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The Guide to Construction Arbitration

Construction Disputes in Investment Treaty Arbitration

Introduction

Cross-border activity in the construction sector has seen exponential growth in recent years, with an increasing number of complex construction projects being awarded, particularly in developing economies. The nature and importance of such projects means that they can be prone to political interference, unpredictable government policy or simply impacted by general economic instability.

In certain cases, for example, where the state is not the contractual counterparty, interference with or violations of a contractor's rights by the state will not give rise to a breach of contract, leaving investors without a remedy. In other cases, projects may be impacted by state measures not specifically directed at them. For instance, following Argentina's 2001 financial crisis, the Argentine government's enactment of a ‘pesification' law had the effect of devaluing investments in various construction concession projects.[2] Within the five years following the Argentinian financial crisis, 37 investment treaty claims across all sectors were filed against Argentina.[3]

With the increased use of public-private partnership (PPP) investment vehicles and joint ventures with state-owned entities, host states may commit to long-term project structures only to encounter financial insecurity years down the line, resulting in the state's postponement, frustration or cancellation of the project.

International construction contractors should therefore be attuned to the protections provided by international investment agreements (IIAs) (either bilateral - BITs;[4] or multilateral - MITs[5]) that may offer an alternative (or in some cases the only) remedy against political sovereign risk.

Despite some initial reluctance by investment treaty tribunals, investment claims under IIAs in the construction industry are now common. Indeed, there has been a steady increase in investment disputes in the construction sector with the United Nations Conference on Trade and Development (UNCTAD) reporting 22 pending and 47 concluded construction-related investment arbitration disputes.[6] The International Centre for Settlement of Investment Disputes' (ICSID) caseload statistics (cases registered or administered) similarly reflect this upward trend,[7] with construction and infrastructure disputes consistently representing 7 per cent of the ICSID caseload since 2010.[8] In fact, as will be known to many students and lawyers familiar with investment treaty arbitration, one of the leading cases for whether a particular transaction is an investment under the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID Convention) for the purposes of investment treaty protection, Salini v. Morocco, arose out of a construction project.[9]

Whether a contractor can bring an arbitration against a host state under an IIA often requires consideration of the following questions:

  • whether the contractor qualifies as an investor;
  • whether the contractor's project or the construction contract itself qualifies as an investment;
  • whether the contractor's claims arise out of the construction contract or are based on breaches of an IIA; and
  • whether the alleged breaches are by the state, an emanation of the state, or an entity whose conduct is attributable to the state.

This chapter does not attempt to provide a comprehensive answer to these questions, but offers a general overview of the main issues that may arise in investment claims involving construction projects, and how investment tribunals have approached them to date.

Is the contractor a qualifying ‘investor'?

In determining whether a contractor qualifies as an investor for the purposes of investment treaty protection, the tribunal must first assess the definition of ‘investor' under the relevant IIA. If a dispute under an IIA is brought to ICSID, the contractor must also meet the definition of investor under Article 25 of the ICSID Convention.

For natural persons, the definition of investor under IIAs will typically include individuals having the nationality of the host state.[10] Some BITs exclude from their protection natural persons who possess the nationality of both signatory states. For instance, the Romania-Canada BIT excludes, for Romania, natural persons who possess both Romanian citizenship and that of Canada.[11]

For legal persons to qualify as investors, they must be incorporated under the laws of the home state. Some IIAs may require that the juridical person have a genuine commercial activity in that state or have their main seat of business in a contracting state (other than the host state).[12] In some cases, entities constituted under the laws of the host state, but controlled directly or indirectly by nationals of the investor state, may also be deemed to qualify as investors under IIAs.[13] In the construction context, a foreign shareholder or investor may be able to obtain protection while a local partner may not.[14] Unincorporated joint ventures do not typically qualify as an investor under IIAs. That said, each IIA is different and careful analysis of the actual wording is important in order to assess the specific requirements for a contractor to qualify as an investor under a given IIA.

In the ICSID context, the investor must be a ‘National of another Contracting State' pursuant to Article 25 of the ICSID Convention. ICSID has jurisdiction only over disputes between a state and a national of another contracting state. Disputes between states or between private investors are excluded. However, tribunals have determined that the concept of ‘national' is not limited to privately owned companies and does not depend on whether the company is partially or even fully controlled by the state.[15] Rather, the relevant test, known as the ‘Broches Test', as formulated in 1972 by Aaron Broches, the first Secretary-General of ICSID, is whether an investor acted as an agent of the government, or discharged an essentially governmental function:

[I]n today's world the classical distinction between private and public investment, based on the source of the capital, is no longer meaningful, if not outdated. There are many companies which combine capital from private and governmental sources and corporations all of whose shares are owned by the government, but who are practically indistinguishable from the completely privately owned enterprise both in their legal characteristics and in their activities. It would seem, therefore, that for purposes of the Convention a mixed economy company or government-owned corporation should not be disqualified as a ‘national of another Contracting State' unless it is acting as an agent for the government or is discharging an essentially governmental function.[16]

The ICSID Convention does not define the concept of nationality for natural persons under Article 25(2)(a), however it denies jurisdiction to individuals who also hold the nationality of the host state on either the date of consent to ICSID arbitration or the date of the registration of the request for arbitration.[17] For legal persons, ‘national of another contracting state' means:

any juridical person which had the nationality of a Contracting State other than the State party to the dispute on the date on which the parties consent to submit such dispute to conciliation or arbitration and any juridical person which had the nationality of the Contracting State party to the dispute on that date and which, because of foreign control, the parties have agreed should be treated as a national of another Contracting State for the purposes of this Convention.[18]

Professor Schreuer has asserted that:

The overwhelming weight of the authority … points towards the traditional criteria of incorporation or seat for the determination of corporate nationality under Art. 25(2)(b). The situation may be otherwise if the parties have entered into an agreement on the investor's nationality.[19]

Has the contractor made an ‘investment' in the host state?

Most IIAs adopt a wide definition of ‘investment', such as ‘every kind of asset'[20] or ‘any kind of asset and any direct or indirect contribution in cash, kind or in services, invested or reinvested in any sector of economic activity', with a non-exhaustive indicative list of specific types of investments.[21] Even those few treaties with a closed list of defined investments are so comprehensive as to capture nearly every conceivable investment covered under the open-list approach. The starting (and likely the only) point, therefore, is to look to the definition of ‘investment' under the relevant IIA.

Where a dispute is brought under the ICSID Convention, however, an additional question may arise as to whether Article 25(1) of the ICSID Convention sets any further threshold for investments. The term investment is undefined in the ICSID Convention. The position taken by a number of ICSID tribunals is that if a transaction qualifies as an investment under the instrument providing consent to ICSID arbitration (such as an IIA), it must also be deemed to qualify as an investment under the ICSID Convention.[22] Therefore, according to those tribunals, the jurisdiction ratione materiae of an ICSID tribunal is a matter to be determined with reference to the terms of the relevant IIA.

