Recent Developments in International Investment Disputes

The report examines 17 arbitral awards from ICSID, UNCITRAL, and SCC tribunals between September 2010 and October 2011. It highlights ongoing controversies over the definition of 'investment,' including the inclusion of sovereign debt and commercial contracts. It discusses the 'pick and choose' approach to Most-Favoured Nation (MFN) clauses, the high threshold for proving expropriation, and the broad interpretation of Fair and Equitable Treatment (FET) standards. The document also notes the rejection of jurisdiction in cases where investors failed to prove 'real economic activity' or where national investment laws lacked explicit consent to international arbitration.

• Tribunals continue to diverge on the definition of 'investment,' with some adopting broad views that include sovereign debt instruments and others excluding purely commercial contracts.
• In the case of Abaclat v. Argentina, the tribunal ruled that security entitlements in Argentinian sovereign bonds were protected investments under the Italy-Argentina BIT, despite Argentina's argument that they were not made within its territory.
• The 'Salini test' remains a point of reference for defining ICSID investments, requiring elements such as contribution to the host state's development, duration, risk, and financial commitment, though some tribunals argue that BIT definitions should generally override this test.
• Some tribunals allow investors to use Most-Favoured Nation (MFN) clauses to 'cherry-pick' more favourable procedural or substantive provisions from other BITs concluded by the host state, such as shorter waiting periods for arbitration.
• Expropriation claims are difficult to prove; most claimants failed unless the state's actions substantially and permanently deprived the investment of economic value, as seen in Alpha v. Ukraine and RosInvestCo v. Russian Federation.
• The Fair and Equitable Treatment (FET) standard is being interpreted broadly, covering principles such as transparency, good faith, and the protection of legitimate expectations, and in some cases extending to the review of public tender processes.
• Jurisdiction may be denied if a claimant is deemed a 'shell company' lacking a physical seat or 'real economic activity' in the home country, as occurred in Alps Finance and Trade AG v. Slovak Republic.
• Tribunals in cases against Venezuela rejected jurisdiction based on the country's Investment Promotion and Protection Law, finding that the law's wording did not constitute explicit consent to ICSID arbitration.

APA

Bernasconi-Osterwalder, N., & Jha, V. (2011). Recent Developments in International Investment Disputes. International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/investment_treaty_cases_2010_2011.pdf

Chicago

Bernasconi-Osterwalder, Nathalie, and Vyoma Jha. Recent Developments in International Investment Disputes. International Institute for Sustainable Development, 2011. https://www.iisd.org/system/files/publications/investment_treaty_cases_2010_2011.pdf.

Wikipedia

{{cite report |last1=Bernasconi-Osterwalder |first1=Nathalie |last2=Jha |first2=Vyoma |title=Recent Developments in International Investment Disputes |publisher=International Institute for Sustainable Development |date=October 2011 |url=https://www.iisd.org/system/files/publications/investment_treaty_cases_2010_2011.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{bernasconiosterwalder2011recent, author = {Bernasconi-Osterwalder, Nathalie and Jha, Vyoma}, title = {{Recent Developments in International Investment Disputes}}, institution = {International Institute for Sustainable Development}, year = {2011}, month = oct, url = {https://www.iisd.org/system/files/publications/investment_treaty_cases_2010_2011.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }