Claimant’s business activity does not satisfy objective economic criteria for of an investment

2)Article 1 of the ACT defines investment as every kind of asset including business enterprise and movable property. ACT also specifies investment as “assets” which “are invested”.

The Claimant’s operations and bark Hans do not fall within the definition of investment under Art.1 of the ACT. These operations constitute a mere commercial activity. Members of the Tribunal, as it might be seen from the doctrine^[1] and arbitral decisions,^[2] agree commercial contracts and stand-alone commercial operations and operations are traditionally given as examples of commercial,do not qualify as an not investment activity. Even the MHS Annulment committee and Pr.Mortenson^[3], the famous proponents of the broadest meaning of investment under the ICSID Convention, acknowledge that the term “investment” does not encompass sale and like transient commercial transactions, to distinguish such transactions from investments. The hallmarks that distinguish commercial transactions from investments include a mere transfer of titlesexchange of goods or services for payment under a short-term agreement and common usual or standard terms. For instance, in Globex case (paras 54-56), Tribunal found that purchase and sale contracts are commercial transactions and that even more complex contract (which contained other elements in addition) do not transfer such transactions to investment the commissioning of the mining equipment was recognized as a commercial transaction in Joy Mining v. Egypt[SU2] . Turning to qualification as services, indeed, in some cases, services were qualified as investment but only when BIT defined service as investment. (see paras. 53-57 annulment Patrick Mitchel v. DR Congo.)[SU3]

You need to deal with Bark Hans: something to the effect that certain property may be brought within a state temporarily to perform the commercial transaction, but this does not change the nature of the property or the transaction

In our the present case, Captain Dahlbrerg concluded entered into a single navigational and commerce treatytransportation contract for the delivery cargo from the US to Europe. For these this reasons, Claimant’s commercial operations are not protected under the Atlantic Charter Treaty, and this dispute is not within the Tribunal’s jurisdiction

[Finally, the claimant’s purported investmentassets fails to satisfy requirements of an objective test for an investmentdo not have the characteristics of an investment:

First, Captain Dahlberg did not committed any capital. As[SU4] it was stated in para.93 of the Phoenix case: A transaction undertaken “without any significant economic activity, does not satisfy the basic pre-requisite of any investment worth of being protected by international treaties”.

In our the present case case, the Claimant merely performed trade and delivery functions rather than it encouraged some economic activity in the US. Hence, it is difficult to ascertain how the Claimant would have satisfied that requirement by expending resources on its commercial operation. The bark Hans, in turn, is not a substantial contribution to the economy of the USA, what is necessary requirement. (LESI-DIPENTA v. Algeria, Award, 10 January 2005, para. 14(i)) Patrick Mitchel v, Congo)

Secondly, in order to qualify as investment the asset’s owner must be exposed to an investment risk, which means that the investor cannot be sure of a return on his investment, and may not know the amount he will end up spending, even if all relevant counterparties discharge their contractual obligations (Romak v. Uzbekistan, para.230).

In this case, the Claimant faced only ordinary commercial risk of failure to timely deliver the cargo or otherwise perform under a contract.

Finally, requirement of certain duration of the operation should be met for qualification as investmentClaimant’s ‘investment’ did not have the required duration. Generally, arbitral decisions[4] and doctrine support period provide of for a two to five years period of investment as sufficient. In present case, it the delivery of cargo to the US was a Claimant singlewas the only relevant operation, which took place over the course only period of 4 month., which This is not enough for to qualification qualify as an investment.

Thus, the Claimant did not face investment-level risk, did not commit substantial capital to the USA economy, extended over a long period of time for a required period of time and therefore, his ship and operations do not qualify asn investments under the Atlantic Carter Treaty.]

Date: 2016-01-14; view: 834