draft Convention were not unanimously rejected, foreign capital might blacklist the countries that did not wish to submit their disputes with investors to international arbitration") ;
565. Consultative Meeting of Legal Experts, Bangkok (Apr. 27-May 1, 1964), in 2 HISTORY, supra note 9, at 470 (India) ("If a distinction were not drawn between cases where the dispute itself was not arbitrable... the Convention [might] compel every State to agree to conciliation or arbitration in every case for fear of an adverse inference.").
566. See supra text accompanying notes 208, 225.
567. Christian Tietje, Karsten Nowrot, & Clemens Wackernagel, Once and Forever? The Legal Effects of a Denunciation of ICSID, 6 TRANSNAT'L DISP. MGMT. 1, 5 (Mar. 2008).
568. 2004 U. S. Model BIT, at 3, www.state.gov/documents/organization/117601. pdf (also noting that forms of debt that result from the sale of goods or services are less likely to be an investment.).
569. See, e.g., Damon Vis-Dunbar, Indian Lawyer Pursues Claim Against the United Kingdom under the India-UK BIT, INVESTMENT TREATY NEWS, NOV. 28, 2008, http://www.investmenttreatynews.org/cms/news/archive/2008/11/28/ indian-lawyer-pursues-claim-against-the-united-kingdom-under-the-india-ukbit. aspx;
570. Vattenfall, AB v. Federal Republic of Germany, ICSID Case No. ARB/09/6 (BIT claim against Germany by Swedish investor).
571. See, e.g., Alexandria Valencia, Ecuador Sends Troops to Expel Brazilian Company, REUTERS, Sept. 23, 2008, www.reuters.com/article/bondsNews/ idUSN2345983220080923 (describing Ecuador's incursions on local assets belonging to Brazilian company Odebrecht) ;
572. Cemex Files Lawsuit before ICSID against Government over Nationalization, Dec. 3, 2008, http://www.bnamericas.com/story.xsql?id-sector=5&id-noticia= 459869&Tx-idioma=I&source (describing a $1.3bn claim by Mexican cement company against Venezuela for expropriation) ;
573. Damon Vis-Dunbar, supra note 234 (BIT claim against the United Kingdom by Indian lawyer).
574. Memorandum of the Discussion by the Executive Directors (Sept. 10, 1963), in 2 HISTORY, supra note 9, at 179-80 (Machado).
575. VCLT, supra note 3, art. 32 (a). An independently sufficient route to the same end is the Vienna Convention's oft-overlooked injunction that "[a] special meaning shall be given to a term if it is established that the parties so intended."
576. VCLT, supra note 3, art. 31 (4).
577. See, e.g., BLACK'S LAW DICTIONARY (4th ed. 1951) ("The placing of capital or laying out of money in a way intended to secure income or profit from its employment.") ;
578. WEBSTER'S THIRD NEW INT'L DICTIONARY (3rd ed. 1961) ("An expenditure of money for income or profit or to purchase something of intrinsic value: capital outlay" "the sum invested or the property purchased" "the commitment of funds with a view to minimizing risk and safeguarding capital while earning a return-contrasted with speculation" "the commitment of something other than money to a long-term interest or project") ;
579. WEBSTER'S NEW INT'L DICTIONARY (2d ed. 1957) ("The investing of money or capital in some species of property for income or profit; the sum invested or the property purchased.") ;
580. OXFORD ENGLISH DICTIONARY (1961) ("The investing of money or capital" "the conversion of money or circulating capital into some species of property from which an income or profit is expected to be derived in the ordinary course of trade or business. Distinguished from speculation").
