Do the SALINI Criteria apply to the Definition of an Investment provided in Annex 1 of the 2006 and 2016 SADC Protocol on Finance and Investment? An Assessment
DOI:
https://doi.org/10.17159/1727-3781/2020/v23i0a5132Keywords:
India Model BIT;, ICSID Rules of Arbitration, ICSID Convention, Investment, Romak v Uzbekistan, SADC FIP, Bernhard von Pezold v Zimbabwe, Salini v Morocco, Pan African Investment Code, UNCITRAL Rules of ArbitrationAbstract
An investment is the subject matter of an investor-state dispute. Therefore there can be no such dispute if there is no investment to which the dispute relates. The challenge in this regard lies in that there is no uniform definition of an investment in international economic law, and with regard to investor-state disputes in particular. Bilateral Treaty Agreements (BITs), Treaties with Investment Provisions (TIPs), investment contracts and legislation provide different definitions of an investment. However, these definitions are not always final or sufficient, since there are different methods of assessing the existence of an investment, depending on the applicable arbitration rules. Arbitration tribunals formed in terms of the Convention on the Settlement of Investment Disputes between States and Nationals of Other States of 1965 (ICSID Convention) follow a two-step process, which starts with a consideration of the definition of an investment in terms of the underlying regulatory instrument, followed by a consideration of the provisions of Article 25(1) of the ICSID Convention. Salini Construttori S.P.A and Italstrade S.P.A v Kingdom of Morocco is a landmark ICSID case that proposed the criteria that an investment must meet. On the other hand, investor-state arbitrations based on the UNCITRAL Rules Arbitration or other non-ICSID rules consider the definition of an investment provided in a regulatory instrument only. However, the tribunal in Romak S.A (Switzerland) v Republic of Uzbekistan held that the Salini criteria are applicable to UNCITRAL arbitration, and by implication, other non-CSID arbitrations. The 2006 Annex 1 of the SADC Protocol on Finance and Investments (SADC FIP) defines an investment as any asset group, while the 2016 Annex 1 defines an investment as an incorporated enterprise. Furthermore, the 2006 Annex 1 refers disputes to ICSID or UNCITRAL arbitration, while the 2016 Annex 1 refers disputes to the courts of host states. This article explores the responses of selected tribunals to the Salini criteria. It seeks to determine whether the Salini criteria can be applied to the 2006 and/or 2016 Annex 1, and if so, what the implications thereof are to the scope of investments that can be covered by these instruments.
Downloads
References
BIBLIOGRAPHY
Literature
Andreeva Y “Salvaging or Sinking the Investment - MHS v Malaysia Revisited,” 2008 (7) The Law and Practice of International Courts Tribunals 161-176
Bechky PS “International Adjudication of Land Disputes: For Development and Transnationalism” 2014 (7) The Law and Development Review 313-327
Burger L “The Trouble with Salini (Criticism of and Alternatives to the Famous Test)” 2013 (31) ASA Bulletin 521-536
Demirkol B “The Notion of Investment in International Investment Law” 2015 (1) The Turkish Commercial Law Review 41-49
Desierto DA “Development as an International Right: Investment in the New Trade-Based IIAs” 2011 (3) Trade Law and Development 296-333
Dolzer R and Schreuer C Principles of International Investment Law 2nd ed (Oxford University Press Oxford 2012)
Dupont P “The Notion of ICSID Investment: Ongoing Confusion or Emerging Synthesis” 2011 (12) Journal of World Investment and Trade 245-272
Engfeldt HJ “Should ICSID Go Gangnam Style in Light of Non-Traditional Foreign Investments Including Those Spurred on by Social Media - Applying and Industry-Specific Lens to the Salini Test to Determine Article 25 Jurisdiction” 2014 (32) Berkeley Journal of International Law 44-63
Exelbert JM “Consistently Inconsistent: What Is a Qualifying Investment under Article 25 of the ICSID Convention and Why the Debate Must End” 2016 (85) Fordham Law Review 1243-1279
