Certain duration is one of the four core criteria of the definition of investment in what is popularly referred to as the Salini test. As conceived originally by Christoph Schreuer,1 a certain duration is a necessary characteristic of an investment operation which is expected to constitute long-term relationship.
II. Travaux préparatoires of Article 25 ICSID Convention
Article 25 of the ICSID Convention does not include a definition of investment. However, the drafting history of this provision confirms that the duration criterion was considered relevant to the determination of the existence of an investment.2 A draft definition of investment referred to the contribution of money or assets “for an indefinite period or, if the period be defined, for not less than five years”.3 Finally, no definition of the term investment was included in the Convention.4
III. State practice
Agreement between the Kingdom of Morocco and Japan for the Promotion and Protection of Investment (signed 8 January 2020, not entered into force as of 17 March 2020) Art. 1(a); Investment Protection Agreement between the European Union and its Member States, of the One Part, and the Socialist Republic of Viet Nam, of the Other Part (signed 30 June 2019, not entered into force as of 17 March 2020) Art. 1.2(h); Investment Protection Agreement between the European Union and its Member States, of the One Part, and the Republic of Singapore, of the Other Part (signed 15 October 2018, not entered into force as of 17 March 2020) Art. 1.
IV. Arbitral practice
Duration has played a role in investment arbitration since before the Salini.7 The first cases in which the definition of investment utilized duration as one of the characteristics described by Schreuer were Fedax v Venezuela8 followed shortly thereafter by Salini v Morocco.9 These cases established certain duration as one of the four characteristics of the ‘Salini Test.’ The criteria are sometimes expanded upon10 and more often subtracted from,11 but certain duration consistently remains a core characteristic of what tribunals consider an ‘investment.’12
Liberian Eastern Timber Corporation v. Republic of Liberia, ICSID Case No. ARB/83/2, Award, 31 March 1986, para. 16.2; Texaco Overseas Petroleum Co. and California Asiatic Oil Company v. Libya, Award, 19 January 1977, para. 45; BP Exploration Company (Libya) Limited v. Government of the Libyan Arab Republic, Award (Merits), 10 October 1973, para. 43; Sapphire International Petroleums LTD. v. National Iranian Oil Company, Arbitral Award, 15 March 1963.
Joy Mining Machinery Limited v. Arab Republic of Egypt, ICSID Case No. ARB/03/11, Award on Jurisdiction, 6 August 2004, para. 53; Generation Ukraine, Inc. v. Ukraine, ICSID Case No. ARB/00/9, Award, 16 September 2003, para. 8.2; Raymond Charles Eyre and Montrose Developments (Private) Limited v. Democratic Socialist Republic of Sri Lanka, ICSID Case No. ARB/16/25, Award, 5 March 2020, para. 294; Capital Financial Holdings Luxembourg S.A. v. Republic of Cameroon, ICSID Case No. ARB/15/18, Award, 22 June 2017, paras. 418, 421; Joseph Houben v. Republic of Burundi, ICSID Case No. ARB/13/7, Award, 12 January 2016, para 112-114; Poštová banka, a.s. and Istrokapital SE v. Hellenic Republic, ICSID Case No. ARB/13/8, Decision on Partial Annulment, 29 September 2016, para. 82; Lundin Tunisia B. V. v. Republic of Tunisia, ICSID Case No. ARB/12/30, Award (Excerpts), 22 December 2015, para. 140; Philip Morris Asia Limited v. The Commonwealth of Australia, PCA Case No. 2012-12, Award on Jurisdiction and Admissibility, 17 December 2015, para. 502; KT Asia Investment Group B.V. v. Republic of Kazakhstan, ICSID Case No. ARB/09/8, Award, 17 October 2013, para. 207; Ascom Group S.A., Anatolie Stati, Gabriel Stati and Terra Raf Trans Traiding Ltd. v. Republic of Kazakhstan, SCC Case No. 116/2010, Award, 19 December 2013, para. 778; Ambiente Ufficio S.p.A. and others (formerly Giordano Alpi and others) v. Argentine Republic, ICSID Case No. ARB/08/9, Decision on Jurisdiction and Admissibility, 8 February 2013, paras. 365, 476, 484; Electrabel S.A. v. The Republic of Hungary, ICSID Case No. ARB/07/19, Decision on Jurisdiction, Applicable Law and Liability, 30 November 2012, para. 5.43; Quiborax S.A., Non-Metallic Minerals S.A. v. Plurinational State of Bolivia, ICSID Case No. ARB/06/2, Decision on Jurisdiction, 27 September 2012, para. 227; RSM Production Corporation v. Central African Republic, ICSID Case No. ARB/07/2, Decision on Jurisdiction and Liability, 7 December 2010, paras. 56, 68; Víctor Pey Casado and President Allende Foundation v. Republic of Chile, ICSID Case No. ARB/98/2, Award, 8 May 2008, para. 232-233; LESI, S.p.A. and Astaldi, S.p.A. v. People's Democratic Republic of Algeria, ICSID Case No. ARB/05/3, Decision on Jurisdiction, 12 July 2006, para. 72; Jan de Nul N.V. and Dredging International N.V. v. Arab Republic of Egypt, ICSID Case No. ARB/04/13, Decision on Jurisdiction, 16 June 2006, para. 91.