Indeed, the Annulment Committee in MHS v. Malaysia held that the failure of an arbitrator to consider, let alone apply, the definition of investment as it is contained in the IIA is a gross error giving rise to a manifest failure to exercise jurisdiction:

Some 1700 of those treaties are in force, and the multilateral treaties, particularly the Energy Charter Treaty, which are in force, of themselves endow ICSID with an important jurisdictional reach. It is those bilateral and multilateral treaties which today are the engine of ICSID's effective jurisdiction. To ignore or depreciate the importance of the jurisdiction they bestow upon ICSID, and rather to embroider upon questionable interpretations of the term ‘investment' as found in Article 25(1) of the Convention, risks crippling the institution.[23]

As the tribunal in Garanti Koza v. Turkmenistan recently held:

The Tribunal therefore concludes that the Claimant's burden of showing that its investment that is the subject of this arbitration falls within the meaning of ‘investment' as used in the ICSID Convention as well as in the BIT is satisfied by the Tribunal's conclusion that the Claimant's investment comes within the definition of ‘investment' in the BIT and that nothing about that definition or the Claimant's investment itself exceeds what is permissible under the ICSID Convention or is incompatible with its purpose.[24]

Nevertheless, some ICSID tribunals have considered that an investment needs to meet certain objective criteria under the ICSID Convention as well, although these are not necessarily to be applied in a strict fashion.[25] The ICSID tribunal in Salini v. Morocco, a case arising out of a project for the construction of a highway in Morocco, identified the following elements for an activity to qualify as an investment under the ICSID Convention:

  • substantial commitment or contribution;
  • participation in the risks of the transaction;
  • reasonable duration of performance;
  • regularity of profit and return; and, only in some cases
  • contribution to the economic development of the host state.[26]

The above criteria have been commonly referred to as the Salini criteria. Tribunals typically have considered the Salini criteria to be general characteristics rather than jurisdictional requirements.[27]

In his doctrinal work, Professor Douglas endorses only part of the Salini criteria in defining an investment in modified form; namely:

  • commitment of resources to the economy of the host state;
  • assumption of risk; and
  • expectation of a commercial return.[28]

To the extent that the more controversial fifth Salini criterion listed above is deemed to have relevance, investments related to the ‘tasks to be carried out by the State or by other public authorities' or that ‘serve the public interest' have been considered to satisfy the criterion of contribution to the development of the host state - a broad scope that should capture most construction and infrastructure projects.[29]

In the context of a construction contract, the qualifying investment may consist of the rights acquired under the contract, together with all plant, equipment and materials imported by the contractor in connection with the construction works as well as any bank guarantees provided for the purposes of the works.

In the past, there were concerns that investment treaty protection was not available for classic works contracts for the construction of buildings.[30] However, recent cases have demonstrated that, for more complex structures, and with the advent of PPPs to promote efficient procurement for foreign sector investment, in practice, most international construction contracts are likely to meet the definition of an investment. Various construction works have been found by tribunals to be qualifying investments, such as:

  • the development and construction of a real estate project;[31]
  • the development of a touristic resort;[32]
  • the development of a golf club and condominiums;[33]
  • the dredging of a canal;[34]
  • the construction and operation of a transfer station for hazardous waste;[35]
  • the construction of hydro-electric power facilities;[36]
  • the construction of a gas pipeline;[37]
  • improvement works at an oil refinery;[38]
  • the construction of a dam;[39]
  • the construction of roads and motorways;[40]
  • the construction and operation of an international airport;[41] and
  • the construction of bridges.[42]

Do the contractor's claims arise under the IIA or are they based on breaches of the construction contact?

Construction disputes almost inevitably involve an underlying contract that comes with a variety of rights and obligations. If the state is not a party to the construction contract, the state cannot be held responsible for any breaches of contract. Therefore, for a claim to be made against the state, a claim must be brought under an IIA for breach of one of its substantive protections. In some cases, as explained below, contractual breaches by the host state may be covered by an IIA as well. Facts giving rise to a contractual remedy may or may not give rise to a BIT remedy, as articulated in the annulment decision of Vivendi v. Argentina:

whether there has been a breach of the BIT and whether there has been a breach of contract are different questions. Each of these claims will be determined by reference to its own proper or applicable law - in the case of the BIT, by international law; in the case of the Concession Contract, by the proper law of the contract, in other words, the law of Tucumán.[43]

A treaty cause of action is not the same as a contractual cause of action; it requires a clear showing of conduct which is in the circumstances contrary to the relevant treaty standard.[44]

In Bayindir v. Pakistan,[45] a full-scale construction claim was brought under an investment treaty in circumstances that raised the question whether a treaty claim could provide an alternative forum for a contractor. The tribunal held that the fact that a state may be exercising a contractual remedy did not itself exclude the possibility of a treaty breach (parallel claims).

In conclusion, the Tribunal considers that when the investor has a right under both the contract and the treaty, it has a self-standing right to pursue the remedy accorded by the treaty. The very fact that the amount claimed under the treaty is the same as the amount that could be claimed (or was claimed) under the contract does not affect such self-standing right.[46]

Purely contractual disputes, such as claims for delay or wrongful calling of a bond, are unlikely to constitute a breach of an IIA without more. For a breach of an IIA, state conduct is required - the state or its emanation must go beyond what an ordinary contracting partner would do and exercise sovereign authority.[47] As the ICSID tribunal concluded in Impregilo v. Pakistan:

In order that the alleged breach of contract may constitute a violation of the BIT, it must be the result of behaviour going beyond that which an ordinary contracting party could adopt. Only the state in the exercise of its sovereign authority (‘puissance publique'), and not as a contracting party, may breach the obligations assumed under the BIT.[48]

IIAs typically provide five main substantive protections relevant to construction and infrastructure disputes:

  • no expropriation without compensation;
  • fair and equitable treatment;
  • full protection and security;
  • non-discrimination; and
  • the observation of obligations (‘umbrella clauses').

These are briefly explained below.

Expropriation

IIAs provide protection from direct or indirect expropriation or measures tantamount to expropriation, such as the revocation of title deeds, operating licences, or in some cases by terminating or cancelling licences or agreements.[49]

It is now generally accepted that contractual rights, as with any other investment, are assets that may be expropriated.[50] Construction contracts are no different.[51] Expropriation of the acquired rights embodied in a contract typically occurs when a state takes a sovereign action (or a series of actions) that impedes performance of or effectively terminates the contract in question.[52] The state's resort to elements of puissance publique in carrying out the expropriatory act is the critical feature in the context of expropriation of contractual rights. The analysis is whether the acts may be characterised as merely regulatory or contract-related, or denote instead an unreasonable, unjust or disproportionate use of sovereign powers, or an open resort to the sovereign prerogative to repudiate contracts, which indicate the existence of an expropriation under international law.

