CYIL vol. 13 (2022)

MONIKA FEIGERLOVÁ CYIL 13 ȍ2022Ȏ envisages the transfer of resources (of any kind) by the investor into the host country and the assumption of risk in the expectation of commercial return. In legal terms, two major approaches can be observed in treaty practice. 27 Traditional IIAs or so-called old generation IIAs, 28 which are still prevalent, contain a broad definition of investment and combine the general description (e.g., any kind of asset owned or controlled directly or indirectly by an investor) with a non-exhaustive list of examples. 29 Sector specific treaties, such as the Energy Charter Treaty reflects the asset-based approach and covers broad category of assets that are associated with the ‘Economic Activity in the Energy Sector’. 30 Under the second enterprise-based approach, an investment is defined as the establishment or acquisition of an enterprise. None of these approaches differentiate among investments in terms of their carbon intensity, technology used or achievement of particular objectives. Further, if a dispute is submitted to the International Centre for Settlement of Investment Disputes under the Washington Convention, the arbitral tribunal must also apply the criteria of Article 25 of the ICSID Convention. 31 The practice of tribunals has been diverse in the interpretation of Article 25, as it provides no specific characteristics of investment. 32 Most investment tribunals tended to apply an ‘ICSID definition of investment’ independently of the investment clause contained in the relevant IIA. 33 Recent treaty practice aims at excluding receivables arising from normal sales contracts or portfolio investments from the definition of investment and the treaty coverage. The IIAs also expressly require that investment must have the characteristics of an investment, i.e., a certain 27 ŠTURMA, P. and BALAŠ, V. Mezinárodní ekonomické právo. [ International Economic Law ] 2 nd Edition. Praha: C.H. Beck, 2013, pp. 350–351. 28 UNCTAD generally refers to agreements concluded between 1959 and 2011, i.e., before the launch of UNCTAD’s Investment Policy Framework for Sustainable Development in 2012, as old generation agreements. 29 Such enumeration typically includes: (a) movable and immovable property as well as any other rights in rem, such as mortgages, liens, and pledges; (b) shares of companies and other kinds of interest in companies; (c) claims to money which has been used to create an economic value or claims to any performance having an economic value; (d) intellectual property rights; (e) trade-names, trade and business secrets, technical processes, know-how, and goodwill; (f ) business concessions under public law, including concessions to search for, extract or exploit natural resources. This enumerative or asset-based definition approach can be also, although less frequently, seen in the reverse form of a closed or exhaustive list of assets that qualify as investment. See e.g., DOLZER, R. and SCHREURER, Ch. Principles of International Investment Law . 2 nd edition. Croydon: Oxford University Press, 2012, p. 64. 30 Economic Activity in the Energy Sector under the ECT is an economic activity that concerns the exploration, extraction, refining, production, storage, land transport, transmission, distribution, trade, marketing, or sale of Energy Materials and Products except those included in Annex NI or concerning the distribution of heat to multiple premises. The ‘Energy Materials and Products’, listed in Annexes EM I and EM II of the ECT, include nuclear energy, coal, natural gas, petroleum products, electrical energy, and other energy. 31 The Convention on the Settlement of Investment Disputes Between States and Nationals of Other States (Washington Convention), entered into force on 14 October 1966 (‘ICSID Convention’). 32 The ICSID Convention does not contain a definition of investment. Tribunals have taken different approaches in defining the concept of investment. For some, it was sufficient if the investment in question met only the criteria set out in the BIT. For others, the concept of investment has an inherent meaning and in this respect, several other features were required to be met. For details on the evolution of the approach to defining the concept of investment, see GAILLARD, E. Identify or Define? Reflections on the Evolution of the Concept of Investment in ICSID Practice. International Investment Law for the 21 st Century. Essays in Honour of Christoph Schreuer , Oxford University Press, 2009, pp. 403–416. 33 DOLZER, R. and SCHREURER, Ch. Principles of International Investment Law . 2nd edition. Croydon: Oxford University Press, 2012, p. 64.

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