Issue link: http://resourceworld.uberflip.com/i/107613
normally must occur "upstream," before a dispute arises. If the investor has active operations in more than one country with which the host country has a BIT, the investor should consider structuring ownership of the investment to take advantage of the most favourable BIT. What will constitute "the most favourable BIT" is fact-dependant. The definition of "investment" within the potentially applicable BITs may present an issue – if the intended investment does not qualify as an "investment" under the treaty, the investor cannot rely upon its protections. Canada's model FIPA defines investment more narrowly than some BITs by specifically excluding certain claims to money and "any other claims to money". By contrast, many other BITs, including some of Canada's older FIPAs, define investment to include "every kind of asset" and "claims to money or any other claim under contract having an economic value." The choice of arbitral forum must also be considered. Even if the BIT defines the investment as a protected investment, the ICSID Convention imposes an additional requirement that the dispute arise out of an investment "within the meaning of the Convention". The ICSID jurisprudence has generally required the following elements for there to be an "investment": a contribution; a certain duration over which the project is implemented; a sharing of operational risks; and, a contribution to the host country's development. If the intended investment would not meet these criteria, it may be preferable to structure the investment to take advantage of a BIT that provides the option to pursue arbitration under the UNCITRAL rules. The scope of investment obligations agreed to by the host country is another consideration. For example, some BITs include taxation measures within the scope of the obligations, while others specifically exclude taxation. The carve out for taxation measures in the Canada-Ecuador FIPA created difficulties for Canadian oil company EnCana Corporation in its claim for arbitration arising out of Ecuador's 36 www.resourceworld.com february 2013