By way of example, in ADC v. Hungary,[53] the claimants entered into a contract with a Hungarian state agency, ATAA, to renovate, construct and operate two terminals of the Budapest-Ferihegy International Airport. Prior to completion of the airport construction, the Minister of Transport in Hungary issued a Decree and the Hungarian Parliament passed legislation ‘having the effect of causing the rights of the Project Company to disappear and/or become worthless'.[54] The ICSID tribunal in that case found that an unlawful expropriation had occurred since ‘[a]n act of state brought about the end of this investment and, particularly, absent compensation, the BIT has been breached'.[55] The tribunal also rejected the state's public interest argument, finding that the subsequent privatisation of the airport and resulting profit netted by Hungary rendered this position unsustainable: ‘In the opinion of the Tribunal, this is the clearest possible case of expropriation.'[56]

In some cases, the contractual rights that are expropriated may extend beyond the underlying contract rights to rights in an arbitral award. In Saipem SpA v. People's Republic of Bangladesh, which involved the construction of a gas pipeline in Bangladesh, Petroblanga, a state-owned company, filed an action in court seeking the revocation of the authority of an International Criminal Court (ICC) tribunal based on allegations of tribunal misconduct.[57] The Supreme Court of Bangladesh issued a decision revoking the authority of the ICC tribunal and denied an application to set aside the ICC tribunal's award on the grounds that the award was non-existent. An ICSID tribunal determined that ‘Saipem's residual contractual rights under the investment as crystallised in the ICC Award' was a property right capable of being expropriated.[58] The tribunal found that Bangladesh had breached the Italy-Bangladesh BIT by unlawfully expropriating the claimant's contractual right to ICC arbitration through the Bangladesh courts' interference.[59]

Fair and equitable treatment

Fair and equitable treatment seeks to: protect from a denial of justice (procedural fairness and transparency),[60] provide freedom from coercion or harassment and protect legitimate expectations in a stable and predictable economic environment.[61] Where the host state introduces surprise or unfair changes in legislation affecting an investment or contract (e.g., by revoking tax exemptions or import charges or introducing surprise taxes),[62] a contractor may seek redress under an IIA.

For example, in Garanti Koza v. Turkmenistan, an ICSID tribunal found that Turkmenistan was liable to an investor in a highway project for the wrongful rejection of invoices submitted by the claimant for non-compliance with an unusual local methodology. According to the tribunal in that case, this amounted to a breach of the fair and equitable standard under the applicable UK-Turkmenistan BIT.[63] In Desert Line v. Yemen, which is one of the first investment treaty cases where the claimant has obtained an award for moral damages,[64] the state sought to annul a valid arbitral award and coerced Desert Line into an unfavourable settlement agreement through such methods as arrest, detention, death threats, and heavy artillery. Yemen was found to have breached the fair and equitable treatment standard under the Oman-Yemen BIT.[65]

In Metalclad v. Mexico,[66] a US corporation, operating through its Mexican subsidiary, was notified that it was unlawfully operating without a municipal construction permit to develop and operate a hazardous waste disposal enterprise. Metalclad's application for a permit was denied and the landfill was subsequently declared a protected natural area by Ecological Degree. An ICSID tribunal found that Mexico violated the fair and equitable treatment protection by denying the permit and by lacking transparency as to the approval procedure for municipal construction permits.[67] The Ecological Decree alone also constituted an act of indirect expropriation, as it had the effect of ‘barring forever the operation of the landfill'.[68]

Full protection and security

Where an investment is affected by civil unrest or armed conflict (including instances of physical taking over or destruction of the investment), the host state may be liable for damages through the actions or inaction of the host state. The obligation to accord full protection and security ‘creates a special regime of liability for the acts of the state and for third parties that compromise the physical security of the assets of the investor'.[69]

International tribunals have generally found that the obligation to accord full and complete protection and security includes exercising due diligence and taking reasonable measures to protect the foreign investment.[70] The scope of the full protection and security standard has, however, evolved beyond its traditional conception of protecting investors from physical invasion or harassment and also extends to providing legal protection.[71]

In Pantechniki v. Republic of Albania,[72] the claimant asserted that the state had failed to provide full protection and security to the road worksite as a result of severe civil disturbances in 1997. The tribunal rejected this argument, finding that the state had been unable to intervene, as opposed to having refused to intervene.[73] The tribunal adopted the view that, ‘[a]lthough a host state is required to exercise an objective minimum standard of due diligence, the standard of due diligence is that of the host state in the circumstances and with the resources of the state in question'.[74] Similarly in LESI v. Algeria, the tribunal found that full protection and security, in the midst of Algeria's civil unrest in the mid-1990s, did not constitute an impossible guarantee of constant and complete security, but simply an obligation to provide reasonable and proportionate security no less favourable than that provided to nationals.[75]

On the other hand, in Wena Hotels v. Egypt, the tribunal found that Egypt had violated the full protection and security standard enunciated in the Egypt-UK BIT by failing to prevent the seizure of the investor's investment by one of the state entities and also because Egypt had failed to restore the investment promptly to the investor.[76]

Non-discrimination

IIAs also typically provide protection against interference with the performance of the contract by unfair or discriminatory governmental action, providing the foreign investor with the right to a level playing field. This often involves two prongs:

  • ‘national treatment', the right to receive the same treatment as domestic investors; and
  • ‘most favoured nation' treatment, the right to receive the same treatment as foreign investors from other states, notwithstanding that the host state may have agreed more favourable protections with other host states.[77]

Umbrella clauses

Also referred to as ‘elevator' or ‘mirror effect' clauses, umbrella clauses are a commitment by the host state to comply with obligations it has entered into with regard to investments. Umbrella clauses initially emerged in the context of early oil and gas concessions as a means of creating a parallel cause of action under international law for breach of contract.[78] In the context of the construction industry, contractors contracting directly with the state or its emanations may wish to consider relying on such clauses.

