1 See, e.g., J. Brunnée, ‘Consent’, in Max Planck Encyclopedia of Public International Law (2010): ‘a review of the main international law-making processes reveals that the consent of individual States often plays only an indirect role in creating the rules that bind them, and sometimes none at all’; M. Lister, ‘The Legitimating Role of Consent in Internation al Law’, (2011) 11 Chicago JIL forthcoming: ‘state consent has an important, though limited, role in establishing the legitimacy of some parts of international law.’

2 See, e.g., A. N. Pronto, ‘Some Thoughts on the Making of International Law’, (2008) 19 EJIL 601, at 613, explaining the International Law Commission's reticence to encourage negotiation of a treaty based on its draft articles on the Responsibility of States for internationally wrongful acts as ‘amount[ing] to a sort of post-modernist take on the codification of international law, which minimized the importance of treaties while preferring the development of the law through the continuing development of customary international law’.

3 A. Bianchi, ‘Human Rights and the Magic of Jus Cogens’, (2008) 19 EJIL 491, at 491, noting that ‘[t]here is an almost intrinsic relationship between peremptory norms and human rights’.

4 This is still fundamentally true, even though it is now recognized that international organizations can also enter into treaties. See the Vienna Convention on the Law of Treaties between States and International Organizations or between International Organizations.

5 Brunnée, supra note 1, at para. 5: ‘States must consent to be legally bound by a treaty.’

6 See generally D. Hollis, ‘Why State Consent Still Matters: Non-State Actors, Treaties, and the Changing Sources of International Law’, (2005) 2 Berkeley JIL 1.

7 See, e.g., the 1226 treaty in which Emperor Frederick II of the Holy Roman Empire secured concessions for the citizens of Marseille that had previously only been available to the citizens of Pisa and Genoa. S. K. Hornbeck, ‘The Most-Favored-Nation Clause’, (1909) 3 AJIL 395, at 398.

8 See, e.g., F. G. Jacobs, ‘Varieties of Approach to Treaty Interpretation: With Special Reference to the Draft Convention on the Law of Treaties before the Vienna Diplomatic Conference’, (1969) 18 ICLQ 318, at 319: ‘The teleological approach seeks to interpret the treaty in the light of its objects and purposes.’ This approach has, for example, famously been adopted by the European Court of Justice. H. G. Schermers and D. F. Waelbroeck, Judicial Protection in the European Union (2001), para. 40: ‘In several cases the Court had to . . . choose the interpretation which best serves the purpose for which the provision was made.’

9 Ibid.

10 See, e.g., U. Linderfalk, On the Interpretation of Treaties (2007), 7: ‘Articles 31–33 of the Vienna Convention on the Law of Treaties should therefore be seen as evidence . . . of the rules that apply according to customary international law.’ But see J. Klabbers, ‘Virtuous Interpretation’, in M. Fitzmaurice, O. Elias, and P. Merkouris (eds.), Treaty Interpretation and the Vienna Convention on the Law of Treaties (2010), 17, at 30: ‘The conclusion thus presents itself that no rule on interpretation could likely be of customary law nature; interpretation rules simply are of a different quality than ordinary norms of behaviour.’

11 C. Schreuer, ‘Investment Disputes’, in Max Planck Encyclopedia of Public International Law (2010), at para. 33: ‘Art. 25 (1) ICSID Convention requires the existence of a dispute arising directly out of an investment as a jurisdictional requirement but does not offer a definition of the term investment’ (emphasis in original).

12 See, e.g., Malaysian Historical Salvors, SDN, BHD v. Malaysia, ICSID Case No. ARB/05/10, Decision on Jurisdiction, 17 May 2007, declining jurisdiction on the ground that the alleged ‘investment’ did not contribute to the host state's development, as required by Art. 25(1) of the ICSID Convention; Malaysian Historical Salvors, SDN, BHD v. Malaysia, ICSID Case No. ARB/05/10, Decision on the Application for Annulment, 16 April 2009, annulling the original award on the ground that Art. 25(1) of the ICSID Convention does not require an investment to contribute to the host state's development.

