About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

4 J. World Investment 909 (2003)
When Pre-Investment or Development Costs May or May Not be Regarded as Part of Investment under Article 25(1) of the ICSID Convention - The Mihaley Case

handle is hein.journals/jworldit4 and id is 909 raw text is: When Pre-Investment or Development Costs May or May Not Be Regarded as Part of Investment under Article 25(1) of the ICSID Convention The Mihaly Case C. CHATTERJEE* 1. INTRODUCTION It is about forty years now that the Convention on the Settlement of Investment Disputes between States and Nationals of Other States, 1965 (the ICSID Convention) has been in operation,' and yet, in most of the cases referred to ICSID tribunals, the Respondents have raised objections to jurisdiction on the grounds either that consent had not been given by them or that the subject-matter of the disputes did satisfy the criteria of being an investment under the Convention. Recently, in the arbitration Mihaly International Corporation v. The Democratic Socialist Republic of Sri Lanka,2 the principal issue that an ICSID tribunal was asked to consider was whether any pre-investment expenditure-that is, expenditure incurred in preparatory work for an investment-should be regarded as part of an actual investment. In practice, in many cases, such expenditures are usually treated as part of an actual investment; in this case, it was decided that, in the absence of any actual consent given by the Respondent, such expenditures which were incurred by a foreign investor could not be regarded as expenditures forming part of the investment. It is the purpose of this article to discuss some of the important issues that were raised in this arbitration, namely, the status of pre-investment expenditures under the ICSID Convention and whether, on the basis of an alleged assignment of a claim by a private foreign investor, the government of which is not a party to the ICSID Convention, an ICSID tribunal may entertain a claim filed by a corporation eo nomine, the government of which was a party to the relevant bilateral investment treaty (BIT). * LL.M. (Cambridge), LL.M., Ph.D. (London); Barrister; Law Department, London Metropolitan University. It is understood that a second phase of this case has been considered by an lcsi Tribunal, but the award remains unpublished. The author may be contacted at: <c.chatterjee@londonmet.ac.uk. I This Convention came into force on 14 October 1966. 2 Case No. ARB/00/02, Final Award rendered 15 March 2002, Sompong Sucharitkul, President, Andrew Rogers and David Suratgar, Arbitrators, as reproduced in 41 International Legal Materials 867, 2002. The Award is also available at 17 ICsi Rev.-F.I.L.J. 142, 2002, 14 World Trade and Arbitration Materials 21, 2002, and <<http://www.worldbank.org/icsid/cases/mihaly-award.pd>.

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Short-term subscription options include 24 hours, 48 hours, or 1 week to HeinOnline.

Purchase Access

Contact us for annual subscription options:

Contact Us

Already a HeinOnline Subscriber?

Log In

profiles profiles most