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29 J. Int'l Arb. 363 (2012)
Meaning of Investment as a Requirement for Jurisdiction Ratione Materiae of the ICSID Centre, The

handle is hein.kluwer/jia0029 and id is 371 raw text is: The Meaning of 'Investment' as a Requirement
for Jurisdiction Ratione Materiae of the ICSID
Laurens J.E. TIMMER*
It follows from Article 25 of the ICSID Convention that the ICSID Centre has jurisdiction
only if the dispute arises from an 'investment'. Despite the importance of this term, there is a
fundamental lack of consensus on its meaning. Although the general view appears to be that the
term 'investment' under Article 25 of the ICSID Convention has some objective meaning that
is not at the disposition of the parties, not every tribunal has explicitly accepted the existence of
these outer limits to the Centre's jurisdiction. The tribunals that do accept these outer limits are
divided on the relevant characteristics that can be used to identify the term 'investment' and the
nature and meaning of these characteristics. A divide has been recognized by tribunals and legal
commentators between the jurisdictional' and a 'typical characteristics' approaches when
considering abstract criteria relevant for 'defining' or 'identifying' the existence of an investment
under Article 25 of the Convention. After considering recent case law, this article proposes that a
hybrid between these two approaches can be identified. On the one hand, the concept of using
abstract criteria as mandatory requirements to test the existence of an investment is consistently
rejected. On the other hand, exception has been made by several tribunals which have required
that the claimed investment should at a minimum be suitable to contribute to the economic
development of the host State. The author of this article considers this to be a reasonable
approach and in line with the purpose of the ICSID Convention.
It follows from Article 25 of the ICSID Convention that one of the prerequisites
for jurisdiction of the ICSID Centre is that the legal dispute arises directly out of
an 'investment'. The meaning of the term 'investment' is therefore essential to
establish jurisdiction ratione materiae of the Centre and key in defining the types of
disputes that can be settled by ICSID tribunals.' Despite - and because of - the
importance of the term, it has not been given a definition by the Herren der
LL.B., LL.M. (University of Groningen); LL.M. Candidate at the University of Edinburgh. The author
would like to express his gratitude to Dr. James Harrison at the University of Edinburgh Law School
for his feedback.
R. Dolzer & C.H. Schreuer, Principles of International Investment Law 60 (Oxford University Press
Timmer, Laurens J.E.. 'The Meaning of'Investment' as a Requirement for Jurisdiction Ratione Materiae of
the ICSID Centre'. Journal of International Arbitration 29, no. 4 (2012): 363-374.
O 2012 Kluwer Law International BV, The Netherlands

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