581. The French term "investissement" in its economic sense derives from English. DICTIONNAIRE HISTORIQUE DE LA LANGUE FRANCAISE (1992) ("L'emploi devenu usuel de l'économie est un emprunt adapté à l'anglais investment") ;
582. id. (defining "investir": "Investir a repris a l'anglais to invest son emploi en économic pour «employer (des capitaux) dans une entreprise»"). LEXIS DICTIONNAIRE DE LA LANGUE FRANÇAIS (1975) ("Emploi de capitaux visant à 1'accroissement de la production d'une entreprise") ;
583. see also id. (defining "investir": "Placer de l'argent, des capitaux, pour en tirer profit ou assurer l'expansion d'une entreprise") ;
584. TRÉSOR DE LA LANGUE FRANCAISE (1983) ("Application par un individu, une entreprise ou un gouvernement, d'une certaine quantité de monnaie à la création de biens de production, d'équipement, de produits de consommation ou de services" "capitaux investis" "Investissements étrangers, de longue durée, nationaux, privés, publics; investissements productifs; accroissement des investissements").
585. Spanish dictionaries tend to define the term "inversión" by reference to the verb "invertir" (to invest). DICCIONARIO MANUAL E ILUSTRADO DE LA LENGUA ESPAÑOLA (1927) (defining "invertir": "Hablando de caudales, emplearlos en aplicaciones productivas") ;
586. DICCIONARIO IDEOLÓGICO DE LA LENGUA ESPAÑOLA (1942) (defining "invertir") ("Hablando de caudales, emplearlos, gastarlos en aplicaciones productivas") ;
587. DICCIONARIO MANUAL E ILUSTRADO DE LA LENGUA ESPAÑOLA (1950) (defining "invertir": "Hablando de caudales, emplearlos en aplicaciones productivas") ;
588. NUEVA ENCICLOPEDIA SOPENA (1955) ("Emplear, gastar el dinero").
589. See also Amerasinghe, supra note 27, at 180 ("[D]ictionary definitions devised for the purpose of economic science or financial analysis may be irrelevant for the purpose of defining investment in connection with the Centre's jurisdiction. So also tax law or investment law definitions in municipal law are intended to relate to special objectives and would be of limited usefulness.").
590. Nor does it appear that the delegates intended to borrow "investment" as a term of art from another legal regime. See, e.g., 2 HISTORY, supra note 9, at 492 (Lebanon) ("'[I]nvestment was an economic concept and did not correspond to any European legal concept'") ;
591. HISTORY, supra note 9, at 493 (India) (noting that the term "needed definition" and noting that the United States' Mutual Security Act had similarly been obliged to define the term "investment" for its own particular purposes) ;
592. see also RUDOLF DOLZER & CHRISTOPH SCHREUER, PRINCIPLES OF INTERNATIONAL INVESTMENT LAW 60 (2009) ("[T]he term 'investment' has its origin in economic terminology and needed to be understood and defined as a legal concept when first used in investment agreements.").
593. The Mutual Security Act was a vehicle through which the United States provided economic assistance to friendly countries. Mutual Security Act of 1954, Pub L. No. 83-665, § 413 (b) (4) (H), 68 Stat. 832, 848 (defining investment as "any contribution of capital goods, materials, equipment, services, patents, processes, or techniques by any person in the form of (1) a loan or loans to an approved project, (2) the purchase of a share of ownership in any such project, (3) participation in royalties, earnings, or profits of any such project, and (4) the furnishing of capital goods[,] items and related services pursuant to a contract providing for payment in whole or in part after the end of the fiscal year in which the guaranty of such investment is made") ;
594. see also Mutual Security Act of 1951, Pub. L. 82-165, 65 Stat. 373 (Oct. 10, 1951) (predecessor of 1954 act) ;
595. Mutual Security Act of 1956, Pub. L. No. 84-726 (adding provisions not relevant to this question) ;
596. Mutual Security Act of 1959, Pub. L. No. 86-108, 73 Stat. 246;
597. Foreign Assistance Act of 1961, Pub. L. No. 87-195, § 223 (a), 75 Stat. 424, 431 (tracking Mutual Security Act's definition of "investment, " while adding "capital commodities" and striking "capital goods, " "materials, " and "equipment").
