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The Nationality of Natural and Juridical Persons in International Investment Law

  • Chapter
Private Actors in International Investment Law

Part of the book series: European Yearbook of International Economic Law ((Spec. Issue))

Abstract

This chapter addresses the role of the home state of the investor as negotiator and drafter of its international investment agreements (IIAs) with regard to the definition of “national”. Such a treaty definition comprises natural and juridical persons and is determinative of the jurisdiction ratione personae of international investment tribunals. As to individuals, the principle of effectiveness in single nationality determinations is critically investigated, whereas in dual nationality cases tribunals have usually applied the customary principle of dominant and effective nationality. However, Article 25(2)(a) of the International Centre for the Settlement of Investment Disputes (ICSID) Convention, which categorically prohibits claims by dual nationals of both the home and the host state, represents a relevant exception to the general rule under customary international law. As to corporations, the vast majority of international investment agreements (IIAs) adopts the incorporation test as sufficient and exclusive criteria for the definition of nationality. When confronted with such treaty provisions, arbitral tribunals have traditionally interpreted and applied them without requiring any thresholds of substantive bond between putatively covered investors and their alleged home state. Therefore, this chapter focuses on questionable phenomena of treaty shopping, including by shell companies and round tripping, which have been tolerated by arbitrators and nonetheless accepted in the legal scholarship. Finally, the author provides various types of treaty provisions that may be stipulated by states when negotiating or renegotiating their IIAs with a view to appropriately accommodate the policy concerns that are raised in this chapter.

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Notes

  1. 1.

    Alschner (2014), pp. 293 et seq.

  2. 2.

    Paulsson (1995), p. 232.

  3. 3.

    As to the jurisdiction ratione personae of international investment tribunals, see Broches (1972), pp. 354–361; Amerasinghe (1974–1975), p. 227; Sacerdoti (1997), pp. 310–320; Hirsch (1993), pp. 62–104; Vandevelde (2010), pp. 157–175; Schlemmer (2008), pp. 69–81; Sasson (2017), pp. 75–100.

  4. 4.

    See Sect. 4 of this chapter.

  5. 5.

    As to the application of the doctrine of jurisdictional “outer limits” in ISDS also outside ICSID arbitration in relation to the objective notion of “investment”, see Romak S.A.(Switzerland) v. The Republic of Uzbekistan, UNCITRAL, PCA Case No. AA280, Award, 26 November 2009, para. 207; Alps Finance and Trade AG (AFT) v. The Slovak Republic, UNCITRAL, Award, 5 March 2011, para. 243; Christian Doutremepuich and Antoine Doutremepuich v. Republic of Mauritius, PCA Case No. 2018-37, Award on Jurisdiction, 23 August 2019, para. 118. Contra, Mytilineos Holdings SA v. The State Union of Serbia & Montenegro and Republic of Serbia, UNCITRAL, Partial Award on Jurisdiction, 8 September 2006, paras 117–118 (holding that the only requirements that have to be fulfilled in order to confer ratione materiae jurisdiction on a non-ICSID tribunal are those under the BIT).

  6. 6.

    See, for instance, the Model BITs of France (2006), US (2012), UK (2008) and Germany (2008). Also the Germany-Pakistan BIT (1959), recorded as the first BIT in history, provided at Article 8(3) as follows: “The term “nationals” shall mean: (a) in respect of the Federal Republic of Germany, Germans within the meaning of the Basic Law for the Federal Republic of Germany; (b) in respect of Pakistan, a person who is a citizen of Pakistan according to its laws”. See Hussein Nuaman Soufraki v. The United Arab Emirates, ICSID Case No. ARB/02/7, Award, 7 July 2004, para. 55; Champion Trading Company, Ameritrade International, Inc., James T. Wahba, John B. Wahba and Timothy T. Wahba v. Arab Republic of Egypt, ICSID Case No. ARB/02/9, Decision on Jurisdiction, 21 October 2003, para. 3.4.1; Ioan Micula, Viorel Micula, S.C. European Food S.A, S.C. Starmill S.R.L. and S.C. Multipack S.R.L. v. Romania, ICSID Case No. ARB/05/20, Decision on Jurisdiction and Admissibility, 24 September 2008, paras 86–101; Victor Pey Casado and President Allende Foundation v. Republic of Chile, ICSID Case No. ARB/98/2, Award, 8 May 2008, paras 254 et seq.; Waguih Elie George Siag and Clorinda Vecchi v. The Arab Republic of Egypt, ICSID Case No. ARB/05/15, Decision on Jurisdiction, 11 April 2007, para. 143, 195.

  7. 7.