It has been said that around 40 per cent of BITs contain some form of an umbrella clause.[79] Such clauses remain controversial, however, as to the nature and scope of international protection they afford, with two competing views taken by arbitral tribunals:  umbrella clauses elevate contractual breaches into treaty breaches; or umbrella clauses do not elevate purely contractual breaches.[80]

Under the first school of thought, umbrella clauses cannot elevate contractual breaches into treaty breaches by transforming responsibility incurred towards a private investor under a contract into international responsibility. This was the view taken, for example, in SGS v. Pakistan.[81] SGS, a Swiss corporation, commenced an ICSID arbitration alleging that Pakistan had breached its obligations under the Pakistan-Switzerland BIT, after Pakistan had initiated a domestic arbitration pursuant to the arbitration clause of the agreement. The tribunal considered whether the existence of the following umbrella clause could transform purely contractual claims into BIT claims:

Either Contracting Party shall constantly guarantee the observance of the commitments it has entered into with respect to the investments of the investors of the other Contracting Party.[82]

With respect to the treaty claims, the tribunal held that the umbrella clause did not have the effect of elevating ‘its claims grounded solely in a contract with another contracting party.'[83] Furthermore, the tribunal put forth a floodgates argument that, the scope of the term ‘commitments' in the clause would be ‘susceptible to almost indefinite expansion':

Considering the widely accepted principle with which we started, namely, that under general international law, a violation of a contract entered into by a State with an investor of another State, is not, by itself, a violation of international law, and considering further that the legal consequences that the Claimant would have us attribute to Article 11 of the BIT are so far-reaching in scope, and so automatic and unqualified and sweeping in their operation, so burdensome in their potential impact upon a Contracting Party, we believe that clear and convincing evidence must be adduced by the Claimant.[84]

The tribunal did not preclude the possibility that states may agree in a BIT that all breaches of each state's contracts with investors of the other state may henceforth be converted into and be treated as breaches of the BIT. However, the claimant in that case failed to submit evidence of the ‘necessary level of specificity and explicitness of text'.[85]

Adopting the opposing view, the tribunal in SGS v. Philippines, which involved the same claimant, found that a specific contractual obligation under a BIT could be pursued in breach of an applicable exclusive jurisdiction clause:

Article X(2) makes it a breach of the BIT for the host State to fail to observe binding commitments, including contractual commitments, which it has assumed with regard to specific investments. But it does not convert the issue of the extent or content of such obligations into an issue of international law. That issue … is still governed by the investment agreement. … On the other hand, if some other court or tribunal has exclusive jurisdiction over the Agreement, the position may be different.[86]

The tribunal thus interpreted ‘any obligation' under the umbrella clause to apply to obligations arising under national law, such as those arising from a contract. The tribunal rejected the argument that a broad interpretation ‘would involve a full-scale internationalisation of domestic contracts - in effect, that it would convert investment contracts into treaties by way of what the [SGS v. Pakistan] tribunal termed ‘instant transubstantiation'.'[87] However, the tribunal ultimately found that, while it had jurisdiction over the contract claim, the claimant had to comply with the contractual jurisdiction clause.[88]

Some commentators have proposed an integrationist view whereby the umbrella clause is an extra mechanism for the enforcement of claims, but they are governed by their applicable law (and do not convert a contractual claim into a treaty claim): ‘The purpose of the umbrella clause is to allow enforcement without internationalisation and without transforming the character and content of the underlying obligation.'[89]

The interpretation of umbrella clauses to elevate contractual claims to treaty breaches remains unsettled, and as there is no stare decisis in international arbitration, it is difficult to predict how individual tribunals will approach such questions.[90]

Is the breach committed by the host state, an emanation of the state or an entity whose conduct is attributable to the state?

To bring a claim under an IIA, the wrongful conduct must be by the host state, or attributable to it under international law. Investment treaty claims do not cover commercial disputes between private parties. In the ICSID context, Article 25 of the ICSID Convention provides that the jurisdiction of ICSID only covers disputes between a contracting state and a national of another contracting state.

The International Law Commission's Articles on Responsibility of States for Internationally Wrongful Acts may provide guidance on attribution under international law, prompting a tribunal to consider:[91]

  • Is the entity who committed the wrongful act a State organ?[92]
  • If not, does it exercise governmental functions, and was the conduct in question governmental rather than private or commercial activity?
  • If not, was it acting under the control or direction of the State?

Where the contractor contracted directly with the host state or an emanation or organ of the state, the host state can be responsible for breaches of the contract, which also amount to breaches of the IIA. For example, in Bayindir v. Pakistan,[93] which concerned the construction of a motorway, the ICSID tribunal upheld jurisdiction over the dispute, finding that the alleged breaches of the applicable BIT between Turkey and Pakistan were a direct consequence of a decision of an administrative body, the National Highway Authority, to terminate the contract. However, the decision received express clearance from the Pakistani government and could not have been taken without government guidance - thereby establishing attribution to the state pursuant to Article 8 of the ILC Articles.[94]

For state-owned enterprises, where an action is effectively controlled by the state or the state has significant involvement in the commission of the act, attribution may also be found.[95] In the Suez Canal dredging project case of Jan de Nul NV v. Egypt, the tribunal articulated a two-tier test for the ‘effective control' requirement under Article 8:

International jurisprudence is very demanding in order to attribute the act of a person or entity to a State, as it requires both a general control of the State over the person or entity and a specific control of the State over the act the attribution of which is at stake; this is known as the ‘effective control' test.[96]

Similarly, the tribunal in Toto v. Lebanon determined that acts of the Executive Council of Major Projects (CPEG), and its successor, the Council for Development and Reconstruction, were attributable to Lebanon.[97] The tribunal found that Toto had contracted with entities exercising governmental authority, although they were organs of the state and each had distinct legal personality and administrative and financial autonomy.[98]

In brief, the CPEG, with projects funded by the State budget, and in charge of implementing the decisions of the Council of Ministers, exercised Lebanese governmental authority when it entered into the Contract with Toto. As also confirmed by Article 5 of the ILC Draft Articles, its conduct has to be considered as an act of the Lebanese state.[99]

Where the employer is an autonomous corporate body legally distinct from the state, the tribunal will most likely not find attribution of responsibility for a contractual breach by the employer. In Impregilo v. Pakistan, where the claimant concluded contracts with the Pakistan Water and Power Development Authority (WAPDA), and not with the state of Pakistan, the tribunal found that the WAPDA was ‘properly characterised as an autonomous corporate body, legally and financially distinct from Pakistan'.[100] In contrast, in Salini v. Morocco, the tribunal found that a Moroccan company, ADM, in which the state held at least 89 per cent of the shareholdings and whose board of directors included the Minister of Infrastructure and other officials, was effectively state-controlled.[101] In addition to the structure of ADM, the tribunal also looked to the functional role of the company - ‘ADM's main activity is the construction, maintenance and operation of the highways and communication routes of a large dimension, granted by the State'.[102]

In circumstances where the state itself is generally unlikely to be a direct counter-party to a construction contract, questions of attribution of conduct are likely to continue playing a significant role in investment claim involving the construction industry.

Conclusion

ICSID's regional statistics on the percentage of all cases registered under the ICSID Convention and Additional Facility Rules demonstrate a continuing rise in investment arbitration in the construction sector:

  • from 2014-2016, construction disputes represented 1 per cent of all ICSID cases involving an EU state party;[103]
  • from 2014-2016, construction disputes represented 8-10 per cent of all ICSID cases involving a state party from the South and East Asia and the Pacific region;[104] and
  • in 2015, construction disputes represented 9 per cent of all ICSID cases involving a state party from Africa.[105]

Investment treaties increase the reassurance of foreign contractors and provide protection when entering a market of political upheaval and economic turbulence, as has been observed in the surge of ICSID claims against Egypt and Libya following the Arab Spring uprisings.[106] With the recent fall in commodities prices globally, and growing political unrest, contractors would be well advised to consider whether they may benefit from the additional protection of an IIA.