598. VCLT, supra note 5, art. 31 (1).
599. Id. art. 31 (3) (b).
600. Devashish Krishan, A Notion of ICSID Investment, in INVESTMENT TREATY ARBITRATION: A DEBATE AND DISCUSSION (TJ Grierson ed., 2008) ;
601. see also Biwater Gauff (Tanz.), Inc. v. United Republic of Tanzania, Award, ICSID Case No. ARB/05/22 ¶¶ 313-15 (July 24, 2008) (discussing dominant BIT practice of defining "investment" to cover virtually any conceivable economic asset or enterprise).
602. Memorandum of the Meeting of the Committee of the Whole (Feb. 16, 1965), in 2 HISTORY, supra note 9, at 972 (Broches) ("[E]ach contracting State could, in effect, write its own definition. ").
603. See, e.g., Met al.clad v. Mexico, Award, ICSID Case No. ARB (AF)/97/1 (Aug. 30, 2000) ($16.7 million for designating alluvial stream plain as an ecological zone) ; Técnicas Medioambientales Tecmed v. Mexico, Award, ICSID Case No. ARB (AF)/00/2 (May 29, 2003) ($5.5 million for requiring landfill to relocate away from rapidly growing municipality). For a recent discussion of these and other regulatory takings cases, see Steven R. Ratner, Regulatory Takings in Institutional Context: Beyond the Fear of Fragmented International Law, 102 AM. J. INT'L L. 475 (2008).
604. See, e.g., Vicki Been & Joel Beauvais, The Global Fifth Amendment? NAFTA's Investment Protections and The Misguided Quest for an International "Regulatory Takings" Doctrine, 78 N. Y. U. L. REV. 30 (2003).
605. See, e.g., C. M. S. Gas Transmission Co. v. Argentine Republic, ICSID Case No. ARB/01/8, Award (May 12, 2005) (denying existence of economic emergency) ;
606. Enron Corp. v. Argentine Republic, ICSID Case No. ARB/01/3, Award (May 22, 2007) ;
607. Sempra Energy Int'l v. Argentine Republic, ICSID Case No. ARB/02/16, Award, ¶¶ 346-55, 378-88 (Sept. 28, 2007) ;
608. see also LG & E Energy Corp. v. Argentine Republic, ICSID Case No. ARB/02/1, Award (Oct. 3, 2006) (recognizing only limited period of genuine necessity).
609. But see Continental Casualty Co. v. Argentine Republic, ICSID Case No. ARB/03/9, Award, ¶¶ 231-33 (Sept. 5, 2008) (finding that "essential security interests" defense precluded virtually all of investor's claims).
610. For commentary on this issue, see, e.g., Stephan Schill, International Investment Law and the Host State's Power to Handle Economic Crises, 24 J. INT'L ARB. 265 (2007) ;
611. William Burke-White & Andreas von Staden, Investment Protection in Extraordinary Times: The Interpretation and Application of Non-Precluded Measures Provisions in Bilateral Investment Treaties, 48 VA. J. INT'L L. 307 (2008).
612. See, e.g., Susan D. Franck, Tbe Legitimacy Crisis in Investment Treaty Arbitration: Privatizing Public International Law Through Inconsistent Decisions, 73 FORDHAM L. REV. 1521 (2005) (arguing that concern about inconsistent decisions is overstated).
613. See Anne van Aaken, Perils of Success? The Case of International Investment Protection, 9 EUR. BUS. ORG. L. REV. 1 (2008). While this slowdown could be explained in part by saturation of the realistically available market for BITs, van Aaken points out that the universe of potential BIT pairings is not remotely close to exhausted by the treaty pairings currently in place.
614. Tietje, supra note 252.
615. Bolivia Submits a Notice under Article 71 of the ICSID Convention, May 16, 2007, http://icsid.world bank.org/ICSID/FrontServlet?requestType= CasesRH&actionVal=OpenPage&PageType=AnnouncementsFrame&FromPage= NewsReleases&pageName=Announcement3;
616. Ecuador Submits a Notice under Article 77 of the ICSID Convention, July 9, 2009, http://icsid.worldbank.org/ICSID/FrontServletPrequest Type=CasesRH&actionVal=OpenPage&PageType=AnnouncementsFrame& FromPage=Announcemencs&pageName=Announcement20.