Fellenbaum J “GEA v Ukraine and the Battle for Treaty Interpretation
Principles over the Salini Test” 2011 (27) Journal of Arbitration International 249-266
Garay J “Abuse of Process through Corporate Restructuring of Assets: The Legal Standard for the Multinational Investor” 2017 (35) Boston University International Law Journal 397-424
Grabowski A "The Definition of Investment under the ICSID Convention: A Defence of Salini" 2014 (15) (1) Chicago Journal of International Law: Article 13
Martin A “Definition of Investment: Could a Persistent Objector to the Salini Tests Be Found in ICSID Arbitral Practice” 2011 (11) 2 Global Jurist 1-19
Musurmanov IU “The Implications of Romak v Uzbekistan for Defining the Concept of Investment” 2013 (20) Australian International Law Journal 105-129
Okpe FO “The Definition of Investment and the ICSID Convention: Matters Arising under the Nigerian Investment Promotion Act and International Investment Law” 2017 (8) Journal of Sustainable Development Law and Policy 133-154
Schreuer C The ICSID Convention: A Commentary 2nd ed (Cambridge
University Press Cambridge 2009)
Vargiu P “Beyond Hallmarks and Formal Requirements: A Jurisprudence Constante on the Notion of Investment in the ICSID Convention” 2009 (10) The Journal of World Investment and Trade 753-768
Yala F “The Notion of “Investment” in ICSID Case Law: A Drifting Jurisdictional Requirement?” in Reinisch (ed) Classics in International Investment Law Volume II at 112-123
Case Law
Abaclat and Others (Case Formerly known as Giovanna A Beccara And Others) v The Argentine Republic (ICSID Case No. ARB/07/05) Decision on Jurisdiction and Admissibility of 4 August 2011
Alex Genin, Eastern Credit Limited, Inc. and A.S Baltoil v Republic of Estonia (ICSID Case No. ARB/99/2) Award of 25 June 2001
Alpha Projektholding GMBH v Ukraine (ICSID Case No. ARB/07/16)
Award of 8 November 2010 para 254
Ambiente Ufficio S.P.A and Others (Case Formerly known as Giordano Alpi and Others) v The Argentine Republic (ICSID Case No. ARB/08/9) Decision on Jurisdiction and Admissibility of 8 February 2013
Azurix Corp. v The Argentine Republic (ICSID Case No. ARB/01/12) Decision on Annulment of 1 September 2009
Bayindir Insaat Turizm Ticaret Ve Sanayi A.S v Islamic Republic of
Pakistan (ICSID Case No. ARB/03/29) Decision on Jurisdiction of 14 November 2005
Bernadus Hendricus Funekkotter and others v Republic of Zimbabwe (ICSID Case No. ARB/05/6) Award of 22 April 2009
Bernhard Von Pezold and Others v Republic of Zimbabwe (ICSID Case
No.ARB/10/15) Award of 28 July 2015
Biwater Gauff (Tanzania) v United Republic of Tanzania (ICSID Case No ARB/05/22) Award of 24 July 2008
Burlington Resources Inc v Republic of Ecuador (ICSID Case No. ARB/08/5) Decision on Jurisdiction of 2 June 2010
Camuzzi International S.A v the Argentine Republic (ICSID Case No. ARB/03/2) Decision on Objections to Jurisdiction of 11 May 2005
Ceskoslovenska Obchodni Banka, A.S. v Slovak Republic (ICSID Case No.
ARB/97/4) Decision of the Tribunal on Objections to Jurisdiction of 24 May 1999 (CSOB AES Corporation v The Argentine Republic (ICSID Case No. ARB/02/17) Decision on Jurisdiction of 26 April 2005
CMC Muratori Construction CMC Di Ravenna SOC. Coop, CMC MuratoriCementisti CMC Di Ravenna SOC. Coop A.R.L Maputo Branch and CMC Africa, CMC Africa Austral, LDA v Republic of Mozambique (ICSID Case No. ARB/17/23), pending
CMS Gas Transmission Company; Enron Corporation and Ponderosa Assets LLP v The Argentine Republic (ICSID Case No. ARB01/3) Decision on Jurisdiction (Ancillary Claim) of 2 August 2004
Consorzio Goupemente L.E.S.I-DIPENTA (Italy) v Peoples Democratic Republic of Algeria ICSID Case No. ARB/03/08 (Award) of 10 January 2005
(DS)2, S.A, Peter de Sutter and Kristof de Sutter v Republic of Madagascar (ICSID Case No. ARB/17/18), pending
Eco Development in Europe AB & others v United Republic of Tanzania (ICSID Case No. ARB/17/33), pending
Enron Corporation and Ponderosa Assets LLP v The Argentine Republic ICSID Case No. ARB01/3 (Decision on Jurisdiction) (Ancillary Claim) of 2 August 2004