13 H. L. A. Hart, The Concept of Law (1994), 96.

14 J. Austin, The Province of Jurisprudence Determined (ed. W. E. Rumble) (1995), 18: ‘A law, in the most general and comprehensive acceptation in which the term, in its literal meaning, is employed, may be said to be a rule laid down for the guidance of an intelligent being by an intelligent being having power over him.’

15 Hart, supra note 13, at 24.

16 Ibid., at 96: ‘[A]s recent theory such as Kelsen's has shown, many of the features which puzzle us in the institutions of contract or property are clarified by thinking of the operations of making a contract or transferring property as the exercise of limited legislative powers by individuals.’

17 Ibid., at 33, noting the possibility of interpreting contract law as an order enforced by the sanction of the contract being judged a nullity.

18 Ibid., at 34.

19 VCLT, Art. 31(1).

20 Malaysian Historical Salvors, SDN, BHD v. Malaysia, ICSID Case No. ARB/05/10, Decision on the Application for Annulment, 16 April, 2009, para. 57.

21 ‘Host state’ is used in this article to refer to the state into which a foreign investment is made.

22 Schreuer, supra note 11, at para. 15: ‘Action in the domestic courts of the host State is the traditional way in which investment claims are pursued, at least initially.’

23 ‘Home state’ is used in this article to refer to the state whose nationality a foreign investor possesses.

24 See generally C. F. Amerasinghe, Diplomatic Protection (2008).

25 J. Dugard, ‘Diplomatic Protection’, in Max Planck Encyclopedia of Public International Law (2010), at para. 2: ‘Today it is accepted that diplomatic protection may only be enforced by peaceful means, such as negotiation, arbitration, or judicial proceedings, and not by forcible means.’

26 Schreuer, supra note 11, at para. 3, noting that diplomatic protection ‘carries serious disadvantages for the protected investor’.

27 Ibid., at para. 13: ‘A State has the right to exercise diplomatic protection on behalf of a national. It is under no duty or obligation to do so.’

28 Case Concerning the Barcelona Traction, Light and Power Company, Limited (Belgium v. Spain), Judgment of 5 February 1970 at para. 78, quoted in R. D. Bishop, J. Crawford, and M. Reisman (eds.), Foreign Investment Disputes (2005), 768: ‘[A] State may exercise diplomatic protection by whatever means and to whatever extent it thinks fit, for it is its own right that the State is asserting. Should the national or legal person on whose behalf it is acting consider that their rights are not adequately protected, they have no remedy in international law.’

29 Schreuer, supra note 11, at para. 3: ‘Under international law the investor's State of nationality may refuse to pursue the claim or may abandon it at any stage.’

30 A. Newcombe and L. Paradell, Law and Practice of Investment Treaties (2009), section 1.1: ‘In the late nineteenth and early twentieth centuries, as the world economy became increasingly internationalized, the limits of the diplomatic protection model became apparent.’

31 Ibid., at section 1.14: ‘Disputes over the treatment of foreign investment increased and intensified after WWII as the process of decolonization resulted in colonial territories becoming states.’

32 The most authoritative overview of ICSID and the ICSID Convention is provided in C. Schreuer, The ICSID Convention: A Commentary (2009).

33 Indeed, if an arbitration is commenced at ICSID, the investor's home state is precluded from exercising diplomatic protection or bringing any sort of international claim. ICSID Convention, Art. 27.

34 See, e.g., Report of the Executive Directors on the Convention on the Settlement of Investment Disputes between States and Nationals of Other States, para. 25: ‘consent of the parties is an essential prerequisite for the jurisdiction of the Centre.’

35 The ICSID Caseload – Statistics 10 (2010), noting that a bilateral investment treaty has constituted the basis for ICSID jurisdiction in 62 per cent of all ICSID arbitrations.