617. El Gobierno terminará contratos con petroleras que insistan en llevar sus reclamos al Ciadi, EL COMERCIO, Aug. 6, 2008 (discussing constitutional requirement that all international arbitrations be conducted in a South American forum).
618. Luke Eric Peterson, Ecuador Announces that It Wants Out of U. S. Investment Treaty, INVESTMENT TREATY NEWS (Int'l Inst, for Sustainable Dev., Winnipeg, Man., Can.), May 9, 2007, at 5.
619. For a general discussion of the backlash, see Charles Brower & Stephan Schill, Is Arbitration a Threat or Boon to the Legitimacy of International Investment Law?, 9 CHI. J. INT'L L. 471, 471-76 (2009).
620. See, e.g., Pamela S. Karlan, Race, Rights, and Remedies in Criminal Adjudication, 96 MICH. L. REV. 2001 (1998). For an insightful application of these principles in the international context
621. see Sonja B. Starr, Rethinking "Effective Remedies": Remedial Deterrence in International Courts, 83 N. Y. U. L. REV. 693 (2008). The hydraulic theory has its limits in a system where tribunals are not bound by prior precedent or a higher court. If a tribunal disagrees with broader trends in substantive investment law, it should be just as free to reject them as it is to adopt the Salini approach. With that said, alternate explanations for the restrictive approach are not obvious. For example, a concern for scarce judicial resources seems unlikely, since all costs of ICSID adjudication-including all arbitrators' fees and a $75, 000 registration fee to ICSID itself-are paid directly by the parties. Similarly, it is hard to imagine that systemic capacity concerns could be motivating pay-for-play arbitrators to use Article 25 to winnow their dockets, particularly since there is no apparent shortage of qualified arbitrators.
622. See, e.g., Michael Waibel, Opening Pandora's Box: Sovereign Bonds in International Arbitration, 101 AM. J. INT'L L. 711 (2007).
623. Dominique Grisay, International arbitration: the ICSID Convention: a convenient solution for companies in conflict with states, 6 THE BULLET "ILN", Mar. 18, 2007, http://www.imakenews.com/iln/e-article0007 63642.cfm?x=bll,0,w;
624. see also Afr. Holding Co. of Am. v. Democratic Republic of the Congo, ICSID Case No. ARB/05/21, Award, (July 29, 2008) (finding Article 25 investment but declining jurisdiction on jurisdiction ratione temporis grounds) (Francisco Orrego Vicuña, Otto L. O. de Witt Wijnen, and Dominique Grisay, arbitrators).
625. See, e.g.. Continental Casualty Co. v. Argentine Republic, ICSID Case No. ARB/03/9, Decision on Jurisdiction, ¶¶ 77, 86 (Feb. 22, 2006).
626. For interesting steps in this direction, see, e.g., Eyal Benvenisti, Margin of Appreciation, Consensus, and Universal Standards, 31 N. Y. U. J. INT'L L. & POL. 843 (1999) ;
627. Yuval Shany, Toward a General Margin of Appreciation Doctrine in International Law?, 16 EUR. J. INT'L. L. 907 (2006). Depending on how such doctrines are developed, they might bring investment law back, if not full circle, then at least part-way to controversies thought long settled. The Calvo Doctrine-advocated for years by Latin American countries and incorporated into many Latin American investment contracts, constitutions, and laws-provided that foreign nationals could not be given rights beyond those provided to citizens by domestic law. It has largely, though not entirely, fallen by the wayside as a significant principle of international law, but the kind of regulatory deference proposed here might push things back in that direction. For a recent discussion of ways that the Calvo Doctrine retains some vitality
628. see Wenhua Shan, Is Calvo Dead?, 55 AM. J. COMP. L. 123 (2007).
