Do the SALINI Criteria apply to the Definition of an Investment provided in Annex 1 of the 2006 and 2016 SADC Protocol on Finance and Investment? An Assessment

Do the SALINI Criteria apply to the Definition of an Investment provided in Annex 1 of the 2006 and 2016 SADC Protocol on Finance and Investment? An Assessment

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An investment is the subject matter of an investor-state dispute.Therefore there can be no such dispute if there is no investment to which the dispute relates.The challenge in this regard lies in that there is no uniform definition of an investment in international economic law, and with regard to investor-state disputes in particular.Bilateral Treaty Agreements (BITs), Treaties with Investment Provisions (TIPs), investment contracts and legislation provide different definitions of an investment.

However, these definitions are not always final or sufficient, since there are different methods of assessing the existence of an investment, depending on the applicable arbitration rules.Arbitration tribunals formed in terms of the Convention on the Settlement of Investment Disputes between States and Nationals of Other States of 1965 (ICSID Convention) follow a two-step process, which starts with a consideration of the definition of an investment in terms of the underlying regulatory instrument, followed by a consideration of the provisions of Article 25(1) of the ICSID Convention.Salini Construttori Table Top Game Accessories S.P.

A and Italstrade S.P.A v Kingdom of Morocco is a landmark ICSID case that proposed the criteria that an investment must meet.On the other here hand, investor-state arbitrations based on the UNCITRAL Rules Arbitration or other non-ICSID rules consider the definition of an investment provided in a regulatory instrument only.

However, the tribunal in Romak S.A (Switzerland) v Republic of Uzbekistan held that the Salini criteria are applicable to UNCITRAL arbitration, and by implication, other non-CSID arbitrations.The 2006 Annex 1 of the SADC Protocol on Finance and Investments (SADC FIP) defines an investment as any asset group, while the 2016 Annex 1 defines an investment as an incorporated enterprise.Furthermore, the 2006 Annex 1 refers disputes to ICSID or UNCITRAL arbitration, while the 2016 Annex 1 refers disputes to the courts of host states.

This article explores the responses of selected tribunals to the Salini criteria.It seeks to determine whether the Salini criteria can be applied to the 2006 and/or 2016 Annex 1, and if so, what the implications thereof are to the scope of investments that can be covered by these instruments.