The definition of investment and the ICSID convention: matters arising under the Nigerian investment promotion act and international investment law

Abstract

This article contends that the omission to define investment in the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (the ICSID Convention) has a trickledown effect on the Nigerian Investment Promotion Act (the NIPC Act), in the context of investment treaty law and arbitration. Its greatest impact is the relegation of the contribution to economic development element of the definition of “investment” to a backseat contrary to the purpose of the ICSID Convention. This article proposes a simple thesis: the omission to define investment in the ICSID Convention has fostered an amorphous definition of investment under the NIPC Act, thus creating uncertainty, irrelevance and ambiguity. The uncertainty is a potential problem in the conduct of foreign direct investment under the ICSID Convention. The article recommends a review of the definition of “investment” under the Act and the adoption of a definition that restricts foreign investment within the territory of Nigeria and makes acontribution to economic development its core element in line with the fundamental objective of the ICSID Convention.

Keywords: Nigerian Investment Promotion Act, Law and Development, Investment Law and ICSID Arbitration