36 See, e.g., Loewen Group, Inc. and Raymond L. Loewen v. United States, ICSID Case No. ARB(AF)/98/3, Award on Merits, 26 June 2003, para. 233, noting that, in investment arbitration, ‘claimants are permitted for convenience to enforce what are in origin the rights of Party states’. But see Z. Douglas, ‘The Hybrid Foundations of Investment Treaty Arbitration’, (2003) 74 BYIL 151, at 170, arguing that investment treaties grant investors rights of their own.

37 On the lack of home-state involvement in the investment arbitration process, see generally A. Roberts, ‘Power and Persuasion in Investment Treaty Interpretation: The Dual Role of States’, (2010) 104 AJIL 179.

38 A treaty may, of course, also grant the home and host states the right to resolve disputes over the interpretation of the treaty. However, the home state usually retains no power to intervene in any dispute resolution process between the host state and the investor.

39 See generally A. Rau, ‘Arbitral Jurisdiction and the Dimensions of Consent’, University of Texas School of Law, Law and Economics Research Paper, No. 103, 2008.

40 See, e.g., Southern Pacific Properties (Middle East) Ltd. v. Egypt, Decision on Jurisdiction, 27 November 1985: Egypt found to have consented to arbitrate with SPP as a result of a clause in its own foreign-investment law, with no additional consent to arbitrate specifically with SPP being necessary.

41 See, e.g., S. Greenberg, C. Kee, and J. R. Weeramantry, International Commercial Arbitration (2011), section 3.4.1: ‘Without an arbitration agreement there can be no arbitration’; N. Blackaby and C. Partasides, Redfern and Hunter on International Arbitration (2009), section 1.52: ‘[C]onsent is essential. Without it there can be no valid arbitration.’

42 Convention, Art. 25(1). The Convention also includes other jurisdictional constraints, but these will not be addressed here.

43 See, e.g., Malaysian Historical Salvors, SDN, BHD v. Malaysia, ICSID Case No. ARB/05/1, Decision on Jurisdiction, 17 May 2007, declining jurisdiction for lack of an investment under Art. 25; Patrick Mitchell v. The Democratic Republic of Congo, Case No. ARB/99/7, Decision on the Application for Annulment of the Award, 1 November 2006 (same).

44 See, e.g., J. D. Mortenson, ‘The Meaning of “Investment”: ICSID's Travaux and the Domain of International Investment Law’, (2010) 51 Harvard Journal of International Law 257; Hiscock, M. E., ‘The Emerging Legal Concept of Investment’, (2008) 27 Penn State International Law Review 765Google Scholar; M. Jezewski, ‘There Is No Freedom without Solidarity: Towards a New Definition of Investment in International Economic Law’, Society of International Economic Law, Working Paper No. 51/08, 2008; D. Krishan, ‘A Notion of Investment’, in T. Grierson (ed.), Investment Treaty Arbitration: A Debate and Discussion (2008); N. Rubins, ‘The Notion of “Investment” in International Investment Arbitration’, in N. Horn and S. Kröll (eds.), Arbitrating Foreign Investment Disputes (2004), 283.

45 Schreuer, supra note 11, para. 33.

46 See, e.g., Joy Mining Machinery Ltd v. Egypt, Award on Jurisdiction, ICSID Case No. ARB/03/11 (2004) (bank guarantees); Fedax NV. v. Venezuela, ICSID Case No. ARB/96/3, IIC 101 (1997), Decision on Jurisdiction (debt instruments).

47 See, e.g., Joy Mining v. Arab Republic of Egypt, ICSID Case No. ARB/03/11, Award on Jurisdiction, 6 August 2004; Salini Costruttori, S.p.A. v. Kingdom of Morocco, ICSID Case No. ARB/00/4, Decision on Jurisdiction, 23 July 2001; Fedax v. Republic of Venezuela, ICSID Case No. ARB/96/3, Decision of the Tribunal on Objections to Jurisdiction, 11 July 1997.