    International Law Commission (John R. Dugard, Special Rapporteur), Draft Articles on Diplomatic Protection, with commentaries (ILC Commentary on Diplomatic Protection), Report of the International Law Commission on the Work of its Fifty-Eighth Session, 1 May-9 June and 3 July-11 August 2006, UN Document A/61/10, in YBILC, 2006, Volume II (Part 2), p. 23, document A/CN.4/SER.A/2006/Add.l (Part 2). See Crawford (2006), p. 19; Pellet (2008), p. 33. See also Nationality Decrees Issued in Tunis and Morocco (French Zone) on November 8th, 1921, Advisory Opinion, 7 February 1923, PCIJ Reports 1923, Series B, No. 4, p. 24. See also Convention on Certain Questions Relating to the Conflict of Nationality Laws, signed at The Hague on 12 April 1930, entered into force on 1 July 1937, 179 LNTS 89 (1930 Hague Convention), 99 (1937), Article 1: “It is for each State to determine under its own law who are its nationals. This law shall be recognised by other States in so far as it is consistent with international conventions, international custom, and the principles of law generally recognised with regard to nationality”.

  8. 8.

    ILC Commentary on Diplomatic Protection, p. 29.

  9. 9.

    See also Harvard Law School (Manley O. Hudson, Director), Research in International Law, Draft Conventions and Comments, Part I, “The Law of Nationality” (Richard W. Flournoy, Jr., Rapporteur), Article 2 (1929) 23 Special Number Am. J. Int’l L. Spec. Sup. 13, 24: “but under international law the power of a state to confer its nationality is not unlimited”.

  10. 10.

    Nottebohm (Liechtenstein v. Guatemala), Second Phase, Judgment, 6 April 1955, ICJ Reports 1955, p. 4, at 22–23: “nationality is a legal bond having as its basis a social fact of attachment, a genuine connection of existence, interests and sentiments, together with the existence of reciprocal rights and duties”.

  11. 11.

    Borchard (1915), p. 16: “The alien thus has rights as an individual and as member of a definite political group”.

  12. 12.

    McLachlan et al. (2017), p. 159. See Ioan Micula, Viorel Micula, S.C. European Food S.A, S.C. Starmill S.R.L. and S.C. Multipack S.R.L. v. Romania, ICSID Case No. ARB/05/20, Decision on Jurisdiction and Admissibility, 24 September 2008, paras 99 et seq.; Saba Fakes v. Republic of Turkey, ICSID Case No. ARB/07/20, Award, 14 July 2010, paras 68–69; Waguih Elie George Siag and Clorinda Vecchi v. The Arab Republic of Egypt, ICSID Case No. ARB/05/15, Decision on Jurisdiction, 11 April 2007, paras 198–199.

  13. 13.

    Saba Fakes v. Republic of Turkey, ICSID Case No. ARB/07/20, Award, 14 July 2010, paras 79–80.

  14. 14.

    Waguih Elie George Siag and Clorinda Vecchi v. The Arab Republic of Egypt, ICSID Case No. ARB/05/15, Partial Dissenting Opinion of Professor Francisco Orrego Vicuña, 11 April 2007, p. 62: “As the ICSID Convention does not define nationality, the principles of international law governing this matter come into play instantly. Cardinal among such principles is that of effectiveness. Ever since the Nottebohm case, this has been the accepted premise in international law and the recent work on the diplomatic protection of persons and property of both the International Law Commission and the International Law Association so confirms”.

  15. 15.

    Waguih Elie George Siag and Clorinda Vecchi v. The Arab Republic of Egypt, ICSID Case No. ARB/05/15, Decision on Jurisdiction, 11 April 2007, paras 142–201. The two claimants were Ms. Clorinda Vecchi and Mr. Waguih Elie George Siag, her son. Ms. Vecchi was Italian from birth, but later married an Egyptian national and acquired Egyptian nationality, losing at the same time her Italian nationality. After the death of her husband, Ms. Vecchi reacquired the Italian citizenship pursuant to Italian law. Mr. Siag was Egyptian from birth. Then, he acquired Lebanese citizenship, maintaining his Egyptian nationality. Finally, he married an Italian national and acquired Italian nationality under Italian law.

  16. 16.

    Hussein Nuaman Soufraki v. The United Arab Emirates, ICSID Case No. ARB/02/7, Award, 7 July 2004, para. 55. Accord, Hussein Nuaman Soufraki v. The United Arab Emirates, ICSID Case No. ARB/02/7, Decision on Annulment, 5 June 2007, para. 93. This principle was already stated in the first edition of the Commentary Schreuer. See, as a confirmation, Schreuer et al. (2009), paras 641–656, pp. 265–269.

  17. 17.

