International Investment Law and Arbitration Commentary, Awards and other Materials

This chapter, which should be read in conjunction with Chapter 11, addresses the first of two principal criteria for a dispute to enter the scope of submission to investment treaty arbitration – the existence of a protected investment. Whether an investment qualifies for treaty protection depends on the definition of a protected investment. This definition can be drawn from the terms of the applicable investment treaty (subjective) and/or from the typical features of investment projects (objective). Section 1 explores the rationale for relying solely on treaty terms to define protected investments. Section 2 considers the basis for and attempts to impart an objective definition, located outside the boundaries of the applicable treaty, to protected investments. Section 3 demonstrates how tribunals eschew voting for subjectivity or objectivity by examining both the treaty and non-treaty definitions of protected investments, eventually arriving at a dual meaning.