48 This was most famously and influentially done by Christoph Schreuer in his 2001 treatise. See C. Schreuer, The ICSID Convention: A Commentary (2001), para. 122.

49 O. K. Fauchald, ‘The Legal Reasoning of ICSID Tribunals: An Empirical Analysis’, (2008) 19 EJIL 301; C. Schreuer and M. Weiniger, ‘Conversations across Cases: Is There a Doctrine of Precedent in Investment Arbitration?’, 5 January 2007 (draft on file with author).

50 This name is used in reflection of the adoption of these criteria for an Art. 25(1) ‘investment’ in Salini v. Morocco, ICSID Case No. Arb/00/04, Decision on Jurisdiction, 23 July 2001, at paras. 52–57.

51 Schreuer, supra note 48, at para. 122.

52 Ibid.: ‘These features should not necessarily be understood as jurisdictional requirements but merely as typical characteristics of investments under the Convention.’ However, see Mortenson, supra note 44, at 272, arguing, questionably, that ‘[t]ribunals following Schreuer's lead, however, have been far more aggressive, converting his descriptive reflections into a prescriptive set of requirements’.

53 See. e.g., Biwater Gauff (Tanzania) Ltd v. Tanzania, ICSID Case No. ARB/05/22, Award, 24 July 2008, para. 317: ‘over the years, many tribunals have approached the issue of the meaning of “investment” by reference to the parties’ agreement, rather than imposing a strict autonomous definition.’

54 See, e.g., P. Reuter, Introduction to the Law of Treaties (1989), para. 142: ‘The primacy of the text, especially in international law, is the cardinal rule for any interpretation’; I. Sinclair, The Vienna Convention on the Law of Treaties (1984), 115: ‘The Commission accordingly came down in favour of the view that the starting point of interpretation is the elucidation of the meaning of the text, not an investigation ab initio into the intentions of the parties.’

55 See generally J. Klabbers, ‘International Legal Histories: The Declining Importance of Travaux Préparatoires in Treaty Interpretation’, (2003) 50 NILR 267.

56 VCLT, Art. 32.

57 Mortenson, supra note 44, at 260: ‘The term “investment” is a quintessentially “ambiguous” term justifying “[r]ecourse [to] . . . the preparatory work of the treaty and the circumstances of its conclusion”.’

58 See, e.g., Malaysian Historical Salvors, SDN, BHD v. Malaysia, ICSID Case No. ARB/05/10, Decision on the Application for Annulment (2009): ‘In any event, courts and tribunals interpreting treaties regularly review the travaux préparatoireswhenever they are brought to their attention; it is mythological to pretend that they do so only when they first conclude that the term requiring interpretation is ambiguous or obscure’; Biwater Gauff (Tanzania) Ltd v. Tanzania, ICSID Case No. ARB/05/22, Award, 24 July 2008: ‘On the contrary, it is clear from the travaux préparatoires of the Convention that several attempts to incorporate a definition of “investment” were made, but ultimately did not succeed.’

59 Report of the Executive Directors, para. 27.

60 Convention, Preamble: ‘Declaring that no Contracting State shall by the mere fact of its ratification, acceptance or approval of this Convention and without its consent be deemed to be under any obligation to submit any particular dispute to conciliation or arbitration’; C. F. Amerasinghe, ‘The International Center for Settlement of Investment Disputes and Development through the Multinational Corporation’, (1976) 9 Vand. JTL 793, at 800: ‘both parties to the dispute must have consented to have recourse to ICSID’; Szasz, P. C., ‘The Investment Disputes Convention – Opportunities and Pitfalls: How to Submit Disputes to ICSID’, (1970) 5 Journal of Law and Economic Development 23, at 26Google Scholar: ‘The most important jurisdictional requirement is that of consent, by both parties, to the submission of a dispute to the Centre.’

