It is well established that numerous attempts to define investments were made during the

negotiations of the Convention1 but none were generally acceptable.2 Because of this
difficulty, it was finally decided to leave any definition of the "investment" to the consent of
the parties.3 As explained by the Report of the Executive Directors:
"No attempt was made to define the term 'investment' given the essential requirement
of consent by the parties, and the mechanism through which Contracting States can
make known in advance, if they so desire, the classes of disputes which they would or
would not consider submitting to the Centre (Article 25 (4»."4
An account on these negotiations given by Mr. A. Broches is also most pertinent:
"During the negotiations several definitions of 'investment' were considered and
rejected. It was felt in the end that a definition could be dispensed with 'given the
essential requirement of consent by the parties.' This indicates that the requirement
that the dispute must have arisen out of an 'investment' may be merged into the
requirement of consent to jurisdiction. Presumably, the parties' agreement that a
dispute is an 'investment dispute' will be given great weight in any determination of
the Centre's jurisdiction, although it would not be controlling.5

In light of the above, distinguished commentators of the Convention have concluded that "a
broad approach to the interpretation of this term in Article 25 is warranted," 6 that it "is within
the sole discretion of each Contracting State to determine the type of investment disputes that
it considers arbitrable in the context of ICSID," 7 or that the parties "thus have a large measure
of discretion to determine for themselves whether their transaction constitutes an investment
for the purposes of the Convention.,8 Within this broad framework for the definition of
investment under the ICSID Convention. the Tribunal also notes that a number of transactions
have been identified as qualifying as investments in given circumstances. It has also been
noted by commentators of the Convention, and during the history of its negotiation. that

1
Christoph Schreuer: "Commentary on the ICSID Convention," ICSID Review - Foreign Investment Law
Journal, Vol. 11, 1996, 316. at 355-358.
2
2 ICSID: Documents Concerning the Origin and the Fonnulation of the Convention, 1968. Vol. II at 835-837
3
Ibid., at 1078; Carolyn B. Lamrn and Abby Cohen Smutny: "The implementation ofICSID Arbitration
Agreements," ICSID Review -- Foreign Investment Law Journal, Vol. 11, 1996,64, at 80.
4
''Report of the Executive Directors on the Convention on the Settlement of Investment Disputes between States
and Nationals of Other States," Doc. ICSID/2, 1 ICSID Reports, 1993, 23, para 27.
5
A. Broches: "The Convention on The Settlement of Investment Disputes: Some Observations on Jurisdiction,"
Columbia Journal of Transnational Law, Vol. 5,1966,261-280, at 268
6
C. F. Amerasinghe: "The Jurisdiction of the International Centre for the Settlement of Investment Disputes,"
Indian Journal of International Law, Vol. 19, 1979, 166-227, at 181.
7
Georges R. Delaume: "ICSID and the Transnational Financial Community;" ICSID Review - Foreign
Investment Law Journal, Vol. I, 1986, 237-256, at 239-240; Ibrahim F.I. Shihata: ''Towards a Greater
Depoliticization of Investment Disputes: The Roles of ICSID and MIGA," ICSID Review - Foreign Investment
Law Journal, Vol. 1, 1986, I, at 4.
8
Lamm and Smutny, loco cit., supra note 9, at 80.
jurisdiction over loans9 suppliers' credits10 outstanding payments11 ownership of shares12 and
construction contracts13 among other aspects, was left to the discretion of the parties14

the text of Article 25(1) establishes that the 'jurisdiction of the Centre shall extend to any legal
dispute arising directly out of an investment" It is apparent that the term "directly" relates in
this Article to the "dispute" and not to the ''investment.'' It follows that jurisdiction can exist
even in respect of investments that are not direct, so long as the dispute arises directly from
such transaction. This interpretation is also consistent with the broad reach that the term
"investment" must be given in light of the negotiating history of the Convention.

Precisely because the term "investment" has been broadly understood in the ICSID practice
and decisions, as well as in scholarly writings, it has never before been a major source of
contention before ICSID Tribunals.15 This is the first ICSID case in which the jurisdiction of
the Centre has been objected to on the ground that the underlying transaction does not meet
the requirements of an investment under the Convention. On prior occasions ICSID Tribunals
have examined on their own initiative the question whether an investment was involved, 16 and
in each such case have reached the conclusion that the "investment" requirement of the
Convention has been met in Kaiser case 17 as in Alcoa Minerals case. 18 The Tribunal
established the Centre's jurisdiction both on the consent given by the parties and on the fact
that the case "in which a mining company has invested substantial amounts in a foreign State
in reliance upon an agreement with that State, is among those contemplated by the
Convention." Amounts paid out to develop a concession and other undertakings based on a
concession agreement, were also considered to qualify as an investment under the Convention
in LEICO case.19 Also in SOABI case the Tribunal considered the issue of jurisdiction in
respect of an operation encompassing separate agreements, but this dealt only indirectly with
the existence of an investment.20

A broad definition of investment such as that included in the Agreement is not at all an
exceptional situation. On the contrary, most contemporary bilateral treaties of this kind refer
to "every kind of asset" or to "all assets," including the listing of examples that can qualify for
coverage; claims to money and to any performance having a financial value are prominent

