Definition of investment in international investment treaties is the key to the legal protection under the treaty. In various international investment agreements, there are different definitions of investment. These may be broader or narrower; they may be oriented in a specific area, or more general. If we want to determine whether a given transaction meets the criterion of international investment in the international investment agreement, it is necessary to resort to the rules and practice of interpretation. Arbitration practice has formed guidelines for interpretation of the term investment through extensive practice. However, extensive judicial practice does not mean that it is stable and unified. This master's thesis is aimed to analyze the line between international commercial transactions and investments and deal with the relevant criteria, based on which we would be able to, independent from the definition set in the bilateral investment agreement, assess whether a transaction is an investment, or just international commercial transaction. The hypothesis of this thesis is that too broad interpretation of the concept of investment can threaten the system of investment arbitration. The first part is aimed at addressing the origin of the need to protect investments. The second part analyzes the concept of investment and shapes of its definition in the international investment agreements. Then I address the practice of arbitration awards in investment arbitration and the tendency of its coherence. The last part is aimed at discussion of the relationship between investment and commercial arbitration and transactions that the latter two institutions govern and at addressing the question of who has the responsibility to set the line between them. I conclude with a finding that incoherent investment arbitration practice and too broad interpretation of the term investment could consequently lead to a loss of purpose for which investment arbitration was created.
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