Notes

[1]    Erin Miller Rankin and Sami Tannous are partners and Matei Purice is a senior associate at Freshfields Bruckhaus Deringer LLP. The authors would like to thank Ms Patricia Snell for her kind contribution and overall assistance in preparing and finalising this chapter.

[2]    See Hochtief Aktiengesellschaft v. The Argentine Republic (ICSID Case No. ARB/07/31) Decision on Liability, 29 December 2014, Paragraphs 67-68 and 100-101. Two further cases that arose from the same construction project: Impregilo SpA v. The Argentine Republic (II)(ICSID Case No. ARB/08/14) (settled); Impregilo SpA v. The Argentine Republic (ICSID Case No. ARB/15/39) (pending).

[3]    See UNCTAD Investment Policy Hub, accessed on 13 April 2017.

[4]    There are currently more than 2900 BITs concluded.

[5]    See, for example, the Energy Charter Treaty (the ECT), the Agreement on Promotion, Protection and Guarantee of Investments among Member States of the Organization of the Islamic Conference (the OIC Agreement) or the Unified Agreement for the Investment of Arab Capital in the Arab States (the Arab Investment Agreement).

[6]    UNCTAD Investment Policy Hub, accessed on 13 April 2017.

[7]    As of 14 April 2017, there were 16 pending ICSID cases in the construction sector and 30 concluded, settled, or discontinued cases. The discrepancy in the number of cases reported by ICSID and UNCTAD is perhaps due to the inclusion of UNCITRAL cases by UNCTAD and the lack of a convention for what qualifies as a dispute in the construction sector.

[8]    ICSID Caseload Statistics (Issue 2017-1) as of 31 December 2016; ICSID Caseload Statistics (Issue 2016-1) as of 31 December 2015; ICSID Caseload Statistics (Issue 2015-1) as of 31 December 2014; ICSID Caseload Statistics (Issue 2014-1) as of 31 December 2013; ICSID Caseload Statistics (Issue 2013-1) as of 31 December 2012; ICSID Caseload Statistics (Issue 2012-1) as of 31 December 2011; ICSID Caseload Statistics (Issue 2011-1) as of 31 December 2010; ICSID Caseload Statistics (Issue 2010-1) as of 31 December 2009.

[9]    See Salini Costruttori SpA and Italstrade SpA v. Kingdom of Morocco (ICSID Case No. ARB/00/4) Decision on Jurisdiction, 23 July 2001.

[10]   C. McLachlan, L. Shore and M. Weiniger, International Investment Arbitration: Substantive Principles, First Edition (2007), pp 140-141; M. Purice, ‘Natural persons as claimants under the ICSID Convention' in C Baltag, ICSID Convention after 50 Years: Unsettled Issues, First Edition (2017), Section 4.02.

[11]   Romania-Canada BIT (2009), Article I(h)(i).

[12]   C. McLachlan, L. Shore, and M. Weiniger, International Investment Arbitration: Substantive Principles, First Edition (2007), p. 142; See, for example, Switzerland-Kuwait BIT (2000), Article 1(3)(b).

[13]   See, for example, Netherlands-Kuwait BIT (2002), Article 1(2)(d).

[14]   See Tulip Real Estate and Development Netherlands (BV) v. Republic of Turkey (ICSID Case No. ARB/11/28) Award, 10 March 2014 (a Dutch investor entered into a joint venture with three local Turkish partners).

[15]   Ceskoslovenska Obchodni Banka, AS v. The Slokav Republic (ICSID Case No. ARB/97/4) Decision of the Tribunal on Objections to Jurisdiction, 24 May 1999, Paragraphs 16-17; Rumeli Telekom AS and Telsim Mobil Telekomunikasyon Hizmetleri AS v. Republic of Kazakhstan (ICSID Case No. ARB/05/16) Award, 29 July 2008, Paragraph 197; C. Schreuer, L. Maintoppi, A. Reinisch and A. Sinclair, The ICSID Convention: A Commentary, Second Edition (2009), p. 161.

[16]   See C. Schreuer, L. Maintoppi, A. Reinisch and A. Sinclair, The ICSID Convention: A Commentary, Second Edition (2009), p. 160.

[17]   ICSID Convention, Article 25(2)(a).

[18]   ICSID Convention, Article 25(2)(b).

[19]   C. Schreuer, ‘Commentary on the ICSID Convention: Article 25' (1997) ICSID Rev-FILJ 59, cited in C. McLachlan, L. Shore and M. Weiniger, International Investment Arbitration: Substantive Principles, First Edition (2007), p. 144.

[20]   See Agreement between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the Lebanese Republic for the Promotion and Reciprocal Protection of Investments, 16 February 1999, Article 1(2); See also Agreement between the People's Republic of China and Bosnia and Herzegovina on the Promotion and Protection of Investments, 1 January 2005, Article 1(1).

[21]   See Agreement between the Belgo-Luxembourg Economic Union, on the One Hand, and the Government of the Republic of Belarus, on the Other Hand, on the Reciprocal Promotion and protection of Investments, 9 April 2002, Article 1(2); See also Accord entre le Gouvernement de la République Française et le Gouvernement du Royaume d'Arabie saoudite sur l'encouragement et la protection réciproques des investissements, Article 1(1) ‘all assets of every nature, such as goods, rights, and interests held or controlled by an investor' [tous les avoirs de toute nature, tels que les biens, droits et revenus, détenus ou contrôlés par un investisseur].

[22]   See, for example, Philippe Gruslin v. Malaysia, (ICSID Case No. ARB/99/3) Award, 27 November 2000, Paragraph 13.6; SGS Société Générale de Surveillance SA v. Islamic Republic of Pakistan (ICSID Case No. ARB/01/13) Decision of the Tribunal on Objections to Jurisdiction, 6 August 2003, Paragraph 133; Malaysian Historical Salvors, SDN, BHD v. The Government of Malaysia (ICSID Case No. ARB/05/10) Decision on the Application for Annulment, 16 April 2009, Paragraphs 73-74 and 78; Poštová Banka, AS and Istrokapital SE v. The Hellenic Republic (ICSID Case No. ARB/13/8), Award, 9 April 2015, Paragraph 357; SGS Société Générale de Surveillance SA v. Paraguay (ICSID Case No. ARB/07/29) Decision on Jurisdiction, 12 February 2010, Paragraph 93.