    Vienna Convention on the Law of Treaties (VCLT), signed on 23 May 1969, entered into force on 27 January 1980, 1155 UNTS 331.

  18. 18.

    Victor Pey Casado and President Allende Foundation v. Republic of Chile, ICSID Case No. ARB/98/2, Award, 8 May 2008, para. 319; Ioan Micula, Viorel Micula, S.C. European Food S.A, S.C. Starmill S.R.L. and S.C. Multipack S.R.L. v. Romania, ICSID Case No. ARB/05/20, Decision on Jurisdiction and Admissibility, 24 September 2008, para. 87; Waguih Elie George Siag and Clorinda Vecchi v. The Arab Republic of Egypt, ICSID Case No. ARB/05/15, Decision on Jurisdiction, 11 April 2007, paras 148–153 and 193.

  19. 19.

    Mohamed Abdel Raouf Bahgat v. Arab Republic of Egypt, PCA Case No. 2012–07, Decision on Jurisdiction, 30 November 2017, paras 170–174, 187.

  20. 20.

    García Olmedo (2017), p. 695; Michalopoulos and Hicks (2019), p. 121. See also Mahoney (1984), p. 695.

  21. 21.

    van Panhuys (1959), p. 74; Rode (1959), pp. 140–141; Leigh (1971), p. 459.

  22. 22.

    Canevaro Case (Italy v. Peru), Permanent Court of Arbitration (PCA), Award, 3 May 1912, 11 RIAA 397 (1912), in George Grafton Wilson (ed.), The Hague Arbitration Cases (Ginn 1915) 238, (1912) 6 Am. J. Int’l L. 746; Mergé Case (United States of America v. Italy), Decision No. 55, 10 June 1955, 14 RIAA 236, 247 (1955). Contra, Alexander Case (Great Britain v. United States of America), in John Bassett Moore, History and Digest of the International Arbitrations to which the United States has been a Party), vol. III (Government Printing Office 1898) 2529–2531; Salem Case (United States of America v. Egypt), Award, 8 June 1932, 2 RIAA 1161, 1187 (1932). See Basdevant (1909), p. 60.

  23. 23.

    Iran-United States Claims Tribunal, Full Tribunal, Case No. A/18, Decision on the Question of Jurisdiction over Claims of Persons with Dual Nationality, 6 April 1984, 5 IUSCTR 251, 263, 265 (1984-I); Iran-United States Claims Tribunal, Chamber Two, Nasser Esphahanian v. Bank Tejarat, Award No. 31-157-2, 29 March 1983, 2 IUSCTR 157, 160–161, 168 (1983-I); Iran-United States Claims Tribunal, Chamber One, Rana Nikpour v. The Islamic Republic of Iran and Foundation for the Oppressed, Interlocutory Award No. ITL 81-336-1, 18 February 1993, 29 IUSCTR 67, 75 (1993). See Brower and Brueschke (1998), pp. 288 et seq.

  24. 24.

    Nottebohm, at 22.

  25. 25.

    Case No. A/18, p. 265.

  26. 26.

    ILC Commentary on Diplomatic Protection, p. 34.

  27. 27.

    Article 10.28 of the DR-CAFTA. See Michael Ballantine and Lisa Ballantine v. The Dominican Republic, UNCITRAL, PCA Case No. 2016-17, Final Award, 3 September 2019, paras 503–600 (jurisdiction ratione personae denied under DR-CAFTA, since the Dominican nationality of the claimants was deemed to be dominant and to prevail over their American nationality). See also US Model BIT (2012), Article 1 and US-Colombia Trade Protection Agreement (TPA), Article 10.28. Instead, an isolated example of preclusion of claims by dual nationals seems to be found in Article 1(e) of the Canada-Lebanon BIT (1997): “In the case of persons who have both Canadian and Lebanese citizenship, they shall be considered Canadian citizens in Canada and Lebanese citizens in Lebanon”.

  28. 28.

    Champion Trading Company, Ameritrade International, Inc., James T. Wahba, John B. Wahba and Timothy T. Wahba v. Arab Republic of Egypt, ICSID Case No. ARB/02/9, Decision on Jurisdiction, 21 October 2003, para. 3.4.1; Saba Fakes v. Republic of Turkey, ICSID Case No. ARB/07/20, Award, 14 July 2010, paras 58–63; Waguih Elie George Siag and Clorinda Vecchi v. The Arab Republic of Egypt, ICSID Case No. ARB/05/15, Decision on Jurisdiction, 11 April 2007, para. 198; Victor Pey Casado and President Allende Foundation v. Republic of Chile, ICSID Case No. ARB/98/2, Award, 8 May 2008, para. 241; Ioan Micula, Viorel Micula, S.C. European Food S.A, S.C. Starmill S.R.L. and S.C. Multipack S.R.L. v. Romania, ICSID Case No. ARB/05/20, Decision on Jurisdiction and Admissibility, 24 September 2008, para. 100.