61 See, e.g., Mortenson, supra note 44, at 292, noting ‘the startling inaccuracy of the suggestion that there was no attempt to define “investment”’.

62 Schreuer, supra note 32, at 121–2.

63 In the words of Christoph Schreuer, supra note 32, at 121–2, ‘[t]he subsequent discussions showed a widely held opinion that a definition of the term “investment” was necessary’.

64 Mortenson, supra note 44, at 289–91.

65 See similarly J. M. Boddicker, ‘Whose Dictionary Controls? Recent Challenges to the Term “Investment” in ICSID Arbitration’, (2010) 25 AUILR 1031, at 1045: ‘BIT and FTA definitions may narrow but not expand the scope of jurisdiction granted by [Art. 25(1)]. Therefore, a BIT or an FTA alone cannot confer jurisdiction’ (footnotes omitted); Rubins, supra note 44, at 289: ‘In the end, however, a textual analysis of the Convention and Institution Rules reveals, and commentators now agree, that there is an objective boundary to the definition of investment for purposes of ICSID jurisdiction’ (footnotes omitted).

66 Convention, Art. 25(4): ‘Any Contracting State may, at the time of ratification, acceptance or approval of this Convention or at any time thereafter, notify the Centre of the class or classes of disputes which it would or would not consider submitting to the jurisdiction of the Centre. The Secretary-General shall forthwith transmit such notification to all Contracting States. Such notification shall not constitute the consent required by paragraph (1).’

67 Saudi Arabia has, for example, made precisely this notification. The current list of Art. 25(4) notifications is available at http://icsid.worldbank.org/ICSID/FrontServlet?requestType=ICSIDDocRH&actionVal=ContractingMeasures&reqFrom=Main.

68 Report of the Executive Directors, para. 31; PSEG Global, Inc., The North American Coal Corporation, and Konya Ingin Electrik Uretim ve Ticaret Limited Sirketi v. Turkey, ICSID Case No. ARB/02/5, Decision on Jurisdiction, 4 June 2004, at 135–47 (including a discussion of case law).

69 Convention, Art. 25(4): ‘The Secretary-General shall forthwith transmit such notification to all Contracting States.’

70 VCLT, Art. 19(c).

71 Indeed, the withdrawal only becomes operative for any other state party to the treaty when it receives notice of the withdrawal. VCLT, Art. 22(3)(a).

72 PSEG Global, Inc., The North American Coal Corporation, and Konya Ingin Electrik Uretim ve Ticaret Limited Sirketi v. Turkey, ICSID Case No. ARB/02/5, Decision on Jurisdiction, 4 June 2004, at 142, noting that ‘States making notifications will always wish to remain free to either follow or not follow the terms of the notification when expressing their consent’.

73 Mortenson, supra note 44, at 295. Mortenson proposes that Art. 25(4) notifications be understood as ‘prospective guides . . . for interpreting future agreements’. As argued above, however, such an interpretation is inconsistent with the fact that Art. 25(4) notifications are made by states as parties to the Convention, not as parties to future agreements.

74 Under the recently adopted Rule 37 of the ICSID Arbitration Rules, a state may now make a submission in an arbitration in which it is not a party, but only as an amicus, at the same level as any other amicus submission.

75 Convention, Art. 64: ‘Any dispute arising between Contracting States concerning the interpretation or application of this Convention which is not settled by negotiation shall be referred to the International Court of Justice by the application of any party to such dispute, unless the States concerned agree to another method of settlement.’

76 See, e.g., Vannieuwenhuyse, G., ‘Bringing a Dispute Concerning ICSID Cases and the ICSID Convention before the International Court of Justice’, (2009) 8 Law and Practice of International Courts and Tribunals 115CrossRefGoogle Scholar; Schreuer, supra note 48, at 1259–64.

77 See, e.g., North American Free Trade Agreement, Art. 1131(2).

78 Convention, Art. 64, referring to ‘the States concerned’.

79 Art. 64 relates to ‘[a]ny dispute arising between Contracting States concerning the

interpretation or application of this Convention’ (emphasis added).

