Chicago Journal of International Law


ICSID jurisdiction extends to matters of international investment, but the organization's charter never defines what actually qualifies as an investment. Arbitration panels struggled with the issue, and eventually settled on the long-standing Salini test, which defines an investment as having four elements: (1) a contribution of money or assets (2) a certain duration (3) an element of risk and (4) a contribution to the economic development of the host state. More recently, panels have begun questioning the merits of that test, particularly the validity of the fourth prong. But overturning the doctrine would have two negative consequences. It would expand ICSID jurisdiction beyond what is granted by the organizations founding documents, and it would introduce uncertainty into the realm of international investing, which could chill the flow of capital.