II. SPECIAL CLAUSES RELATING TO THE
SUBJECT-MATTER OF THE DISPUTE

A. Stipulation that Transaction Constitutes an Investment

While the Convention requires that the dispute arise "directly out of an investment," it deliberately does not define the latter term. The Report of the World Bank Executive Directors on the Convention explains that such definition was not attempted "given the essential requirement of consent by the parties."7 Parties thus have much, though not unlimited, discretion to determine whether their transaction constitutes an investment.8 The fact that the parties consent to submit a dispute to the Centre of course implies that they consider it to arise out of an investment. If the parties wish to strengthen the presumption, they may include an explicit statement to this effect in the consent agreement.

Clause 3

It is hereby stipulated that the transaction to which this agreement relates is an investment.

B. Limitation of Subject-Matter of Disputes Submitted to the Centre

The Convention does not require that the parties to an investment arrangement must agree to submit to the Centre all the disputes that might arise out of the transaction. They may decide to submit only particular types of questions, or to submit all with certain exceptions, as illustrated by the following clause.

Clause 4

The consent to the jurisdiction of the Centre recorded in citation of basic clause above shall [only]/[not] extend to disputes related to the following matters:...


7 - Report of the World Bank Executive Directors on the Convention, supra note 1, at para. 27.
8 - For brief descriptions of the different kinds of transaction involved in actual cases submitted to the Centre, see ICSID Cases, Doc. ICSID/16/Rev. 5 (Nov. 30, 1996).



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