The contribution of foreign investments to the economic development of host states as a jurisdictional requirement under the ICSID Convention
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This thesis addresses the problem concerning the contribution of foreign investments to the economic development of the host State as a jurisdictional requirement under the Washington Convention on the Settlement of Investment Disputes between States and Nationals of Other States (“ICSID Convention”). The ICSID Convention governs the jurisdiction of the International Centre for Settlement of Investment Disputes for the institution of arbitral proceedings between Contracting States and nationals of other Contracting States. While the institution of arbitral proceedings under the ICSID Convention is contingent upon the consent of the disputing parties, the jurisdiction of the Centre is limited to disputes that fulfill certain requirements. One of the core requirements of the jurisdiction of the Centre is that the dispute must arise out of an investment. Although the ICSID Convention lacks a definition of investment, most arbitral tribunals that had to define the function and content of the investment requirement concluded that the ICSID Convention contains a notion of investment that may not be waived by the consent of the disputing parties. The majority of these decisions considered that the contribution to the economic development of the host State would be one of the elements of such notion of investment. According to these decisions, the economic development requirement, as an element of the investment requirement of the ICSID Convention, could be inferred from the wording of the first recital of the Preamble of the ICSID Convention, which states that the ICSID Convention was concluded considering the role of private international investments in the economic development. It is submitted in this thesis, however, that these decisions were based on a misapplication of the general rule of treaty interpretation of the Vienna Convention on the Law of Treaties, which codified the existing customary international law rule of treaty interpretation, given that they ignore the ordinary meaning of the term “investment” as employed in the ICSID Convention. The general rule of treaty interpretation of the Vienna Convention establishes a method by which each source of the intention of the parties to the treaty plays a relevant role. Above all, treaty interpretation must be based on the text of the treaty, which must be interpreted in accordance with the ordinary meaning of its terms. The use of the object and purpose of a treaty is a second step and may not be relied on in order to contradict the ordinary meaning of the terms employed in the treaty and to confer a special meaning on them.
AuthorsCastro de Figueiredo, Roberto
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