V. What is a “certain duration”?
Consortium R.F.C.C. v. Kingdom of Morocco, ICSID Case No. ARB/00/6, Decision on Jurisdiction, 16 July 2001, para. 62; Salini Costruttori S.p.A. and Italstrade S.p.A. v. Kingdom of Morocco, ICSID Case No. ARB/00/4, Decision on Jurisdiction, 23 July 2001, para. 54; Jan de Nul N.V. and Dredging International N.V. v. Arab Republic of Egypt, ICSID Case No. ARB/04/13, Decision on Jurisdiction, 16 June 2006, para. 93; Christian and Antoine Doutremepuich v. Mauritius, PCA Case No. 2018-37, Award on Jurisdiction, 23 August 2019, para. 191.
Saipem S.p.A. v. People's Republic of Bangladesh, ICSID Case No. ARB/05/7, Decision on Jurisdiction and Recommendation on Provisional Measures, 21 March 2007, paras. 101-102; Bayindir Insaat Turizm Ticaret Ve Sanayi A.S. v. Islamic Republic of Pakistan, ICSID Case No. ARB/03/29, Decision on Jurisdiction, 14 November 2005, paras. 132-133; Jan de Nul N.V. and Dredging International N.V. v. Arab Republic of Egypt, ICSID Case No. ARB/04/13, Decision on Jurisdiction, 16 June 2006, paras. 94-95; Consortium Groupement L.E.S.I. - DIPENTA v. People's Democratic Republic of Algeria, ICSID Case No. ARB/03/8, Award, 10 January 2005, para. 14.
Desierto, D.A., Deciding International Investment Agreement Applicability: The Development Argument, in Investment in Baetebs, F. (ed.), Investment Law within International Law: Integrationist Perspectives, Cambridge University Press, 2013, pp. 240-256.
Gaillard, E., Identify or Define? Reflections on the Evolution of the Concept of Investment in ICSID Practice, in Binder, C., Kriebaum, U., Reinisch, A., et al. (eds.), International Investment Law for the 21st Century: Essays in Honour of Christoph Schreuer, Oxford University Press, 2009, pp. 203-416.
Nakajima, K., Parallel Universes of Investment Protection? A Divergent Finding on the Definition of Investment in the ICSID Arbitration on Greek Sovereign Debts, Law and Practice of International Courts and Tribunals, Vol. 15, 2016, pp. 472-490.
Vargiu, P., Beyond Hallmarks and Formal Requirements: A “Jurisprudence Constante” on the Notion of Investment in the ICSID Convention, The Journal of World Investment & Trade, Vol. 10, 2009, pp. 753-768.
Williams, D. and Foote, S., Recent Developments in the Approach to Identifying an ‘Investment’ Pursuant to Article 25(1) of the ICSID Convention, in Brown, C., Miles, K. (eds.), Evolution in Investment Treaty Law and Arbitration, Cambridge University Press, 2011, pp. 42-64.