Nationality of Physical Persons
Nationality and Investment Treaty Claims
London, Friday 6 May 2005
Devashish Krishan
Nationality of Physical Persons
• 1875 – “I am an Englishman”
• Continental influence – Napoleonic Code
• World War I – nationality as dominant concept politically and
legally whereby individual (non-State entity) acquired the
standing/capacity/capability to derive international interests and
rights under international law
• No coherent international approach – failure of 1930 Hague
Convention
• BIT context – economically speaking, nationality crucial to the
benefit for the home State under the BIT
Proof of Nationality
• International Tribunal is a judge of its own competence; can order
production of evidence
• No rules in ICSID Convention/UNCITRAL Rules/BITs
• Proposal in ICSID – To allow decision by Home State’s
Government to control would be to give too much power to the
Investor’s state
• Burden of Proof is on Claimant and claims are inadmissible in
absence of proof of nationality (Expropriated Religious Properties
award, 1920)
Proof of Nationality (Contd.)
• Absent coherent rules on nationality in a given legal system, int’l
tribunals have determined that persons have had the nationality
of a State on the basis of its own judgment, even though it may
not have been entirely clear whether the law of that State
regarded them as nationals (Cayuga Indians award (G.B.)/USA,
1926), and sometimes even when they were not regarded as
citizens for domestic purposes (Kahane (successor)/Parisi and
the Austrian State decision, 1929-30)
• Tribunals have declined jurisdiction on the basis of nationality
when the individual may have been regarded as a national for
domestic purposes (Soufraki/UAE award)
Proof of Nationality (Contd.)
• Nationality proof is a question of fact that arises when the
question of law is answered in the affirmative – does the
individual have the standing/capacity/capability to invoke BIT
rights, including arbitration, under the applicable law? This is
question of jurisdiction rationae materiae primarily, which is
determined by an analysis of rationae personae.
• Distinct from the question of whether the Tribunal/ICSID Centre
had jurisdiction rationae personae (to investigate Claimant’s
standing as opposed to the question of standing itself). This
question answered under the provisions of Article 25, ICSID or
absence thereof – Can the Centre/Party transmit the claim to the
contracting host State triggering the latter’s obligation to answer
to the ICSID Secretariat/UNCITRAL arbitration?
Proof of Nationality (Contd.)
• The Tribunal in Soufraki/UAE, looked to Int’l law which points to
Municipal Law which points to relevant criteria. The Tribunal looks
to the fact of whether the potential Claimant satisfies such criteria
and adopts the finding as a matter of fact, not law.
• Therefore, nationality is determined as a question of international
law using Municipal law as a question of fact.
• No determination of the nationality concept as used domestically
is made – the individual’s status as a national for domestic
purposes remains unchanged. The Tribunal only makes a
determination on his/her status as a national for international
purposes.
C
X8 – Stateless national
Cayuga Indians arbitration
Kahane (successor) case
X3 – International interests/rights
Soufraki/U.A.E.
Any Third State
X7 – Triple national of A, B and C
X5 – Dual national of A and C
Nottebohm case
Flegenheimer claim
North Transsylavania Nationality case
Olguin/Paraguay
X2 – Int’l rights
Straightforward claim
Feldman/Mexico
X6 – Dual national of B and C
X
Individual Initiates Claim
Against B
X4 – Dual national of A and B
Champion Trading and others/Egypt
Iran/US Claims Tribunal Case A/18
Canevaro claim, 1910
ICSID Convention Article 25(1)(a)
B
A
BIT Party 1 – Home State
(Claimant)
X1 – Local Courts
No Int’l Law esp. Economic
Law; maybe human rights and
Jus cogen rights
Bilateral Investment Treaty
with investor-State arbitration
BIT Party 2 – Host State
(Respondent)
Multiple Nationality
• X4 to X7 are the only situations where interpretation is needed
• Nationality key that opens first door to consent by delimiting it
• Hurdles – (a) ICSID (positive and negative rule); (b) BIT (any
additional rules); (c) Other Int’l Law principles of nationality
• BIT/ad hoc arbitration – absent express provision, no limits on
jurisdiction in terms of nationality. Consent still necessary
• Outer limits of ICSID jurisdiction – agreement between individual
and host State as to his nationality not to be binding; Consent is
the cornerstone of ICSID jurisdiction
• “National of a contracting State” – means no question of theories
of “master” or “effective” nationality – minimum criteria to invoke
jurisdiction
“Effective Nationality” Theory
• “Effective Nationality” – Nottebohm Case: Expansive or narrow
view?
• “Effective link” should only operate in favour of defendant state
with which the individual has a closer connection that with the
Claimant state: the absence of an effective link is relevant to
negating the existence of nationality only in particular
circumstances.
End thoughts
•
Is there a distinction between nationality for arbitral jurisdiction,
particularly ICSID, and for capacity/standing/capability to hold BIT rights,
including right to arbitrate?
•
Soufraki – what was violated was the element of consent, not the
element of nationality in ICSID Article 25.
•
X is a national of A and B (B being defendant State) – would the analysis
under ICSID Convention and BIT/UNCITRAL Rules ad hoc arbitration
lead to same result?
•
Is the doctrine of effective nationality under Nottebhom dictum apposite
to BIT arbitration? Is it in harmony with the teleological purpose
prescribed by Article 31, VCLT?
Cases
• Cayuga Indians case (G.B. /USA), (1926) RIAA Vol. 6, 173.
• Kahane (Successor)/Parisi and the Austrian State, Case No. 131,
Annual Digest 5 (1929-1930), 213.
• Soufraki/United Arab Emirates, ICSID award.
• Expropriated Religious Properties, (1913) RIAA Vol. 1, 7.
• Feldman/Mexico, NAFTA Award.
• Nottebohm case, ICJ Rep. 1955, 4.
• Flegenheimer claim (USA/Italy) 1958 I.L.R. 91.
• North Transsylvania Nationality case, 1971 I.L.R. 43.
• Olguin/Paraguay, ICSID award.
• Champion Trading and others/Egypt, ICSID award.
• Case No. A/18, 5 Iran-U.S.C.T.R. 251.
• Canevaro claim (Italy/Peru – 1910), RIAA Vol. 11, 397.