The Expansion Of The Definition Of Investment In ICSID Arbitration And Its Introspection

Almost all investment agreements give a definition of investment. Under the background of liberalization of international investment, the definition of investment shows a tendency of expansion both in agreements and in ICSID arbitration practice. The expansion of investment definition shows the value orientation of protecting personal property rights. However, it also increases the risk of abusing their rights of litigation by the investors. Therefore, it is necessary to confine the expansion of the definition of investment rationally, so as to make a win-win between investors and the host country. China being a country with double status of capital exporting and importing, its power of governing economy and the interests of overseas investment will be influenced by the expansion of the definition of investment. Accordingly, China should restrict the definition of investment when signing agreements with other countries, so as to achieve a balance between protecting overseas investment and using foreign investment.This paper focuses on the definition of investment in international investment arbitration practice by analyzing the cases of the tribunal of ICSID arbitration's explanation of the definition of investment and the reasons behind, in addition to making a contemplation on the influence of the expansion of the definition of investment. China should be clear about the latest tendency of the definition of investment in participating ICSID arbitration. Only in this way can we put forward useful proposals for the signature of the definition of investment clauses for now and in the future.Apart from the introduction and epilogue, the paper consists of three parts:The first part introduces the expansion of the definition of investment in ICSID arbitration. It mainly consists of foreign direct investment and indirect investment, such as financial instruments and services, awards and settlement agreements, pre-expenditures and so on. That amplifies the jurisdiction of the tribunals of ICSID arbitration. There are two reasons for the expansion of the definition of investment. One is the liberalization of investment and the other is the negligence of protecting the host countries' interests in the investment agreements and ICSID tribunals.The second part is an introspection of the expansion of investment definition. Firstly, the positive influence of the expansion of investment definition should be confirmed. Secondly, we should realize the problems that the trend produced. Finally, some modified projects may be put forward, namely the tribunals should have an unified standard for the explanation of investment definition, so as to avoid the inconsistent awards. The definition of investment should conform to the purpose of ICSID Convention and the domestic laws of the host countries, so that the illegal investment which may harm the interests of the host country could be avoided. In addition, goodwill as an important international legal principle should also be emphasized.The third part is mainly the Chinese countermeasures for the expansion of the definition of investment. We should distinguish investment origin countries and destination countries, and enter into different investment agreements according to our special circumstance. Since China has double status at present, we should take different kinds of strategies. As a capital exporting country, the scope of approval system should be widened and transformed into register system, and widen the definition of investment for overseas investment; in addition, it should sign the investment agreements vigorously and provide international legal basis for Chinese investors. As a capital importing country, measures shall be taken to avoid the random situation of foreign investors instituting ICSID arbitration randomly. In view of the fact that China has been sued to ICSID arbitration, we should take advantage ICSID arbitration mechanism positively and utilize the alternative mechanism of arbitration, namely judicial remedy, administrative remedy and consultation, and make the disputes addressed rapidly. In order to deal with issues before they happen, we should give a narrow definition of investment and exclude the protection of particular transaction and special industry, and stipulate that investment should make contribution to host states and pay great attention to the restrained effect of host countries' law to the definition of investment, that is to say, investment should be in conformity with Chinese domestic laws.