  29. 29.

    Case No. A/18, p. 265.

  30. 30.

    Report of the Executive Directors on the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (Report of the Executive Directors), 18 March 1965, para. 29, 1 ICSID Reports 23, 29 (1993).

  31. 31.

    1930 Hague Convention: “A State may not afford diplomatic protection to one of its nationals against a State whose nationality such person also possesses”.

  32. 32.

    Serafín García Armas and Karina García Gruber v. Bolivarian Republic of Venezuela, PCA Case No. 2013-3, Decision on Jurisdiction, 15 December 2014, paras 197–206 (quoting inter alia Jan Oostergetel and Theodora Laurentius v. The Slovak Republic, UNCITRAL, Decision on Jurisdiction, 30 April 2010, para. 130). The decision on jurisdiction in Serafín v. Venezuela was partially set aside by the Court of Appeal of Paris on 25 April 2017 on the ground that the tribunal had failed to consider whether the claimants were Spanish nationals at the time they made their investment. See Court of Appeal of Paris, 1st Civil Division, Judgment, 25 April 2017, RG No. 15/01040. The Government of Venezuela challenged the decision of the Court of Appeal before the Court of Cassation, which held on 13 February 2019 that the lower court erred in so far as it neglected to draw all the legal consequences stemming from its findings. Thus, it reinstated the arbitral tribunal’s decision on jurisdiction and remanded the case to a different chamber of the Court of Appeal of Paris in order to decide Venezuela’s annulment application. See Court of Cassation, 1st Civil Division, Judgment, 13 February 2019, No. 157 F-D. In the meantime, on 26 April 2019, the arbitral tribunal rendered its final award whereby it found that Venezuela had breached the BIT and international law by illegally expropriating the claimants’ investment, adopting arbitrary measures and failing to ensure the standard of fair and equitable treatment. Therefore, it awarded as compensation to the investors the total sum of USD 214 million, plus interest. See Serafín García Armas and Karina García Gruber v. Bolivarian Republic of Venezuela, PCA Case No. 2013-3, Final Award, 26 April 2019. The Serafín García Armas v. Venezuela decision on jurisdiction has been finally set aside by the Court of Appeal of Paris on 3 June 2020. The effects of the annulment decision extend also to the final award. See Court of Appeal of Paris, Pôle 5, 16° Division, Judgment, 3 June 2020, RG No. 19/03588. For a commentary, see de Stefano (2020), p. 885.

  33. 33.

    Manuel García Armas et al. v. Bolivarian Republic of Venezuela, UNCITRAL, PCA Case No. 2016-08, Award on Jurisdiction, 13 December 2019. An identically constituted tribunal is adjudicating a cognate claim under the ICSID Additional Facility Rules, see Luis García Armas v. Bolivarian Republic of Venezuela, ICSID Case No. ARB(AF)/16/1. Decision on Jurisdiction, 24 July 2020, where the arbitrators affirmed their jurisdiction ratione voluntatis and ratione personae.

  34. 34.

    Manuel García Armas et al. v. Bolivarian Republic of Venezuela, UNCITRAL, PCA Case No. 2016-08, Award on Jurisdiction, 13 December 2019, para. 741. Accord, Enrique and Jorge Heemsen v. Venezuela, UNCITRAL, PCA Case No. 2017-18, Award on Jurisdiction, 29 October 2019, para. 440.

  35. 35.

    Dawood Rawat v. The Republic of Mauritius, UNCITRAL, PCA Case No. 2016-20, Award on Jurisdiction, 6 April 2018, paras 162–184.

  36. 36.

    The Bolivarian Republic of Venezuela signed the ICSID Convention on 18 August 1993. The Convention entered into force for Venezuela on 1 June 1995. The BIT was signed on 14 May 1996 and entered into force on 16 October 1998. The Republic denounced the ICSID Convention on 24 January 2012 with effects from 25 July 2012.

  37. 37.

    Enrique and Jorge Heemsen v. Venezuela, UNCITRAL, PCA Case No. 2017-18, Award on Jurisdiction, 29 October 2019, para. 410.

  38. 38.

    Paras 417–418.

  39. 39.

    Article XI(2)-(3) of the Spain-Venezuela BIT (1995).

  40. 40.

    Manuel García Armas et al. v. Bolivarian Republic of Venezuela, UNCITRAL, PCA Case No. 2016-08, Award on Jurisdiction, 13 December 2019, paras 718–723.

  41. 41.