629. Consider, for example, what the Joy Mining arbitrators viewed as a devastating reductio of the claimant's argument in that case: "if a distinction is not drawn between ordinary sales contracts, even if complex, and an investment, the result would be that any sales or procurement contract involving a State agency would qualify as an investment." Joy Mining v. Arab Republic of Egypt, ICSID Case No. ARB/03/11, Award on Jurisdiction, ¶ 58 (Aug. 6, 2004)
630. reprinted in 44 I. L. M. 73 (2005) (emphasis added). My response would be: just so-and not only when one of the parties is a state agency.
631. See supra, text accompanying notes 221-225.
632. This is one place where dictionary definitions could make a difference under the Vienna Convention on the Law of Treaties. At least some of the definitions-though certainly not all of them-could support ruling out single-transaction sales of goods like the container ship hypothetical. See infra text accompanying note 282.
633. Concerted opposition has so far doomed both a global Multilateral Agreement on Investment ("MAI") and an ICSID appeals facility. See James Salzman, Labor Rights, Globalization, and Institutions: The Role and Influence of the Organization for Economic Cooperation and Development, 21 MICH. J. INT'L L. 769, 804-31 (2000) (MAI) ;
634. Suggested Changes to the ICSID Rules and Regulations, ¶ 4 (ICSID Secretariat Working Paper, May 12, 2005), available at http://icsid.worldbank. org/ICSID/FrontServlet?requestType=IC-SIDPublicationsRH&actionVal= ViewAnnouncePDF&AnnouncementType=Archive&AnnounceNo=22-1.pdf. Along similar lines, it remains very much open to question whether anything will come out of the Doha round of WTO talks. World Trade Talks End in Collapse, BBC News, July 29, 2008, http://news.bbc.co.uk/2/hi/business/7531099.stm (suggesting that "the collapse of the Doha talks could symbolise an end to multilateral trade agreements").
635. While it is beyond the scope of this paper to explore the relevant game dynamics, it is at least conceivable that investor and state control over arbitrator nominations could have some effect. Cf. Paul Stephan, Courts, Tribunals, and Legal Unification - The Agency Problem, 3 CHI. J. INT'L L. 333 (2002). Even setting aside the two sides' conflicting incentives on this question once a live controversy has arisen, however, the nomination process is a very noisy method of exercising control since so many unrelated legal principles (each potentially outcome-determinative) are in play in any given arbitration.
636. See, e.g., Recent Developments in International Investment Agreements, UNCTAD/WEB/ITE/IIT/2005/1, at 6 (Aug. 30, 2005), http://www.unctad. Org/sections/dite-dir/docs//webiteiit20051-en.pdf (citing renegotiations of 85 BITs). In at least one case, this kind of revision has been directly targeted at adjusting the scope of covered investments. See Jan de Nul, N. V. v. Arab Republic of Egypt, ICSID Case No. ARB/04/13, Decision on Jurisdiction, ¶¶ 24-33 (June 16, 2006) (noting that the revised 2002 Egypt-BelgoLux BIT defined "investment" to include some forms of economic activity that had not been covered by its 1977 predecessor). Registration fee to ICSID itself-are paid directly by the parties. Similarly, it is hard to imagine that systemic capacity concerns could be motivating pay-for-play arbitrators to use Article 25 to winnow their dockets, particularly since there is no apparent shortage of qualified arbitrators.
637. See, e.g., Michael Waibel, Opening Pandora's Box: Sovereign Bonds in International Arbitration, 101 AM. J. INT'L L. 711 (2007).
638. Dominique Grisay, International arbitration: the ICSID Convention: a convenient solution for companies in conflict with states, 6 THE BULLET "ILN", Mar. 18, 2007, http://www.imakenews.com/iln/e-article0007 63642.cfm?x=bll,0,w;
639. see also Afr. Holding Co. of Am. v. Democratic Republic of the Congo, ICSID Case No. ARB/05/21, Award, (July 29, 2008) (finding Article 25 investment but declining jurisdiction on jurisdiction ratione temporis grounds) (Francisco Orrego Vicuña, Otto L. O. de Witt Wijnen, and Dominique Grisay, arbitrators).
