137. The Respondent asserts that those expenditures were “pre-contractual
expenses” which, under the Mihaly International Corporation v. Democratic
Socialist Republic of Sri Lanka case, are not to be taken as investments. We
do not believe that Mihaly offers material guidance in the present circumstances.
The Claimant here did adduce evidence of expenditures it had
incurred in Pakistan to establish and operate liaison offices in Pakistan necessary
to enable it to perform its obligations under the PSI Agreement. It is not
disputed that that Agreement was in fact eventually signed and went into
effect. In Mihaly, no investment agreement was actually concluded by the parties; there was, in other words, no agreement to be performed by either party
and no investment actually made by the complainant.