9
Convention Historv. Vol. II, at 261, 474.
10
Ibid., at 451.
11
Ibid., at 542.
12
Ibid., at 661.
13
Ibid., at 500.
14
Schreuer,loc. cit., supra note 7, at 357; Amerasinghe, loco cit., supra note 12, at 181.
15
Lamm and Smutny, loc. cit., supra note 9, at 80; Schreuer, 10c. cit., supra note 7, at 360.
16
Schreuer, loc. cit., supra note 7, at 360; Lamrn and Smutny, loco cit., supra note 9, at 80.
17
Kaiser Bauxite Company V. Government of Jamaica, 1975, 1 ICSID Reports, 1993,296.
18
Alcoa Minerals of Jamaica Inc. V. Government of Jamaica, 1975, Yearbook Commercial Arbitration, Vol. IV,
1979,206.
19
Liberian Eastern Timber Corporation V. Government of the Republic of Liberia, 1984, 2 ICSID Reports, 1994,
346.
20
Societe Ouest Africaine des Betons Industriels V. State of Senegal, 1988,2 ICSID Reports 1994, 165
features of such listings.21 This broad approach has also become the standard policy of major
economic groupings such as the European Communities. In providing for the protection of
investments the EC have included "all types of assets, tangible and intangible, that have an
economic value, including direct or indirect contributions in cash, kind or services invested or
received." Among the transactions listed as investments are "stocks, bonds, debentures,
guarantees or other financial instruments of a company, other firm, government or, other
public authority or an international organization; claims to money, goods, services or other
performance having economic value.'''22
Since the Kingdom of the Netherlands is a prominent member of the European Communities,
it is hardly surprising that a similar approach has been followed in its bilateral investment
treaties.23 Indeed, only very exceptionally do bilateral investment treaties explicitly relate the
definition of the assets or transactions included in this concept to questions such as the
existence of a lasting economic relation24 or specifically associate titles to money and similar
transactions strictly to a concept of investment.25
A similar trend can be identified in the context of major multilateral instruments. It has been
rightly noted that the World Bank Guidelines on the Treatment of Foreign Direct
[Link] are not at all restricted to "direct" investments. 26 The explanatory Report makes
clear that there are no restrictions in this context as to the nature of covered investments and
that the Guidelines are applicable to "indirect, as well as to direct, investments and to modem
contractual and other forms of investment," 27 The Energy Charter Treaty28 and Mercosur
Protocols'29 have included "every kind of asset," the former listing "claims to money and
claims to performance pursuant to certain contracts," and the latter referring to "claims to
performance having an economic value." 30 Again only exceptionally has a multilateral treaty
strictly related the listing of given assets such as interests to equity investments, or excluded
claims to money that arise solely from commercial contracts for the sale of goods or
services.31
21
Antonio R. Parra: ''The scope of new investment laws and international instruments," in Robert Pritchard (cd.):
Economic Development Foreign Investment and the Law, 1996, 27-44, at 35-36; "ICSID and Bilateral
Investment Treaties," News from ICSID. VoL 2, No.1, 1985, 12-20, at 19-20
22
Council of the European Communities: "Community position on investment protection principles in the ACP
States," ACP-CEE 2172192, 3 November 1992, at 5.
23
See for example the Agreement between the Kingdom of the Netherlands and the Republic of Paraguay on
Encouragement and Reciprocal Protection of Investments. 29 October 1992, in Alejandro A. Escobar:
"Introductory Note on Bilateral Investment Treaties Recently Concluded by Latin American States," ICSID
Review - Foreim Investment Law Journal, Vol. II, 1996,86-220, at 197.
24
See, for example, the Agreement concerning the promotion and reciprocal protection of investments between
Denmark and Ukraine, 23 October 1992, Anicle 1, as cited in Parra, loco cit.. supra note 40, at 36.
25
See for example the Agreement between the United States and Zaire of 3 August 1984, Article I, in News from
ICSID cit., supra note 4O,at20.
26
Parra, loco cit, supra note 40, at 40.
27
''Report to the Development Committee on the legal framework for the treatment of foreign investments, ~
accompanying the Guidelines cit, supra note 45, para. 13.
28
Energy ChanerTreaty, 17 December 1994. International Legal Materials, Vol. 34,1995.360, Article 1 (6), and
comments by Parra, loco cit, supra note 40, at 40-41.
29
MERCOSUR: Protocol on the Reciprocal Promotion and Protection of Investments in Mercosur, Colonia, 17
January 1994, Article 1 (1); and Protocol for the promotion and protection of investments made by countries that
do not belong to Mercosur, Buenos Aires, 5 August 1994, Article 2; and comments by Parra, loco cit, supra note
40, at 40-41.
30
Parra, loco cit, supra note 40, at 41.
31
Nonh American Free Trade Agreement, 17 December 1992, International Legal Materials, Vol. 32,
1993,289,605, Article 1139, and comments by Parra, loco cit, supra note 40, at 42.