The meaning of 'investor' and 'investment' in investment treaty arbitration
Produced in partnership with Joe Tirado, Partner of Garrigues UK LLP and Elisa Vicente, Senior Associate of J&A Garrigues, S.A.
The meaning of 'investor' and 'investment' in investment treaty arbitration

The following Arbitration guidance note Produced in partnership with Joe Tirado, Partner of Garrigues UK LLP and Elisa Vicente, Senior Associate of J&A Garrigues, S.A. provides comprehensive and up to date legal information covering:

  • The meaning of 'investor' and 'investment' in investment treaty arbitration
  • The meaning of investor
  • The meaning of investment

The major gateway issue for any claim brought under a bilateral investment treaty (BIT), multilateral investment treaty (MIT) or foreign investment law will be whether the investor actually qualifies as an 'investor' and whether that investor’s interests in the host state qualify as an 'investment'.

If a potential claimant is not a qualifying investor holding a qualifying investment under the relevant treaty or law, then the substantive protections will not apply and there will be no legitimate jurisdictional scope for pursuing an investor-state arbitration.

The definitions of 'investor' and 'investment' will vary between BITs, but some overall themes emerge and certain components of the definitions are common to many BITs.

This Practice Note sets out an overview of those themes and typical issues that arise in relation to the definitions of 'investor' and 'investment'.

The meaning of investor

An investor will typically mean an individual citizen of the investor’s home state or a company incorporated in the investor’s home state. However, in the modern world of global citizens and multinational corporations, this issue can be complex.

Investor—key elements

An investor can be a natural person or some form of legal entity (most often a corporation).

If an investor is a natural person, typically that individual will need to prove citizenship of the investor’s home state in accordance with the home state’s laws on nationality. The