Alps Finance and Trade AG v. The Slovak Republic
UNCITRAL · Investment (ICSID and treaty) · Switzerland · 5 Mar 2011
Why it matters
This case is notable for its application of the Salini test to determine whether a contractual right constitutes an 'investment' under a BIT. The tribunal's strict interpretation of the investment definition and its rejection of jurisdiction based on the lack of contribution, duration, and risk has been cited in subsequent investment treaty cases.
Summary
Alps Finance and Trade AG, a Swiss company, initiated arbitration against the Slovak Republic under the UNCITRAL Rules, claiming that the Slovak Republic had breached the Switzerland-Slovakia Bilateral Investment Treaty (BIT). The claimant alleged that it had made an investment in Slovakia by providing loans and services to a Slovak company. The respondent challenged the tribunal's jurisdiction, arguing that the claimant's activities did not constitute an 'investment' under the BIT. The tribunal applied the Salini test, which requires an investment to involve a contribution, a certain duration, and an element of risk. It found that the claimant's loans were short-term and lacked the typical characteristics of an investment, such as a lasting commitment and risk. The tribunal also noted that the claimant had not made any capital contribution to the Slovak company. Consequently, the tribunal declined jurisdiction, holding that the dispute did not fall within the scope of the BIT. The award is significant for its strict application of the Salini criteria and its impact on the interpretation of investment definitions in BITs.
The detail
Parties: Alps Finance and Trade AG v. The Slovak Republic
Case number: UNCITRAL
Outcome: The tribunal dismissed the claim for lack of jurisdiction.
Applicable law: UNCITRAL Arbitration Rules; Switzerland-Slovakia Bilateral Investment Treaty
Issues in play: The case involved the interpretation of the definition of 'investment' under the BIT and whether the claimant's activities qualified as an investment protected by the treaty.
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