[23]   Malaysian Historical Salvors, SDN, BHD v. The Government of Malaysia (ICSID Case No. ARB/05/10) Decision on the Application for Annulment, 16 April 2009, Paragraph 73; See Philippe Gruslin v. Malaysia (ICSID Case No. ARB/99/3) Award, 27 November 2000, Paragraph 13.6; See also I. Fadlallah, ‘La notion d'investissements; vers une restriction à la compétence du CIRDI?', Global Reflections on International Law (2005, ICC), cited in J. Ho, ‘The Meaning of ‘Investment' in ICSID Arbitrations' (2010) 26 Arb Int 633, p. 639. Ibrahim Fadlallah, one of the arbitrators on the Salini tribunal, stated that the quest for an objective definition of ‘investment' is ‘hasardeuse et, probablement, contraire à l'esprit de la Convention' [hazardous and, probably, contrary to the spirit of the Convention].

[24]   Garanti Koza LLP v. Turkmenistan (ICSID Case No. ARB/11/20) Award, 19 December 2016, Paragraph 242.

[25]   Biwater Gauff (Tanzania) v. United Republic of Tanzania (ICSID Case No. ARB/05/22) Award, 24 July 2008, Paragraph 312: ‘In the Tribunal's view, there is no basis for a rote, or overly strict, application of the five Salini criteria in every case.'

[26]   Salini Costruttori SpA and Italstrade SpA v. Kingdom of Morocco (ICSID Case No. ARB/00/4), Decision on Jurisdiction, 23 July 2001, Paragraph 52.

[27]   See Malaysian Historical Salvors, SDN, BHD v. The Government of Malaysia (ICSID Case No. ARB/05/10) Decision on the Application for Annulment, 16 April 2009, Paragraphs 79-80; See also Biwater Gauff (Tanzania) Limited v. United Republic of Tanzania (ICSID Case No. ARB/05/22) Award, 24 July 2008, Paragraphs 310, 312-318; See R. Castro de Figueiredo, ‘The Notion of Investment and Economic Development under the ICSID Convention' in C Baltag, ICSID Convention After 50 Years: Unsettled Issues, First Edition (2017), p. 96, citing C. Schreuer, The ICSID Convention: A Commentary, First Edition (2001), p. 140: the Salini criteria ‘should not necessarily be understood as jurisdictional requirements but merely as typical characteristics of investments under the Convention'.

[28]   Z. Douglas, The International Law of Investment Claims, First Edition (2009), p. 191.

[29]   Joy Mining Machinery Limited v. The Arabic Republic of Egypt (ICSID Case No. ARB/03/11) Award on Jurisdiction, 6 August 2004, Paragraphs 58-63; Patrick Mitchell v. Democratic Republic of Congo (ICSID Case No. ARB/99/7) Decision on the Application for the Annulment of the Award, 1 November 2006, Paragraphs 27-31.

[30]   Société Ouest Africaine des Bétons Industriels v. Senegal (ICSID Case No. ARB/82/1) Decision on Jurisdiction, 1 August 1984, Paragraphs 47-58; Award, 25 February 1988, Paragraphs 4.01-4.17.

[31]   MTD Equity Sdn Bhd and MTD Chile SA v. Republic of Chile, (ICSID Case No. ARB/01/7) Award, 25 May 2004.

[32]   Mohamed Abdulmohsen Al-Kharafi & Sons Co v. Libya and others, Final Arbitral Award, 22 March 2013.

[33]   Ansung Housing Co, Ltd v. People's Republic of China (ICSID Case No. ARB/14/25).

[34]   Jan de Nul NV and Dredging International NV v. Arab Republic of Egypt (ICSID Case No. ARB/04/13) Award, 6 November 2008.

[35]   Metalclad Corporation v. The United Mexican States (ICSID Case No. ARB(AF)/97/1) Award, 30 August 2000.

[36]   Impregilo SpA v. Islamic Republic of Pakistan (ICSID Case No. ARB/03/3).

[37]   Saipem SpA v. People's Republic of Bangladesh (ICSID Case No. ARB/05/7).

[38]   Samsung Engineering Co, Ltd v. Sultanate of Oman (ICSID Case No. ARB/15/30).

[39]   Salini Costruttori SpA and Italstrade SpA v. Hashemite Kingdom of Jordan (ICSID Case No. ARB/02/13); ATA Construction v. Hashemite Kingdom of Jordan (ICSID Case No. ARB/08/2).

[40]   Salini Costruttori SpA and Italstrade SpA v. Kingdom of Morocco (ICSID Case No. ARB/00/4), Decision on Jurisdiction, 23 July 2001; Toto Costruzioni Generali SpA v. The Republic of Lebanon (ICSID Case No. ARB/07/12); Bayindir Insaat Turizm Ticaret VE Sanayi AS v. Islamic Republic of Pakistan (ICSID Case No. ARB/03/29) Decision on Jurisdiction, 14 November 2005; Desert Line Projects LLC v. The Republic of Yemen (ICSID Case No. ARB/05/17) Award, 6 February 2008; Consortium RFCC v. Kingdom of Morocco (ICSID Case No. ARB/00/6); Pantechniki v. the Republic of Albania (ICSID Case No. ARB/07/21).

[41]   Malicorp v. Arab Republic of Egypt (ICSID Case No. ARB/08/18) Award, 7 February 2011, Paragraph 114 (where the concession could have generated significant returns despite the contractor not yet having made significant contributions).

[42]   Garanti Koza LLP v. Turkmenistan (ICSID Case No. ARB/11/20) Award, 19 December 2016, Paragraphs 232-233.

[43]   Vivendi v. The Argentine Republic (ICSID Case No. ARB/97/3) Decision on Annulment, 3 July 2002, Paragraph 96.

[44]   Vivendi v. The Argentine Republic (ICSID Case No. ARB/97/3) Decision on Annulment, 3 July 2002, Paragraph 113.

[45]   Bayindir Insaat Turizm Ticaret Ve Sanayi AS v. Islamic Republic of Pakistan (ICSID Case No. ARB/03/29) Decision on Jurisdiction, 14 November 2005.

[46]   Bayindir Insaat Turizm Ticaret Ve Sanayi AS v. Islamic Republic of Pakistan (ICSID Case No. ARB/03/29) Decision on Jurisdiction, 14 November 2005, Paragraph 167.

[47]   Toto Costruzioni Generali SPA v. Republic of Lebanon (ICSID Case No. ARB/07/12) Award, 7 June 2012, Paragraph 161.

[48]   Impregilo SpA v. Pakistan (ICSID Case No. ARB/03/3) Decision on Jurisdiction, 22 April 2005, Paragraph 260; See Consortium RFCC v. Morocco (ICSID Case No. ARB/00/6) Decision on Jurisdiction, 16 July 2001, Paragraphs 39-40.