    David R. Aven et al. v. Republic of Costa Rica, UNCITRAL Case No. UNCT/15/3, Final Award, 18 September 2018, para. 215; Eudoro Armando Olguín v. República del Paraguay, ICSID Case No. ARB/98/5, Award, 26 July 2001, paras 61–62; Saba Fakes v. Republic of Turkey, ICSID Case No. ARB/07/20, Award, 14 July 2010, para. 62. As to the practice of mixed arbitral tribunals, see William Mackenzie, Individually and as Administrator of the Estate of Mary A. Mackenzie, Deceased, et al. (United States v. Germany), Award, 30 October 1925, 7 RIAA 288, 291 (1925); Salem Case (United States of America v. Egypt), Award, 8 June 1932, 2 RIAA 1161, 1188 (1932); Flegenheimer Case (United States of America v. Italy), Decision No. 182, 20 September 1958, 14 RIAA 327, 377 (1958).

  42. 42.

    ILC Commentary on Diplomatic Protection, p. 33: “Any State of which a dual or multiple national is a national may exercise diplomatic protection in respect of that national against a State of which that person is not a national.”

  43. 43.

    See Caflisch (1969), pp. 129–135; de Visscher (1961), p. 399 et seq.; Sacerdoti (1989), pp. 713–714; Seidl-Hohenveldern (1987), p. 8.

  44. 44.

    ILC Commentary on Diplomatic Protection, p. 37.

  45. 45.

    Barcelona Traction Light and Power Company, Limited (Belgium v. Spain), Judgment, Second Phase, 5 February 1970, para. 38, ICJ Reports 1970, p. 3, at 34.

  46. 46.

    Barcelona Traction, para. 71. The Barcelona Traction rule was subsequently upheld by the ICJ in Ahmadou Sadio Diallo (Republic of Guinea v. Democratic Republic of the Congo), Preliminary Objections, Judgment, 24 May 2007, paras 61, 89–94, ICJ Reports 2007, p. 582.

  47. 47.

    Ex plurimis, see Model BIT of UK (2008).

  48. 48.

    Chaisse (2015), p. 228: “treaty shopping [is] the process of routing an investment so as to gain access to an IIA where one did not previously exist or to gain access to more favorable IIA protection”.

  49. 49.

    For instance, in the investment treaty practice of Switzerland, which adopts the requirement of “real economic activities” and, recently, in the new Dutch Model Investment Agreement (2019). See Alps Finance and Trade AG (AFT) v. The Slovak Republic, UNCITRAL, Award, 5 March 2011, para 215; Yaung Chi Oo Trading Pte. Ltd. v. Government of the Union of Myanmar, ASEAN I.D. Case No. ARB/01/1, Award, 31 March 2003, para. 52, 42 ILM 540, 550; Tenaris S.A. and Talta - Trading e Marketing Sociedade Unipessoal Lda. v. Bolivarian Republic of Venezuela, ICSID Case No. ARB/11/26, Award, 29 January 2016, paras 148–150; Orascom TMT Investments S.à.r.l. v. People’s Democratic Republic of Algeria, ICSID Case No. ARB/12/35, Award, 31 May 2017, paras 316–323.

  50. 50.

    For instance, in the BITs of the Netherlands. See Mobil Corporation, Venezuela Holdings, B.V., et al. v. Bolivarian Republic of Venezuela, ICSID Case No. ARB/07/27, Decision on Jurisdiction, 10 June 2010, para. 153, where the tribunal equated the corporate control with the ownership of the company (control as “ownership”), holding that Article 1(b)(iii) of the Netherlands-Venezuela BIT (1991) only required a situation of potential exercise of control (legal control), rather than the actual decisive influence on the management of the “controlled” legal persons. Contra, Guardian Fiduciary Trust, Ltd., f/k/a Capital Conservator Savings & Loan, Ltd. v. Macedonia, former Yugoslav Republic of, ICSID Case No. ARB/12/31, Award, 22 September 2015, paras 136–137, where the tribunal applied Article 1(b)(iii) of the Netherlands-Macedonia BIT (1998).

  51. 51.

    de Stefano (2016), p. 143.

  52. 52.

    Douglas (2009), pp. 468–469.

  53. 53.

    See Sect. 1 of this chapter.

  54. 54.

    The ICJ was confronted with this scenario in Elettronica Sicula S.p.A (ELSI) (United States of America v. Italy), Judgment, 20 July 1989, ICJ Reports 1989, p. 15.

  55. 55.

    Hirsch (1993), pp. 96 and 102.

  56. 56.