Fedax N.V. v The Republic of Venezuela (ICSID Case No. ARB/96/3) Decision of the Tribunal on Objections to Jurisdiction of 11 July 1997
GEA Group AktienGesellschaft v Ukraine (ICSID Case No. ARB/08/16) Award of 31 March 2011
Generation Ukraine Inc. v Ukraine (ICSID Case No. ARB/00/9) Award of 16 September 2003
Global Trading Resource Corp. and Globex International, Inc v Ukraine (ICSID Case No. ARB/09/11) Award of 1 December 2011
Grupo Francisco Hermando Contreras v Republic of Ecuador (ICSID Case No. ARB/(AF)/12/2) Award on Jurisdiction of 4 December 2015
Hassan Awdi, Enterprise Business Consultants, Inc, And Alfa El Corporation v Romania (ICSID Case No. ARB/10/13) Award of 2 March 2015
Hulley Enterprises Limited (Cyprus) v The Russian Federation (PCA Case
No. AA 226) Interim Award on Jurisdiction and Admissibility of 30 November 2009
Hulley Enterprises Limited (Cyprus) v The Russian Federation (PCA Case No. AA 226) Final Award of 18 July 2014
H&H Enterprises Investments Inc. v Arab Republic of Egypt (ICSID Case No. ARB/09/15) Decision on Jurisdiction of 5 June 2012
Inmaris Perestroika Sailing Maritime Services GMBH v Ukraine ICSID Case No. ARB/08/8 (Decision on jurisdiction) of 8 March 2010
Ioannis Kardassopoulos and Ron Fuchs v The Republic of Georgia (ICSID Case No. ARB 05/18 and 07/15) Award of 3 March 2010
Joy Mining v Arab Republic of Egypt ((ICSID Case No. ARB/03/11) Award on Jurisdiction of 6 August 2004 Nordzucker AG v The Republic of Poland (Ad hoc Tribunal) Partial Award of 10 December 2008
KT Asia Investment Group B.V v Republic of Kazakhstan (ICSID Case No. ARB 09/8) Award of 17 October 2013
Lao Holdings N.V. v Lao People’s Democratic Republic (ICSID Case No. ARB (AF)/12/6) Decision on Jurisdiction of 21 February 2014
LTME Mauritius and Madamobil Holdings Mauritius Limited v Republic of Madagascar (ICSID Case No. ARB/17/28), pending
Malaysian Historical Salvors Sdn, BHD v The Government of Malaysia (ICSID Case No. ARB/05/10) Award on Jurisdiction of 17 May 2007
Mavrommatis Palestine Concessions Case 1924 P.C.I.J. Ser. A, No. 2, 11-12
Mohamed Abdulmohsen Al-Kharafi and Sons Co. Kuwaiti Company v The
Government of The State of Libya and Others (PCA Case No. 2011-09) Award on Merits of 2 March 2015
Millicom International Operations B.V. and Sentel GSM Claimants v The Republic of Senegal (ICSID Case No. ARB/08/20) Decision on Jurisdiction of 16 July 2010
Mr Frank Charles Araf v Republic of Moldova (ICSID case No. ARB/11/23) Award of 8 April 2013
Mr Patrick H. Mitchell v The Democratic Republic of Congo (ICSID Case No. ARB/99/7 Excerpts from Award of 9 February 2004
Mr Patrick Mitchell v The Democratic Republic of Congo (ICSID Case No. ARB/99/7) Decision on Annulment of Award of 1 November 2006
Noble Energy Inc. and Machala Power Cía. Ltd. v Republic of Ecuador and Consejo Nacional de Electricidad (ICSID Case No. ARB/05/12) Decision on Jurisdiction of 5 March 2008
Nova Scotia Power Incorporated (Canada) v. Bolivarian Republic of Venezuela (ICSID Case No. ARB (AF)/11/1) Excerpts of Award of 30 April 2014
Philip Morris Brand SARL, Philip Morris Products S.A, Abal Hermanos S.A v Oriental Republic of Uruguay (ICSID Case No. ARB10/7) Award of 8 July 2016
Phoenix Action, Ltd v The Czech Republic (ICSID Case No. ARB/06/05) Award of 15 April 2009
Quiborax S.A, Non-Metallic Minerals S.A and Alan Fosk Kaplun v Plurinational State of Bolivia (ICSID Case No. ARB/06/02) Decision on Jurisdiction of 27 September 2012
Romak S.A (Switzerland) v Republic of Uzbekistan (PCA Case No. AA280) Award of 26 November 2009
SAIPEM S.p.A v The Peoples Republic of Bangladesh (ICSID Case No. ARB/05/07) Decision on Jurisdiction of 21 March 2007
Salini Construttori S.P.A and Italstrade S.P.A v Kingdom of Morocco (ICSID Case No. ARB 00/4) Decision on Jurisdiction of 16 July 2001
Sempra Energy International v The Argentine Republic (ICSID Case No. ARB/02/16) Decision on Objections to Jurisdiction of 11 May 2005
SGS Socie?te? Ge?ne?rale de Surveillance S.A. v The Republic of Paraguay (ICSID Case No. ARB/07/29) Award of 10 February 2012
