Raymond Charles Eyre and Montrose Developments (Private) Limited v. Democratic Socialist Republic of Sri Lanka
ICSID · Investment (ICSID and treaty) · Sri Lanka · 5 Mar 2020
Why it matters
This case clarifies the threshold for qualifying as a protected investment under the ICSID Convention and BITs, particularly for land acquisitions and planned projects. The Tribunal emphasized that mere ownership of land or aspirational development plans without substantive commitments and financial costs do not constitute an investment. It also addressed the distinction between pre-investment activities and actual investments, reinforcing the Salini test's relevance.
Summary
The case involved a British national, Mr. Raymond Charles Eyre, and his Sri Lankan company, Montrose Developments (Private) Limited, who claimed that Sri Lanka expropriated a plot of land (Montrose Land) intended for a hotel project. The Claimants alleged that Sri Lanka's dredging and compulsory acquisition of the land without adequate compensation violated the UK-Sri Lanka BIT. Sri Lanka raised preliminary jurisdictional objections, arguing that the Claimants' alleged investment did not meet the definition of 'investment' under the BIT and ICSID Convention. The Tribunal bifurcated the proceedings to address jurisdiction first. After analyzing the facts, the Tribunal found that Mr. Eyre's contributions to the land and hotel project were pre-investment activities, he had not made substantive commitments or incurred significant financial costs. The hotel project remained aspirational, and the land acquisition was not accompanied by the necessary operational risk. Therefore, the Tribunal lacked jurisdiction ratione materiae. The Tribunal also dismissed other objections, including those related to shareholder claims, as moot. The Claimants were ordered to pay a portion of Sri Lanka's legal costs.
The detail
Parties: Raymond Charles Eyre and Montrose Developments (Private) Limited v. Democratic Socialist Republic of Sri Lanka
Case number: ICSID Case No. ARB/16/25
Outcome: The Tribunal dismissed all claims for lack of jurisdiction ratione materiae, finding that the Claimants' alleged investment in land and a hotel project did not qualify as a protected investment under the UK-Sri Lanka BIT and ICSID Convention. The Claimants were ordered to pay one-third of the Respondent's legal costs.
Applicable law: UK-Sri Lanka BIT, ICSID Convention, Sri Lankan law
Issues in play: The definition of 'investment' under Article 1 of the BIT and Article 25(1) of the ICSID Convention was central. The Tribunal applied the Salini criteria (contribution, risk, duration) and found that the Claimants' contributions were pre-investment and lacked operational risk.
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