MIL5903
Assignment 1 2026
Unique number:
Due Date: 28 May 2026
BALANCED CLAUSES FOR A LESOTHO ZAMBIA BILATERAL INVESTMENT TREATY
Keywords
Bilateral investment treaty; foreign investment; Lesotho; Zambia; investor protection; host
state regulation; fair and equitable treatment; expropriation; dispute settlement; sustainable
development.
Abbreviations and acronyms
BIT: Bilateral Investment Treaty
FET: Fair and Equitable Treatment
ISDS: Investor State Dispute Settlement
MFN: Most Favoured Nation
Terms of use
SADC: Southern African Development Community By making use of this document you agree to:
Use this document as a guide for learning, comparison and reference purpose,
Terms of use
Not to duplicate, reproduce and/or misrepresent the contents of this document as your own work,
By making use of this document you agree to:
Use this document
Fully accept the consequences
solely as a guide forshould you plagiarise
learning, reference,or and
misuse this document.
comparison purposes,
Ensure originality of your own work, and fully accept the consequences should you plagiarise or misuse this document.
Comply with all relevant standards, guidelines, regulations, and legislation governing academic and written work.
Disclaimer
Great care has been taken in the preparation of this document; however, the contents are provided "as is" without any express or
implied representations or warranties. The author accepts no responsibility or liability for any actions taken based on the
information contained within this document. This document is intended solely for comparison, research, and reference purposes.
Reproduction, resale, or transmission of any part of this document, in any form or by any means, is strictly prohibited.
, +27 81 278 3372
BALANCED CLAUSES FOR A LESOTHO ZAMBIA BILATERAL INVESTMENT
TREATY
Keywords
Bilateral investment treaty; foreign investment; Lesotho; Zambia; investor protection;
host state regulation; fair and equitable treatment; expropriation; dispute settlement;
sustainable development.
Abbreviations and acronyms
BIT: Bilateral Investment Treaty
FET: Fair and Equitable Treatment
ISDS: Investor State Dispute Settlement
MFN: Most Favoured Nation
SADC: Southern African Development Community
ICSID: International Centre for Settlement of Investment Disputes
UNCITRAL: United Nations Commission on International Trade Law
Disclaimer
Great care has been taken in the preparation of this document; however, the contents are provided "as is"
without any express or implied representations or warranties. The author accepts no responsibility or
liability for any actions taken based on the information contained within this document. This document is
intended solely for comparison, research, and reference purposes. Reproduction, resale, or transmission
of any part of this document, in any form or by any means, is strictly prohibited.
, +27 81 278 3372
1. Introduction
Lesotho and Zambia need a bilateral investment treaty that attracts real investment
without giving away too much public power. A BIT is not only a document for
investors, because it also shapes how a state may regulate land, mining, taxation,
labour, health, the environment and public services. The proposed treaty should
therefore be written with care, because wide investor rights may later be used to
challenge ordinary decisions made by government. Investment law has moved away
from the older style where investor protection was treated as the main purpose of the
treaty. The better view is that the treaty should protect lawful investment while also
keeping enough space for both states to govern in the public interest. 1 The SADC
Model BIT is useful here because it links investment protection to sustainable
development and not only to private profit.2 This is important for Lesotho and Zambia
because both states still need policy freedom to deal with poverty, infrastructure,
employment and development.3
A balanced BIT must begin with a clear definition of investment, because this clause
decides which assets will receive treaty protection. If the definition is too wide,
almost every commercial interest may be treated as an investment, even where
there is no long term contribution to the host state. The treaty should therefore
protect investments that involve commitment of capital, risk, duration and a
contribution to development.4 This approach is supported by the well known
investment test used in Salini v Morocco, where the tribunal considered contribution,
duration, risk and development contribution as useful features of an investment.5 The
same idea fits Lesotho and Zambia because both states should not protect
speculative claims that do not bring meaningful economic value. A careful definition
can also exclude ordinary commercial sales, short term loans, public debt and claims
that arise only from contracts.6
1 M Sornarajah, The International Law on Foreign Investment (5th edn, Cambridge University Press
2021) 89.
2 Southern African Development Community, SADC Model Bilateral Investment Treaty Template with
Commentary (SADC 2012) art 1.
3 UNCTAD, Investment Policy Framework for Sustainable Development (UNCTAD 2015) 11.
4 Sornarajah, The International Law on Foreign Investment 92.
5 Salini Costruttori SpA and Italstrade SpA v Kingdom of Morocco ICSID Case No ARB/00/4,
Decision on Jurisdiction, 23 July 2001, para 52.
6 SADC Model BIT art 2.
Disclaimer
Great care has been taken in the preparation of this document; however, the contents are provided "as is"
without any express or implied representations or warranties. The author accepts no responsibility or
liability for any actions taken based on the information contained within this document. This document is
intended solely for comparison, research, and reference purposes. Reproduction, resale, or transmission
of any part of this document, in any form or by any means, is strictly prohibited.