640. See, e.g.. Continental Casualty Co. v. Argentine Republic, ICSID Case No. ARB/03/9, Decision on Jurisdiction, ¶¶ 77, 86 (Feb. 22, 2006).
641. For interesting steps in this direction, see, e.g., Eyal Benvenisti, Margin of Appreciation, Consensus, and Universal Standards, 31 N. Y. U. J. INT'L L. & POL. 843 (1999) ;
642. Yuval Shany, Toward a General Margin of Appreciation Doctrine in International Law?, 16 EUR. J. INT'L. L. 907 (2006). Depending on how such doctrines are developed, they might bring investment law back, if not full circle, then at least part-way to controversies thought long settled. The Calvo Doctrine-advocated for years by Latin American countries and incorporated into many Latin American investment contracts, constitutions, and laws-provided that foreign nationals could not be given rights beyond those provided to citizens by domestic law. It has largely, though not entirely, fallen by the wayside as a significant principle of international law, but the kind of regulatory deference proposed here might push things back in that direction. For a recent discussion of ways that the Calvo Doctrine retains some vitality
643. see Wenhua Shan, Is Calvo Dead?, 55 AM. J. COMP. L. 123 (2007).
644. Consider, for example, what the Joy Mining arbitrators viewed as a devastating reductio of the claimant's argument in that case: "if a distinction is not drawn between ordinary sales contracts, even if complex, and an investment, the result would be that any sales or procurement contract involving a State agency would qualify as an investment." Joy Mining v. Arab Republic of Egypt, ICSID Case No. ARB/03/11, Award on Jurisdiction, ¶ 58 (Aug. 6, 2004), reprinted in 44 I. L. M. 73 (2005) (emphasis added). My response would be: just so-and not only when one of the parties is a state agency.
645. See supra, text accompanying notes 221-225.
646. This is one place where dictionary definitions could make a difference under the Vienna Convention on the Law of Treaties. At least some of the definitions-though certainly not all of them-could support ruling out single-transaction sales of goods like the container ship hypothetical. See infra text accompanying note 282.
647. Concerted opposition has so far doomed both a global Multilateral Agreement on Investment ("MAI") and an ICSID appeals facility. See James Salzman, Labor Rights, Globalization, and Institutions: The Role and Influence of the Organization for Economic Cooperation and Development, 21 MICH. J. INT'L L. 769, 804-31 (2000) (MAI) ;
648. Suggested Changes to the ICSID Rules and Regulations, ¶ 4 (ICSID Secretariat Working Paper, May 12, 2005), available at http://icsid.worldbank. org/ICSID/FrontServlet?requestType=IC-SIDPublicationsRH&actionVal= ViewAnnouncePDF&AnnouncementType=Archive&AnnounceNo=22-1.pdf. Along similar lines, it remains very much open to question whether anything will come out of the Doha round of WTO talks. World Trade Talks End in Collapse, BBC News, July 29, 2008, http://news.bbc.co.uk/2/hi/business/7531099.stm (suggesting that "the collapse of the Doha talks could symbolise an end to multilateral trade agreements").
649. While it is beyond the scope of this paper to explore the relevant game dynamics, it is at least conceivable that investor and state control over arbitrator nominations could have some effect. Cf. Paul Stephan, Courts, Tribunals, and Legal Unification - The Agency Problem, 3 CHI. J. INT'L L. 333 (2002). Even setting aside the two sides' conflicting incentives on this question once a live controversy has arisen, however, the nomination process is a very noisy method of exercising control since so many unrelated legal principles (each potentially outcome-determinative) are in play in any given arbitration.