    TSA Spectrum de Argentina S.A. v. Argentine Republic, ICSID Case No. ARB/05/5, Award, 19 December 2008, para. 147; Burimi SRL and Eagle Games SH.A. v. Republic of Albania, ICSID Case No. ARB/11/18, Award, 29 May 2013, para. 121; National Gas S.A.E. v. Arab Republic of Egypt, ICSID Case No. ARB/11/7, Award, 3 April 2014, para. 136; Caratube International Oil Company LLP v. Republic of Kazakhstan, ICSID Case No. ARB/08/12, Award, 5 June 2012, para. 337; Guardian Fiduciary Trust, Ltd., f/k/a Capital Conservator Savings & Loan, Ltd. v. Macedonia, former Yugoslav Republic of, ICSID Case No. ARB/12/31, Award, 22 September 2015, paras 125–140; Eskosol S.p.A. in liquidazione v. Italian Republic, ICSID Case No. ARB/15/50, Decision on Respondent’s Application Under Rule 41(5), 20 March 2017, para. 90. To the contrary, see especially Aguas del Tunari, S.A. v. Republic of Bolivia, ICSID Case No. ARB/02/3, Decision on Respondent’s Objections to Jurisdiction, 21 October 2005, paras 244–247 and 264.

  57. 57.

    KT Asia Investment Group B.V. v. Republic of Kazakhstan, ICSID Case No. ARB/09/8, Award, 17 October 2013, para. 114; Tokios Tokelės v. Ukraine, ICSID Case No. ARB/02/18, Decision on Jurisdiction, 29 April 2004, para. 36; ADC Affiliate Limited and ADC & ADMC Management Limited v. The Republic of Hungary, ICSID Case No. ARB/03/16, Award, 2 October 2006, para. 356 et seq., notably at para. 359; Saluka Investments B.V. v. The Czech Republic, UNCITRAL, Partial Award, 17 March 2006, para. 229; The Rompetrol Group N.V. v. Romania, ICSID Case No ARB/06/3, Decision on Respondent’s Preliminary Objections on Jurisdiction and Admissibility, 18 April 2008, para. 83, 93; AES Corporation v. The Argentine Republic, ICSID Case No. ARB/02/17, Decision on Jurisdiction, 26 April 2005, para. 77; Yukos Universal Limited (Isle of Man) v. The Russian Federation, PCA Case No. AA 227, UNCITRAL, Interim Award on Jurisdiction and Admissibility, 30 November 2009, para. 415; Veteran Petroleum Limited (Cyprus) v. The Russian Federation, PCA Case No. AA 228, UNCITRAL, Interim Award on Jurisdiction and Admissibility, 30 November 2009, para. 415.

  58. 58.

    Report of the Executive Directors, para. 23. See also Broches (1972), pp. 340 and 351–352; Delaume (1983), p. 794; Amerasinghe (1974–1975), pp. 229–230.

  59. 59.

    See, in contract-based arbitration, Niko Resources (Bangladesh) Ltd. v. People’s Republic of Bangladesh, Bangladesh Petroleum Exploration & Production Company Limited (“Bapex”) and Bangladesh Oil Gas and Mineral Corporation (“Petrobangla”), ICSID Case No. ARB/10/11 and 10/18, Decision on Jurisdiction, 19 August 2013, para. 197; Autopista Concesionada de Venezuela (Aucoven) v. Bolivarian Republic of Venezuela, ICSID Case No. ARB/00/5, Decision on Jurisdiction, 27 September 2001, para. 107, 134; Amco Asia Corporation, Pan American Development Limited and P.T. Amco Indonesia v. Republic of Indonesia, ICSID Case No. ARB/81/1, Decision on Jurisdiction, 25 September 1983, para. 14(ii)-(iii), 1 ICSID Reports 389, 394, 396 (1993); Kaiser Bauxite Company v. The Government of Jamaica, ICSID Case No. ARB/74/3, Decision on Jurisdiction, 6 July 1975, paras 19–20, 1 ICSID Reports 296, 303; Société Ouest Africaine des Bétons Industriels (SOABI) v. Gouvernement du Senegal, ICSID Case No. ARB/82/1, Decision on Jurisdiction, 1 August 1984, para. 29; Liberian Eastern Timber Corporation (LETCO) v. Liberia, ICSID Case No. ARB/83/2, Award, 31 March 1986, 2 ICSID Reports 346, 351; Southern Pacific Properties (Middle East) Limited (SPP) v. Arab Republic of Egypt, ICSID Case No. ARB/84/3, Decision on Jurisdiction I, 27 November 1985, para. 46, 3 ICSID Reports 120.

  60. 60.

    Ex multis, Phoenix Action, Ltd. v. The Czech Republic, ICSID Case No. ARB/06/5, Award, 15 April 2009, para. 142.

  61. 61.

    For an extensive analysis of the determination of corporate nationality in international investment law, see de Stefano (2019), pp. 819–855.