[49]   See Alpha Projektholding GmbH v. Ukraine (ICSID Case No. ARB/07/16) Award, 8 November 2010, Paragraphs 408-412 (indirect expropriation through the transferring of the claimant's assets to a company owned by the state without compensation); Sistem Mühendislik Ins¸aat Sanayi ve Ticaret AS¸ v. Kyrgyz Republic (ICSID Case No. ARB(AF)/06/1) Award, 9 September 2009, Paragraphs 117-121 (abrogation of ownership rights in a hotel and expropriation pursuant to a local court order).

[50]   See, for example, Azurix Corp v. The Argentine Republic (ICSID Case No. ARB/01/12) Award, 14 July 2006, Paragraph 314; Siemens AG v. The Argentine Republic (ICSID Case No. ARB/02/8) Award, 6 February 2007, Paragraph 267.

[51]   Bayindir Insaat Turizm Ticaret Ve Sanayi AS v. Islamic Republic of Pakistan (ICSID Case No. ARB/03/29) Decision on Jurisdiction, 14 November 2005, Paragraph 255.

[52]   See, for example, Impregilo SpA v. Islamic Republic of Pakistan (ICSID Case No. ARB/03/3) Decision on Jurisdiction, 22 April 2005, Paragraphs 260-261; Bayindir Insaat Turizm Ticaret Ve Sanayi AS v. Islamic Republic of Pakistan (ICSID Case No. ARB/03/29) Award, 27 August 2009, Paragraph 180; Parkerings-Compagniet AS v. Republic of Lithuania (ICSID Case No. ARB/05/8) Award, 11 September 2007, Paragraphs 443-445.

[53]   ADC Affiliate Limited and ADC & ADC Management Limited v. The Republic of Hungary (ICSID Case No. ARB/03/16) Award, 2 October 2006.

[54]   ADC Affiliate Limited and ADC & ADC Management Limited v. The Republic of Hungary (ICSID Case No. ARB/03/16) Award, 2 October 2006, Paragraph 304.

[55]   ADC Affiliate Limited and ADC & ADC Management Limited v. The Republic of Hungary (ICSID Case No. ARB/03/16) Award, 2 October 2006, Paragraph 304.

[56]   ADC Affiliate Limited and ADC & ADC Management Limited v. The Republic of Hungary (ICSID Case No. ARB/03/16) Award, 2 October 2006, Paragraph 304.

[57]   Saipem SpA v. The People's Republic of Bangladesh (ICSID Case No. ARB/05/07) Award, 30 June 2009.

[58]   Saipem SpA v. The People's Republic of Bangladesh (ICSID Case No. ARB/05/07) Award, 30 June 2009, Paragraph 128.

[59]   Saipem SpA v. The People's Republic of Bangladesh (ICSID Case No. ARB/05/07) Award, 30 June 2009, Paragraphs 159-161.

[60]   See ATA Construction, Industrial and Trading Company v. The Hashemite Kingdom of Jordan (ICSID Case No. ARB/08/2) Award, 18 May 2010; Railroad Development Corporation v. Republic of Guatemala (ICSID Case No. ARB/07/23) Award, 29 June 2012.

[61]   Walter Bau AG (In Liquidation) v. The Kingdom of Thailand (UNCITRAL) Award, 1 July 2009, Paragraph 12.3 (legitimate expectations that the Thai authorities would approve toll hikes as contemplated in the concession contract).

[62]   MTD Equity Sdn Bhd and MTD Chile SA v. Chile (ICSID Case No. ARB/01/7) Award, 25 May 2004.

[63]   Garanti Koza LLP v. Turkmenistan (ICSID Case No. ARB/11/20) Award, 19 December 2016, Paragraphs 383-384.

[64]   Desert Line v. Yemen (ICSID Case No. ARB/05/17) Final Award, 16 February 2008, Paragraphs 289-291. The tribunal found that a party may request moral damages in ‘exceptional circumstances' and determined that the state's coercive treatment of the claimant's executives was ‘malicious' and therefore constitutive of fault-based liability.

[65]   Desert Line v. Yemen (ICSID Case No. ARB/05/17) Final Award, 16 February 2008, Paragraphs 190-195.

[66]   Metalclad Corporation v. The United Mexican States (ICSID Case No. ARB(AF)/97/1) Award, 30 August 2000.

[67]   Metalclad Corporation v. The United Mexican States (ICSID Case No. ARB(AF)/97/1) Award, 30 August 2000, Paragraphs 97-101.

[68]   Metalclad Corporation v. The United Mexican States (ICSID Case No. ARB(AF)/97/1) Award, 30 August 2000, Paragraph 109.

[69]   Z. Douglas, The Foundations of International Investment Law: Bringing Theory Into Practice, First Edition (2014), p. 379.

[70]   See, for example, Wena Hotels Limited v. Arab Republic of Egypt (ICSID Case No. ARB/98/4) Award, 8 December 2000, Paragraph 84.

[71]   See, for example, Azurix Corp v. The Argentine Republic (ICSID Case No. ARB/01/12) Award, 14 July 2006, Paragraph 406; Siemens v. Argentina (ICSID Case No. ARB/02/8) Award, 6 February 2007, Paragraph 303; Compañiá de Aguas del Aconquija SA and Vivendi Universal SA v. The Argentine Republic (ICSID Case No. ARB/97/3) Award, 20 August 2007, Paragraph 7.4.15; AES Summit Generation Limited and AES-Tisza Erömü Kft v. Republic of Hungary (ICSID Case No. ARB/07/22) Award, 23 September 2010, Paragraph 13.3.2.

[72]   Pantechniki SA Contractors & Engineers v. Republic of Albania (ICSID Case No. ARB/07/12) Award, 30 July 2009.

[73]   Pantechniki SA Contractors & Engineers v. Republic of Albania (ICSID Case No. ARB/07/12) Award, 30 July 2009, Paragraph 82.

[74]   Pantechniki SA Contractors & Engineers v. Republic of Albania (ICSID Case No. ARB/07/12) Award, 30 July 2009, Paragraphs 81-82, citing Newcombe and Paradell, Law and Practice of Investment Treaties 310 (2009). The tribunal, at Paragraphs 79-80, also cited favourably DP O'Connell, International Law (1970) Volume II, p. 968.

[75]   LESI, SpA and Astaldi, SpA v. People's Democratic Republic of Algeria (ICSID Case No. ARB/05/3) Award, 12 November 2008, Paragraphs 175-181.

[76]   Wena Hotels Limited v. Arab Republic of Egypt (ICSID Case No. ARB/98/4) Award, 8 December 2000, Paragraph 84.

[77]   See MTD Equity Sdn Bhd and MTD Chile SA v. Republic of Chile (ICSID Case No. ARB/01/7) Award, 25 May 2004 (the Malaysian investor relied on the more specific provisions of the Croatian and Danish BITs with Chile).

