Nikita Appaswam in this article talks about the central and peripheral issues regarding the confusion that often boggles both the Bilateral Investment Treaty (BIT) parties as well as tribunals regarding what economic enterprise suffices as ‘investment’
Abstract
Supposing for a moment that X, an investor from say Cambodia, visits India to overlook and supervise her investment there and en route gets hit by a motorcyclist while X was taking a sojourn in a tourist village. Will the International Convention on Settlement of Investment Disputes (ICSID) decide to hear the matter? Does it fall under its jurisdiction? The answer is most probably not as, though there is a vague attribution to ‘investment’ issues in this example, ICSID will refrain from entertaining claims because of the lack of relation between the matter in issue and the investment itself. But supposing again, X was injured en route to her factory or back, then this matter would fall under the ambit of ICSID. Now the confusion is as to what activity can be called an ‘investment’. Is the
ICSID justified in construing the definition in such a restrictive scope when the Convention itself has refrained from giving a form to it?
This article, will discuss in depth the central and peripheral issues regarding the confusion that often boggles both the Bilateral Investment Treaty (BIT) parties as well as tribunals regarding what economic enterprise suffices as ‘investment’. The author has discussed two very prevalent approaches to this viz the restrictive and deferential approach. Though there are pros and cons to both, the author has found that every approach has its roots in the consent agreement between the contracting parties itself. Thus, flexibility given to States and flexibility practiced by ICSID in determining the scope of an activity will douse the perplexity and difficulty in adjudging cases before the ICSID Tribunals.