650. See, e.g., Recent Developments in International Investment Agreements, UNCTAD/WEB/ITE/IIT/2005/1, at 6 (Aug. 30, 2005), http://www.unctad. Org/sections/dite-dir/docs//webiteiit20051-en.pdf (citing renegotiations of 85 BITs). In at least one case, this kind of revision has been directly targeted at adjusting the scope of covered investments. See Jan de Nul, N. V. v. Arab Republic of Egypt, ICSID Case No. ARB/04/13, Decision on Jurisdiction, ¶¶ 24-33 (June 16, 2006) (noting that the revised 2002 Egypt-BelgoLux BIT defined "investment" to include some forms of economic activity that had not been covered by its 1977 predecessor). Advocated for years by Latin American countries and incorporated into many Latin American investment contracts, constitutions, and laws-provided that foreign nationals could not be given rights beyond those provided to citizens by domestic law. It has largely, though not entirely, fallen by the wayside as a significant principle of international law, but the kind of regulatory deference proposed here might push things back in that direction. For a recent discussion of ways that the Calvo Doctrine retains some vitality
651. see Wenhua Shan, Is Calvo Dead?, 55 AM. J. COMP. L. 123 (2007).
652. Consider, for example, what the Joy Mining arbitrators viewed as a devastating reductio of the claimant's argument in that case: "if a distinction is not drawn between ordinary sales contracts, even if complex, and an investment, the result would be that any sales or procurement contract involving a State agency would qualify as an investment." Joy Mining v. Arab Republic of Egypt, ICSID Case No. ARB/03/11, Award on Jurisdiction, ¶ 58 (Aug. 6, 2004), reprinted in 44 I. L. M. 73 (2005) (emphasis added). My response would be: just so-and not only when one of the parties is a state agency.
653. See supra, text accompanying notes 221-225.
654. This is one place where dictionary definitions could make a difference under the Vienna Convention on the Law of Treaties. At least some of the definitions-though certainly not all of them-could support ruling out single-transaction sales of goods like the container ship hypothetical. See infra text accompanying note 282.
655. Concerted opposition has so far doomed both a global Multilateral Agreement on Investment ("MAI") and an ICSID appeals facility. See James Salzman, Labor Rights, Globalization, and Institutions: The Role and Influence of the Organization for Economic Cooperation and Development, 21 MICH. J. INT'L L. 769, 804-31 (2000) (MAI) ;
656. Suggested Changes to the ICSID Rules and Regulations, ¶ 4 (ICSID Secretariat Working Paper, May 12, 2005), available at http://icsid.worldbank. org/ICSID/FrontServlet?requestType=IC-SIDPublicationsRH&actionVal= ViewAnnouncePDF&AnnouncementType=Archive&AnnounceNo=22-1.pdf. Along similar lines, it remains very much open to question whether anything will come out of the Doha round of WTO talks. World Trade Talks End in Collapse, BBC News, July 29, 2008, http://news.bbc.co.uk/2/hi/business/7531099.stm (suggesting that "the collapse of the Doha talks could symbolise an end to multilateral trade agreements").
657. While it is beyond the scope of this paper to explore the relevant game dynamics, it is at least conceivable that investor and state control over arbitrator nominations could have some effect. Cf. Paul Stephan, Courts, Tribunals, and Legal Unification - The Agency Problem, 3 CHI. J. INT'L L. 333 (2002). Even setting aside the two sides' conflicting incentives on this question once a live controversy has arisen, however, the nomination process is a very noisy method of exercising control since so many unrelated legal principles (each potentially outcome-determinative) are in play in any given arbitration.
658. See, e.g., Recent Developments in International Investment Agreements, UNCTAD/WEB/ITE/IIT/2005/1, at 6 (Aug. 30, 2005), http://www.unctad. Org/sections/dite-dir/docs//webiteiit20051-en.pdf (citing renegotiations of 85 BITs). In at least one case, this kind of revision has been directly targeted at adjusting the scope of covered investments. See Jan de Nul, N. V. v. Arab Republic of Egypt, ICSID Case No. ARB/04/13, Decision on Jurisdiction, ¶¶ 24-33 (June 16, 2006) (noting that the revised 2002 Egypt-BelgoLux BIT defined "investment" to include some forms of economic activity that had not been covered by its 1977 predecessor).