[78]   A. Sinclair, ‘The Origins of the Umbrella Clause in the International Law of Investment Protection' (2004) 20 Arb Int 411, pp. 415-416.

[79]   J. Crawford, ‘Treaty and Contract in Investment Arbitration' (2008) 24 Arb Int 351, p. 367.

[80]   Z. Douglas, The Foundations of International Investment Law: Bringing Theory Into Practice, First Edition (2014), p. 387.

[81]   SGS Société Générale de Surveillance SA v. Islamic Republic of Pakistan (ICSID Case No. ARB/01/13) Decision of the Tribunal on Objections to Jurisdiction, 6 August 2003.

[82]   SGS Société Générale de Surveillance SA v. Islamic Republic of Pakistan (ICSID Case No. ARB/01/13) Decision of the Tribunal on Objections to Jurisdiction, 6 August 2003, Paragraph 163, citing Article 11 of the Pakistan-Switzerland BIT. Note that the clause was ‘curiously worded and might have given grounds for a narrower construction'. See J. Crawford, ‘Treaty and Contract in Investment Arbitration' (2008) 24 Arb Int 351, p. 367.

[83]   SGS Société Générale de Surveillance SA v. Islamic Republic of Pakistan (ICSID Case No. ARB/01/13) Decision of the Tribunal on Objections to Jurisdiction, 6 August 2003, Paragraph 165.

[84]   SGS Société Générale de Surveillance SA v. Islamic Republic of Pakistan (ICSID Case No. ARB/01/13) Decision of the Tribunal on Objections to Jurisdiction, 6 August 2003, Paragraphs 166 and 167.

[85]   SGS Société Générale de Surveillance SA v. Islamic Republic of Pakistan (ICSID Case No. ARB/01/13) Decision of the Tribunal on Objections to Jurisdiction, 6 August 2003, Paragraph 173.

[86]   Société Générale de Surveillance SA v. Republic of the Philippines (ICSID Case No. ARB/02/6) Decision on Jurisdiction, 29 January 2004, Paragraphs 113-128.

[87]   Société Générale de Surveillance SA v. Republic of the Philippines (ICSID Case No. ARB/02/6) Decision on Jurisdiction, 29 January 2004, Paragraph 126.

[88]   J. Uff, ‘Availability of Treaty Arbitration in Construction' (2010) International Construction Law Review 403, p. 410.

[89]   J. Crawford, ‘Treaty and Contract in Investment Arbitration' (2008) 24 Arb Int 351, p. 370; See CMS Gas Transmission Company v. The Argentine Republic (ICSID Case No. ARB/01/8) Decision of the ad hoc Committee on the Application for Annulment of the Argentine Republic, 25 September 2007, Paragraph 95(d). The tribunal's decision on this issue was annulled for failure to state reasons.

[90]   For a more recent example in the construction sector, see Garanti Koza LLP v. Turkmenistan (ICSID Case No. ARB/11/20) Award, 19 December 2016.

[91]   J. Crawford, ‘Treaty and Contract in Investment Arbitration' (2008) 24 Arb Int 351, p. 355. Crawford argues that the ILC Articles were designed to attribute wrongful acts only. Cf A Badia, ‘Attribution of Conducts of State-Owned Enterprises Based on Control by the State' in C. Baltag, ICSID Convention after 50 Years: Unsettled Issues, First Edition (2017), p. 205.

[92]   See R. Dolzer and C. Schreuer, Principles of International Investment Law, Second Edition (2012), pp. 216-217.

[93]   Bayindir v. Pakistan (ICSID Case No. ARB/03/29) Award, 27 August 2009, Paragraph 125.

[94]   Bayindir v. Pakistan (ICSID Case No. ARB/03/29) Award, 27 August 2009, Paragraph 124.

[95]   Article 8, ILC Draft Articles on Responsibility of States for Internationally Wrongful Acts (2001); See A. Badia, ‘Attribution of Conducts of State-Owned Enterprises Based on Control by the State' in C. Baltag, ICSID Convention after 50 Years: Unsettled Issues, First Edition (2017), pp. 190-192; See also pre-ILC Articles case of Wena Hotels Ltd v. Arab Republic of Egypt (ICSID Case No. ARB/98/4) Award, 8 December 2000, Paragraphs 67-69.

[96]   Jan de Nul NV and Dredging International NV v. Arab Republic of Egypt (ICSID Case No. ARB/04/13) Award, 24 October 2008, Paragraph 173.

[97]   Toto Costruzioni Generali SpA v. The Republic of Lebanon (ICSID Case No. ARB/07/12) Decision on Jurisdiction, 11 September 2009.

[98]   Toto Costruzioni Generali SpA v. The Republic of Lebanon (ICSID Case No. ARB/07/12) Decision on Jurisdiction, 11 September 2009, Paragraphs 51-60.

[99]   Toto Costruzioni Generali SpA v. The Republic of Lebanon (ICSID Case No. ARB/07/12) Decision on Jurisdiction, 11 September 2009, Paragraph 53.

[100]  Impregilo SpA v. Islamic Republic of Pakistan (ICSID Case No. ARB/03/3) Decision on Jurisdiction, 22 April 2005, Paragraph 209.

[101]  Salini Costruttori SpA v. Kingdom of Morocco (ICSID Case No. ARB/00/4) Decision on Jurisdiction, 23 July 2001, Paragraphs 31-32; See also Impregilo SpA v. Islamic Republic of Pakistan (ICSID Case No. ARB/03/3) Decision on Jurisdiction, 22 April 2005, Paragraphs 212-214.

[102]  Salini Costruttori SpA v. Kingdom of Morocco (ICSID Case No. ARB/00/4) Decision on Jurisdiction, 23 July 2001, Paragraph 33.

[103]  ICSID Caseload Statistics, Special Focus - European Union (April 2016); ICSID Caseload Statistics, Special Focus - European Union (April 2015); ICSID Caseload Statistics, Special Focus - European Union (March 2014).

[104]  ICSID Caseload Statistics, Special Focus - South & East Asia & The Pacific (October 2016); ICSID Caseload Statistics, Special Focus - South & East Asia & The Pacific (October 2015); ICSID Caseload Statistics, Special Focus - South & East Asia & The Pacific (October 2014).

[105]  ICSID Caseload Statistics, Special Focus - Africa (April 2016). As of 30 April 2016, ICSID had registered 563 cases, with 131 of these cases (23 per cent) involving an African State Party.

[106]  See, for instance, Strabag SE v. Libya (ICSID Case No. ARB(AF)/15/1); Hussain Sajwani, Damac Park Avenue for Real Estate Development SAE and Damac Gamsha Bay for Development SAE v. Arab Republic of Egypt (ICSID Case No. ARB/11/16); Yosef Maiman, Merhav (MNF), Merhav-Ampal Group, Merhav-Ampal Energy Holdings v. Arab Republic of Egypt (UNCITRAL 2012).

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