  62. 62.

    The Rompetrol Group N.V. v. Romania, ICSID Case No ARB/06/3, Decision on Respondent’s Preliminary Objections on Jurisdiction and Admissibility, 18 April 2008, para. 93.

  63. 63.

    Tokios Tokelės v. Ukraine, ICSID Case No. ARB/02/18, Decision on Jurisdiction, 29 April 2004, paras 28–29 and 36.

  64. 64.

    paras 53–56.

  65. 65.

    para. 29.

  66. 66.

    Barcelona Traction cit., para. 71.

  67. 67.

    ILC Commentary on Diplomatic Protection, p. 37. See also the early case of the S.S. “I’m Alone” (Canada v. United States of America), Joint Final Report of the Commissioners, 5 January 1935, 3 RIAA 1609, 1616 (1935), (1935) 29 Am. J. Int’l Law 327. See Fitzmaurice (1936), p. 104; Amadio (1967), p. 114. In the “I’m Alone” case, the arbitrators found that a vessel sunk by a US revenue cutter, although being a British ship of the Canadian registry, was de facto owned, controlled and managed by US nationals and, consequently, decided not to award any compensation for the loss of the ship or the cargo.

  68. 68.

    Tokios Tokelės v. Ukraine, ICSID Case No. ARB/02/18, Dissenting Opinion, 29 April 2004, paras 2–5 and para. 13.

  69. 69.

    Paras 10 and 19.

  70. 70.

    Para. 14.

  71. 71.

    However, see Report of the Executive Directors, para. 25: “While consent of the parties is an essential prerequisite for the jurisdiction of the Centre, consent alone will not suffice to bring a dispute within its jurisdiction”.

  72. 72.

    Tokios Tokelės v. Ukraine, ICSID Case No. ARB/02/18, Dissenting Opinion, 29 April 2004, para. 23.

  73. 73.

    Para. 8.

  74. 74.

    KT Asia Investment Group B.V. v. Republic of Kazakhstan, ICSID Case No. ARB/09/8, Award, 17 October 2013, paras 114 et seq.; Gold Reserve Inc. v. Bolivarian Republic of Venezuela, ICSID Case No. ARB(AF)/09/1, Award, 22 September 2014, paras 252–255; Yukos Universal Limited (Isle of Man) v. The Russian Federation, PCA Case No. AA 227, UNCITRAL, Interim Award on Jurisdiction and Admissibility, 30 November 2009, para. 432; ADC Affiliate Limited and ADC & ADMC Management Limited v. The Republic of Hungary, ICSID Case No. ARB/03/16, Award, 2 October 2006, para. 360; Rompetrol v. Romania cit., para. 110; Waguih Elie George Siag and Clorinda Vecchi v. The Arab Republic of Egypt, ICSID Case No. ARB/05/15, Decision on Jurisdiction, 11 April 2007, para. 210; Mobil Corporation, Venezuela Holdings, B.V., et al. v. Bolivarian Republic of Venezuela, ICSID Case No. ARB/07/27, Decision on Jurisdiction, 10 June 2010, para. 198; Joseph Charles Lemire v. Ukraine, ICSID Case No. ARB/06/18, Decision on Jurisdiction and Liability, 14 January 2010, para. 56; Saipem S.p.A. v. People’s Republic of Bangladesh, ICSID Case No. ARB/05/07, Decision on Jurisdiction and Recommendation on Provisional Measures, 21 March 2007, para. 106. See, as to earlier cases, Tradex Hellas S.A. v. Republic of Albania, ICSID Case No. ARB/94/2, Award, 29 April 1999, paras 108–111; Eudoro Armando Olguín v. República del Paraguay, ICSID Case No. ARB/98/5, Award, 26 July 2001, para. 66, footnote 4; Wena Hotels Limited v. Arab Republic of Egypt, ICSID Case No. ARB/98/4, Award, 8 December 2000, para. 126, 41 ILM 896, 819.

  75. 75.

    See, ex multis, Alexandrov (2005), pp. 37 and 40.

  76. 76.

    TSA Spectrum de Argentina S.A. v. Argentine Republic, ICSID Case No. ARB/05/5, Award, 19 December 2008, para. 145.

  77. 77.

    Venoklim Holding B.V. v. Bolivarian Republic of Venezuela, ICSID Case No. ARB/12/22, Award, 3 April 2015, para. 156. See also Société Civile Immobilière de Gaëta v. Republic of Guinea, ICSID Case No. ARB/12/36, Award, 21 December 2015, paras 180–183 (consent to the jurisdiction of the Centre contained in the Guinean Investment Code). To closer examination, both the Venoklim and Gaëta tribunals were influenced by the requirement of effective control established by domestic statutes.

