The “contribution of assets” requirement of the Salini test was often overlooked by commentators and tribunals, probably due to its “I-know-it-when-I-see-it” nature. The recent award in KT Asia Investment Group B.V. v Republic of Kazakhstan, however, demonstrates that a failure to meet the contribution requirement may put to rest a claim of an offshore company used to conceal the identity of its owner.
It is widely recognized that under Article 25 of the ICSID Convention an investment must involve a “contribution” of assets. As explained by Douglas (para. 273), the prior contribution of assets into the economy of the host state is a natural quid pro quo for the state to accord th [...]
and Rapolas Kasparavičius, LAWIN
An abundant number of agreements have been and will be concluded between states and investors operating under the bilateral investment regime and even a larger number of negotiations will fail before reaching the final stage of signature. An investor may spend large sums of money with the aim of concluding an agreement with the state. If the final agreement is not signed, these investments may be lost. Is the bilateral investment regime able to assist investors where investors spend large sums of money and where the negotiations are terminated by the state? Would the investor only be able to recover its costs or could the state also be liable for the investo [...]
For centuries people have searched for the formula which may give them more gold. It may turn out that some investors have found it. As it will be explained, indirect investments through a chain of intermediary companies hides the risk of multiplication of claims and double recovery. But not according to the tribunal in Standard Chartered Bank v. United Republic of Tanzania (ICSID Case No. ARB/10/12, Award, 2 November 2012).
I. Standard Chartered Bank v. United Republic of Tanzania
This tribunal recently denied standing to an indirect investor by finding that:
“[P]rotection of the UK-Tanzania BIT requires an investment made by, not simply held by, an investor… (para. 257)
On April 22, 2013, representatives of Members States of the Bolivarian Alliance for the Americas (“ALBA” for its acronym in Spanish) met in Guayaquil, Ecuador. The purpose of the meeting was to discuss the manner in which their interests are affected by the activities carried out by transnational companies, under a reunion known as the First Ministerial Conference of Latin American States affected by Transnational Interests.
Founded in 2004, ALBA is an international cooperation organization which is mainly associated with socialist and social democratic governments, being its main purpose to achieve regional economic integration based on a vision of social welfare. Its current members ar [...]
and Oleg Temnikov
I. Bureau Veritas v. Republic of Paraguay
In the recent Further decision on objections to jurisdiction dated October 9, 2012 the tribunal in Bureau Veritas, Inspection, Valuation, Assessment and Control, BIVAC B.V. v. Paraguay (ICSID Case No. ARB/07/9) dismissed BIVAC’s claim based on violation of the fair and equitable standard by reasoning that the dispute relates to mere refusal to pay invoices under a pre-shipment inspection contract and that, in doing so, Paraguay has not acted “in a manner that is qualitatively different from an ordinary contracting party.” The tribunal thus upheld the traditional distinction between mere breach of contract and treaty breach st [...]
In Part I it was argued that the proper law applicable in the investor-State disputes under Article 42 (1) ICSID Convention depends on the substantive grounds of the investor’s claim. In support of this, I have outlined three factual scenarios and types of claims with evidence from case law. Part I dealt with host State domestic law and the direct relationship between investor and State. The ICSID case law on the latter supporting the analysis from Part I is as follows:
2.1. Case law examples
In SOABI v Republic of Senegal (ARB/82/1) there was a contract between the investor and the Government of Senegal. In para 5.02 of the award the Tribunal [...]