80 This situation has not served as the basis of an ICSID dispute yet, but with the enormous number of BITs now in effect, it will plausibly arise in the future.

81 See, e.g., Mortenson, supra note 44, suggesting as a limit that the dispute must arise from a ‘plausibly economic activity or asset’; Malaysian Historical Salvors, SDN, BHD v. Malaysia, ICSID Case No. ARB/05/10, Decision on the Application for Annulment, 16 April 2009, acknowledging the ‘fundamental assumption that the term “investment” does not mean “sale”’.

82 Malaysian Historical Salvors, SDN, BHD v. Malaysia, ICSID Case No. ARB/05/10, Decision on the Application for Annulment, 16 April 2009: ‘[I]n the debate over the draft of that Report, Mr. Broches recalled that none of the suggested definitions for the word “investment” had proved acceptable. He suggested that while it might be difficult to define the term, an investment in fact was readily recognizable.’

83 Vargiu, P., ‘Beyond Hallmarks and Formal Requirements: A “Jurisprudence Constante” on the Notion of Investment in the ICSID Convention’, (2009) 10 Journal of World Investment and Trade 753, at 767CrossRefGoogle Scholar: ‘ICSID tribunals constituted after the Joy Miningdecision have usually provided their own interpretation of the notion of investment, comprised of a variable number of elements treated sometimes as mere hallmarks, sometimes as formal requirements.’

84 Convention, Art. 37(2)(b): ‘Where the parties do not agree upon the number of arbitrators and the method of their appointment, the Tribunal shall consist of three arbitrators, one arbitrator appointed by each party and the third, who shall be the president of the Tribunal, appointed by agreement of the parties.’

85 Convention, Art. 54: ‘Each Contracting State shall recognize an award rendered pursuant to this Convention as binding and enforce the pecuniary obligations imposed by that award within its territories as if it were a final judgment of a court in that State.’

86 While this expansive view of the power of parties to a dispute over Art. 25(1)'s definition of ‘investment’ has not been adopted by a tribunal, it can be seen in commentary. See, e.g., Mortenson, supra note 44, at 299: ‘There is a good case that the historical agreement was for the requirement [of an investment] to have noadministrable effect – that it is a nonjusticiable norm whose enforcement depends solely on the give and take among political entities’; Andreeva, Y., ‘The Tribunal in Malaysian Historical Salvors v. Malaysia Adopts a Restrictive Intepretation of the Term “Investment”’, (2008) 25 Journal of International Arbitration 503Google Scholar, at 506: ‘[G]iven that the term “investment” is not defined in the Convention and is instead set out in great detail in the BIT. Is it not the will of the states that submit themselves to ICSID jurisdiction that matters most? Is it not the way they choose to define covered investments that sets the boundaries for that jurisdiction?’

87 Cf., e.g., Krishan, supra note 44, proposing the adoption of the International Monetary Fund's definition of ‘investment’.

88 It should be emphasized that the relevant issue is consent to investor–state arbitration, not merely ICSID arbitration.

89 See generally M. Malik, Recent Developments in the Definition of Investment in International Investment Agreements, Second Annual Forum of Developing Country Investment Negotiators (2008) (on file with author).

90 The idea that treaty terms can have an evolutionary meaning has recently been endorsed by the ICJ, in Dispute Regarding Navigational and Related Rights (Costa Rica v. Nicaragua), Judgment of 13 July 2009, para. 66: ‘[W]here the parties have used generic terms in a treaty, the parties necessarily having been aware that the meaning of the terms was likely to evolve over time, and where the treaty has been entered into for a very long period or is “of continuing duration”, the parties must be presumed, as a general rule, to have intended those terms to have an evolving meaning.’

91 A finding of customary international law also requires a finding of opinio juris; however, this element is not relevant in the present context.