Siemens AG v The Argentine Republic (ICSID Case No. ARB/02/8) Decision on Jurisdiction of 3 August 2004; Socie?te? Ge?ne?rale de Surveillance S.A. v Islamic Republic of Pakistan (ICSID Case No. ARB/01/13) Decision of the Tribunal on Objections to Jurisdiction of 6 August 2003
Socie?te? Generale In respect of DR Energy Holdings Limited and Empresa Distribuidora de Electricidad del Este, S. A. v The Dominican Republic (UNCITRAL Arbitration, LCIA Case No. UN 7927) Award on Preliminary Objections to Jurisdiction of 19 September 2008
Socie?te? Générale de Surveillance S.A. v Republic of the Philippines (ICSID Case No. ARB/02/6) Order of the Tribunal on Further Proceedings of 17 December 2007
Standard Chartered Bank v United Republic of Tanzania (ICSID Case No. ARB/10/12) Award of 2 November 2012
Teinver S.A., Transportes de Cercanías S.A. and Autobuses Urbanos del Sur S.A. v Argentine Republic (ICSID Case No. ARB/09/1) Decision on Jurisdiction of 21 December 2012
Thomas Gosling and others v Republic of Mauritius (ICSID Case No. ARB/16/32)
Tokios Tokelés v Ukraine (ICSID Case No. ARB/02/18) Decision on Jurisdiction of 29 April 2004
Veteran Petroleum Limited (Cyprus) v The Russian Federation (PCA Case No. AA 228) Interim Award on Jurisdiction and Admissibility of 30 November 2009
Veteran Petroleum Limited (Cyprus) v The Russian Federation (PCA Case No. AA 228) Final Award of 18 July 2014
Yukos Universal Limited (Isle-Of-Man Of Man) v The Russian Federation, (PCA Case No. AA 227) Interim Award on Jurisdiction and Admissibility of 30 November 2009
Yukos Universal Limited (Isle-Of-Man Of Man) v The Russian Federation, (PCA Case No. AA 227) Final Award of 18 July 2014
Legislation
The Natural Wealth and Resources Contracts (Review and Renegotiation of Unconscionable Terms) Act of 2017 (Tanzania)
The Natural Wealth and Resources (Permanent Sovereignty) Act, 2017, and The Written Law (Miscellaneous Amendments) Act of 2017 (Tanzania)
Internet sources
Acacia Announcement of 4 July 2017, <http://www.acaciamining.com/~/media/Files/A/Acacia/press-release/2017/update-on-developments-in-tanzania-20170704.pdf> accessed 25 October 2017
African Union (Tenth Joint Annual Meetings of the African Union Specialized Technical Committee on Finance, Monetary Affairs, Economic Planning and Integration and the Economic Commission for Africa Conference of African Ministers of Finance, Planning and Economic Development Dakar, 27 and 28 March 2017) “Pan African Investment Code”, <https://au.int/sites/default/files/documents/32844-doc-draft_pan-african_investment_code_december_2016_en.pdf> accessed 15 October 2017
AngloGold Ashanti Press Release of 13 July 2017 <https://thevault.exchange/?get_group_doc=143/1501167539-PR20170713Geita.pdf> accessed 25 October 2017
Convention on the Settlement of Investment Disputes between States and Nationals of Other States (with Rules and Regulations) 1965, amended to 2006, (ratified 14 September 1966, in force 14 October 1966), <https://icsid.worldbank.org/en/Documents/resources/2006%20CRR_English-> accessed 10 April 2018
Southern African Development Community Model Bilateral Treaty Template,
(Published July 2012), 12-13, available at http://www.iisd.org/itn/wp-content/uploads/2012/10/SADC-Model-BIT-Template-Final.pdf (Date of use: 18 January 2018)
UNCITRAL (2014) UNCITRAL Arbitration Rules 2013, United Nations, New York, <https://www.uncitral.org/pdf/english/texts/arbitration/arb-rules-2013/UNCITRAL-Arbitration-Rules-2013-e.pdf> accessed 15 November 2017
Vienna Convention on the Law of Treaties, 1155 UNTS 331, 1969 (8) ILM 679 (date of signature 23 May 1969, in force 27 January 1980), <https://treaties.un.org/doc/publication/unts/volume%201155/volume-1155-i-18232-english.pdf> accessed 31 October 2017
LIST OF ABBREVIATIONS
BIT Bilateral Investment Treaty
ICSID International Centre for the Settlement of Investment Disputes
PAIC Pan African Investment Code
SADC Southern African Development Community
TIP Treaty with Investment Provisions
UNCITRAL United Nations Commission on International Trade
Published
Issue
Section
License
Copyright (c) 2020 Lawrence Ngobeni
This work is licensed under a Creative Commons Attribution 4.0 International License.
.png){kind=spacer}