Environmental Engineering Reference
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Other tribunals claimed that there is always a need to assess risk. 503 ICSID
tribunals basically assume that investment risks are shared between the parties. 504
However, no-one has ever defined risk. In all cases (including the Salini decision),
tribunals merely mentioned that the risk prerequisite exists and assessed the respec-
tive investment. Concerning construction contracts, one tribunal mentioned that the
longer the construction contract takes, the more the criterion of risk is met. 505
Another ICSID tribunal said that providing retention money is an obvious risk in
cases of long-term contracts. 506 One ICSID tribunal pointed out that there is a risk if
the investor must keep a certain standard of the investment (project) over a certain
amount of time according to the contract. 507 Two tribunals pointed out that the
existence of a dispute already illustrates the existence of risk for an investor. 508
Others also claim that risk is a factor of jurisdiction, but not a legal requirement of
investment. 509 An investment of 2.5 million US dollar was without a doubt
accepted as a risk for the investor. 510 There is also a risk, if the host state intervenes,
e.g. because of bankruptcy. 511
Similar to ICSID tribunals, the literature does not define risk. Nevertheless, they
try to offer a “kind of” catalog of what risk encompasses or might mean. Risk must
go beyond mere commercial risks and
) entail some uncertainty as to the return
to be achieved, and the ultimate outcome of the transaction.
(
...
'
512 As some authors
'
point out,
(
...
) the more the remuneration depends on the operating result, the
'
513 Risk also includes the risk of contractual
non-performance. 514 Some authors mention that the Salini tribunal defined risk in
a very broad and permissive way, which means that it includes day-to-day risks. 515
Also the fact that the tribunal does not link risk to remuneration illustrates that the
tribunal favors a liberal approach over the classical understanding of risk. 516
Consequently, the literature does not see a problem to meet to criterion “risk”
within the Salini test, because investments (partially) based on own funds almost
imply risk for the investor. 517
higher
the investor
s
risk.
'
'
503 ICSID [2010] ARB/07/20—Award, 35-36 para 110; ICSID [2010] ARB/08/20, 28-29 para 80.
504 ICSID [2007] ARB/05/10—Award, 38-39 para 112.
505 ICSID [2009] ARB/07/12, 25-26 para 78; Grubenmann ( 2010 ), 117.
506 ICSID [2007] ARB/05/07, 30-31 para 109.
507 ICSID [2006] ARB/05/19, 23-24 para 77.
508
ICSID [2012] ARB/09/2—Award, 61 para 301; ICSID [1997] ARB/96/3, 1378 (1386) para 40.
509
ICSID [2006] ARB/03/16—Award, 59-60 para 317 and 61 para 325.
510
ICSID [2012] ARB/09/2—Award, 61 para 302.
511
ICSID [2013] ARB/08/9—Decision on Jurisdiction and Admissibility, 163 para 485.
512 Peterson ( 2009b ); cf Grubenmann ( 2010 ), 117.
513 Loncle ( 2006 ), 319 (329).
514 Peterson ( 2009b ).
515 Yala ( 2005 ), 105 (112).
516 Yala ( 2005 ), 105 (113).
517 Dolzer and Schreuer ( 2008 ), 68; Johannsen ( 2009 ), 5 (17); Grubenmann ( 2010 ), 118.
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