  78. 78.

    Vandevelde (2010), p. 161: “A country that concludes a BIT using the place of incorporation test may have in effect a BIT with the entire world”.

  79. 79.

    Hussein Nuaman Soufraki v. The United Arab Emirates, ICSID Case No. ARB/02/7, Award, 7 July 2004, para 83: “had Mr. Soufraki contracted with the United Arab Emirates through a corporate vehicle incorporated in Italy, rather than contracting in his personal capacity, no problem of jurisdiction would now arise”. See also Accord, Champion Trading Company, Ameritrade International, Inc., James T. Wahba, John B. Wahba and Timothy T. Wahba v. Arab Republic of Egypt, ICSID Case No. ARB/02/9, Decision on Jurisdiction, 21 October 2003, para. 3.4.2.

  80. 80.

    With regard to the Netherlands, the UNCTAD, at the request of the Dutch Ministry of Foreign Affairs, undertook the study Treaty-based ISDS Cases Brought Under Dutch IIAs: an Overview (30 June 2015), http://investmentpolicyhub.unctad.org/Publications/Details/135, which found that “[i]n around three quarters of Dutch cases, the ultimate owners of the claimants are not Dutch. In two-thirds of those cases, the relevant foreign-owned group of companies does not appear to engage in substantial business activities in the Netherlands” (at 1).

  81. 81.

    Article 1(b)(ii) of the Netherlands Model Investment Agreement, text as of 22 March 2019.

  82. 82.

    Dolzer and Schreuer (2012), p. 52.

  83. 83.

    Ex multis, Aguas del Tunari, S.A. v. Republic of Bolivia, ICSID Case No. ARB/02/3, Decision on Respondent’s Objections to Jurisdiction, 21 October 2005, para. 330(d). See also HICEE B.V. v. The Slovak Republic, UNCITRAL, PCA Case No. 2009-11, Partial Award, 23 May 2011, para. 103.

  84. 84.

    See Schill (2010), pp. 234–235; Valasek and Dumberry (2011), pp. 58–59.

  85. 85.

    McLachlan et al. (2017), p. 159.

  86. 86.

    Ex multis, Pauwelyn (2014), pp. 380 and 405–407.

  87. 87.

    On MFN clauses and treaty shopping, see Schill (2009), pp. 187–188.

  88. 88.

    The conditions of the jurisdiction ratione personae of a treaty-based investment arbitration tribunal cannot be overridden and supplanted through the operation of MFN clauses. See Impregilo S.p.A. v. Argentine Republic, ICSID Case No. ARB/07/17, Concurring and Dissenting Opinion of Professor Brigitte Stern, 21 June 2011, para. 64; HICEE B.V. v. The Slovak Republic, UNCITRAL, PCA Case No. 2009-11, Partial Award, 23 May 2011, para. 149; Garanti Koza LLP v. Turkmenistan, ICSID Case No. ARB/11/20, Decision on the Objection to Jurisdiction for Lack of Consent, 3 July 2013, para. 29. More recently, the same principle has been re-affirmed in Enrique and Jorge Heemsen v. Venezuela, UNCITRAL, PCA Case No. 2017-18, Award on Jurisdiction, 29 October 2019, para. 408, and in Itisaluna Iraq LLC et al. v. Republic of Iraq, ICSID Case No. ARB/17/10, Award, 3 April 2020, para. 150.

  89. 89.

    Article 34 of the VCLT.

  90. 90.

    United Nations General Assembly, International Law Commission, Final Report, Study Group on the Most-Favoured-Nation clause, Sixty-seventh session, A/CN.4/L.852, 29 May 2015, para. 105.

  91. 91.

    Douglas (2009), p. 327.

  92. 92.

    Article 27 of the ICSID Convention.

  93. 93.

    See, as to the protection of companies, ILC Commentary on Diplomatic Protection, p. 43: “[d]iplomatic protection in respect of legal persons is mainly about the protection of foreign investment”. See Orrego Vicuña (2000), p. 342.

  94. 94.

    Amerasinghe (1974–1975), p. 256; Sasson (2017), p. 79; García Olmedo (2017), p. 723.

  95. 95.

    Barcelona Traction, para. 71.

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  1. Postdoctoral Researcher in International Law, Department of Law, Roma Tre University; Associate, BonelliErede Studio Legale, Milan, Italy

    Carlo de Stefano

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de Stefano, C. (2021). The Nationality of Natural and Juridical Persons in International Investment Law. In: Fach Gómez, K. (eds) Private Actors in International Investment Law. European Yearbook of International Economic Law(). Springer, Cham. https://doi.org/10.1007/978-3-030-48393-7_5

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