Assignment 1 2026
Unique number:
Due Date: 28 May 2026
BALANCED CLAUSES FOR A LESOTHO ZAMBIA BILATERAL INVESTMENT TREATY
Keywords
Bilateral investment treaty; foreign investment; Lesotho; Zambia; investor protection; host
state regulation; fair and equitable treatment; expropriation; dispute settlement; sustainable
development.
Abbreviations and acronyms
BIT: Bilateral Investment Treaty
FET: Fair and Equitable Treatment
ISDS: Investor State Dispute Settlement
MFN: Most Favoured Nation
Terms of use
SADC: Southern African Development Community By making use of this document you agree to:
Use this document as a guide for learning, comparison and reference purpose,
Terms of use
Not to duplicate, reproduce and/or misrepresent the contents of this document as your own work,
By making use of this document you agree to:
Use this document
Fully accept the consequences
solely as a guide forshould you plagiarise
learning, reference,or and
misuse this document.
comparison purposes,
Ensure originality of your own work, and fully accept the consequences should you plagiarise or misuse this document.
Comply with all relevant standards, guidelines, regulations, and legislation governing academic and written work.
Disclaimer
Great care has been taken in the preparation of this document; however, the contents are provided "as is" without any express or
implied representations or warranties. The author accepts no responsibility or liability for any actions taken based on the
information contained within this document. This document is intended solely for comparison, research, and reference purposes.
Reproduction, resale, or transmission of any part of this document, in any form or by any means, is strictly prohibited.
, +27 81 278 3372
BALANCED CLAUSES FOR A LESOTHO ZAMBIA BILATERAL INVESTMENT
TREATY
Keywords
Bilateral investment treaty; foreign investment; Lesotho; Zambia; investor protection;
host state regulation; fair and equitable treatment; expropriation; dispute settlement;
sustainable development.
Abbreviations and acronyms
BIT: Bilateral Investment Treaty
FET: Fair and Equitable Treatment
ISDS: Investor State Dispute Settlement
MFN: Most Favoured Nation
SADC: Southern African Development Community
ICSID: International Centre for Settlement of Investment Disputes
UNCITRAL: United Nations Commission on International Trade Law
Disclaimer
Great care has been taken in the preparation of this document; however, the contents are provided "as is"
without any express or implied representations or warranties. The author accepts no responsibility or
liability for any actions taken based on the information contained within this document. This document is
intended solely for comparison, research, and reference purposes. Reproduction, resale, or transmission
of any part of this document, in any form or by any means, is strictly prohibited.
, +27 81 278 3372
1. Introduction
Lesotho and Zambia need a bilateral investment treaty that attracts real investment
without giving away too much public power. A BIT is not only a document for
investors, because it also shapes how a state may regulate land, mining, taxation,
labour, health, the environment and public services. The proposed treaty should
therefore be written with care, because wide investor rights may later be used to
challenge ordinary decisions made by government. Investment law has moved away
from the older style where investor protection was treated as the main purpose of the
treaty. The better view is that the treaty should protect lawful investment while also
keeping enough space for both states to govern in the public interest. 1 The SADC
Model BIT is useful here because it links investment protection to sustainable
development and not only to private profit.2 This is important for Lesotho and Zambia
because both states still need policy freedom to deal with poverty, infrastructure,
employment and development.3
A balanced BIT must begin with a clear definition of investment, because this clause
decides which assets will receive treaty protection. If the definition is too wide,
almost every commercial interest may be treated as an investment, even where
there is no long term contribution to the host state. The treaty should therefore
protect investments that involve commitment of capital, risk, duration and a
contribution to development.4 This approach is supported by the well known
investment test used in Salini v Morocco, where the tribunal considered contribution,
duration, risk and development contribution as useful features of an investment.5 The
same idea fits Lesotho and Zambia because both states should not protect
speculative claims that do not bring meaningful economic value. A careful definition
can also exclude ordinary commercial sales, short term loans, public debt and claims
that arise only from contracts.6
1 M Sornarajah, The International Law on Foreign Investment (5th edn, Cambridge University Press
2021) 89.
2 Southern African Development Community, SADC Model Bilateral Investment Treaty Template with
Commentary (SADC 2012) art 1.
3 UNCTAD, Investment Policy Framework for Sustainable Development (UNCTAD 2015) 11.
4 Sornarajah, The International Law on Foreign Investment 92.
5 Salini Costruttori SpA and Italstrade SpA v Kingdom of Morocco ICSID Case No ARB/00/4,
Decision on Jurisdiction, 23 July 2001, para 52.
6 SADC Model BIT art 2.
Disclaimer
Great care has been taken in the preparation of this document; however, the contents are provided "as is"
without any express or implied representations or warranties. The author accepts no responsibility or
liability for any actions taken based on the information contained within this document. This document is
intended solely for comparison, research, and reference purposes. Reproduction, resale, or transmission
of any part of this document, in any form or by any means, is strictly prohibited.
