The Challenge of the Barcelona Traction Hypothesis: Barcelona Traction Clauses and Denial of Benefits Clauses in BITS and IIAs

In: The Journal of World Investment & Trade

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  • I Barcelona Traction Light & Power Company Limited (Belgium v. Spain), (second phase), Judgment of 5 February 1970, Icj Rep. 1970, p. 7. 2 PETERS, P., ��Some Serendipitous Findings in BITS: the Barcelona Traction Case and the Reach of Bilateral Investment Treaties��, in: DENTERS, E.; SCHRIJVER, N. (eds), Reflections on International Law from the Low Countries in Honour of Paul de Waart, (The Hague/Boston/London: Martinus Nijhoff Yublishcrs, 1998), p. 29; SncEAnort, G., «Foreign and Foreign-owned Corporations in International Economic Law>\ in: DicicE, D.C. (ed.), Foreign Investment in the Present and a New International Economic Order, (Switzerland, Fribourg: University Press, Boulder, Colorado: Westview Press, 1987), p. 296; IATRIDou-KoKKINI, D.; DE WAART, Y.J.LM., «Foreign Investments in Developing Countries: Legal Personality of Multinationals in International Lam>, 14 Nyil (1983), p. 91.

  • 3 SCHREUER, Ch., «Shareholdcr Protection in International Investment Law», 2 (3) Tom (2005), pp. 4-5. 4 According to the IMF Balance of Payments Manual, �,[dlirect investors may be individuals; incorporated or unincorporated Private or public enterprises.; associated groups of individuals or enterprises; governments of gOt'ernment agencies; or estates, trusts, or other organizations that own (as described previously) direct investment enterprises in economies other than those in which direct investors reside* [IMF, Balance of Payments Manual, (Washington D.C.: IMF, September 15, 1993), (5th edition), para. 367, p. 87, available at: http://www.imf.org/external/pubs/ft/bopman/bopman.pdf. 5 PETEtts, P., op.cit., (supra, footnote 2), pp. 35-36. 6 Barcelona Traction Light & Power Company Limited (Belgium v. Spain), (second phase), Judgment of 5 February 1970, Icj Rep. 1970, p. 46. 7 Ibid., p. 48. 1 Ibid., p. 47. 9 Elettronica Sicula S.p.A. (ELSI) (United States ofAmerica v. Italy), Judgment of 20 July 1989, Ie; Rep. 1989, pp. 15-77. 10 The distinction between the company and its shareholders in the case of diplomatic protection has recently been confirmed by the Icj in the Diallo case [Ahmadou Sadio Diallo (Republic of Guinea v. Democratic Republic of Congo), Preliminary objections, Judgment of 24 May 2007, Icl Rep. 2007, pp. 30-31] and by the International Law Commission in the 2006 Draft Articles on Diplomatic Protection [International Law Commission, 2006 Draft Articles on Diplomatic Protection, arts 11 and 12; C.f ScHtL�, S.W., The Multilateralization of International Int,estmetit Law, (Cambridge: Cambridge University Press, 2009), p. 211].

  • " The International Law Commission proposed the diplomatic protection by the State of nationality of the shareholders when the incorporation at the host State «was required as n precondition for doivg business there. [International Law Commission, 2006 Draft Articles on Diplomatic Protection, Art. 11 (b)J. On the contrary, the Icj explicitly rejected the application of the theory of substitution on the facts of the Diallo case [Ahmadou Sadio Diallo (Republic of Guinea v. Democratic Republic of Congo), Preliminary objections, Judgment of24 May 2007, Icj Rep. 2007, p. 311. ORECO VICUNA, F., «Changing Approaches to the Nationality of Claims in the Context of Diplomatic Protection and International Dispute Settlements, 15 IcsiD Rev.-Fu� (2000), p. 359. '3 ALEXANDROV, S.A., «The "Baby Boom" of Treaty Based Arbitrations and the Jurisdiction of ICSID Tribunals: Shareholders as "Investors" and Jurisdiction Ratione Tampon!", 4 The Law & Practice of Irrt'I Courts and Tribunals (2005), p. 27. 14 NGUYEN, QUOC D.; DAILLIER, P.; PELLET, A., Droit International Public, (Paris: L.G.D.J., 1994) (5th edition), pp. 475-476 ; Cf. ACCONCI, P., ('Determining the Internationally Relevant Link between a State and a Corporate Investor: Recent Trends concerning the Application of the "Genuine Link" Test», 5 J. WI (2004), p. 139. 15 Nottebohm (Liechtenstein v. Guatemala), (second phase), Judgement of 6 April 1955, Ici Rep. 1955, p. 23. 1(i Barcelona Traction Light & Power Company Limited (Belgium v. Spain), (second phase), Judgment of 5 February 1970, Ici Rep. 1970, p. 42; Cf. FATOUUOS, A.A., «Problemes et methodes d'une reglementation des entreprises multinationales., 101 jDi (Clunet) (1974), p. 505; Id., «Transnational Enterprise in the Law of State Responsibility^ in: LlLLICH, R.B. (ed. & contrib.), International Law of State Responsibility for Injuries to Aliens, (Charlottesville: University Press of Virginia, 1983), p. 367. 17 Barcelona Traction Light & Power Company Limited (Belgium v. Spain), (second phase), Judgment of 5 February 1970, Separate opinion of Judgc Jessup, Icj Rep. 1970, p. 195. '8 MERCtAt, P., Let entreprises multinationales en droit international, (Bruxelles: Bruylant, 1993), pp. 19-20; VAGTS, D. F., «The multinational enterprise: a new challenge for transnational law», 83 Harvard Law Review (1970), pP. 740-741. 19 ALExANnROV, S.A., op.cit., (supra, footnote 13), p. 37; SCHILL, S.W., op.cit., (supra, footnote 10), p. 235.

  • 2" Barcelona Traction Light & Power Company Limited (Belgium v. Spain), (second phase), Judgment of 5 February I 970,IC] Rep. 1970, p. 42. 21 Iatridou-Kokkini, D.; DE WAART, P.J.I.M., op.cit., (supra, footnote 2), pp. 95-98; Cf FATOUROS, A.A., «The Computer and the Mud Hut: Notes on Multinational Enterprise in Developing Countries», 10 Col.J.Transnat'l Law (1971), p. 332; Id., «Problemes et methodes d'unc reglementation des entreprises multinationales», 101 Jm (Clunet) (1974), p. 506; Leaat·t, Ch., ,Une tentative de perception globale: Le recours a la nationalitc des societies". in: GOLDMAN, B.; FEZntv<:esenKts, Ph. (eds), L'entreprise multinationale face nu droit, (Paris: Litec, 1977), pp. 221-234; SACERDOTI, G., op.cit., (supra, footnote 2), pp. 296-297. =z CAI�REAU, D.; FLORY, Th.; JUILLARD P., Droit international economique, (Paris: L(:DJ, 1990), p. 588; PARRA, A.R., -The scope of new investment laws and international instruments", 4 Transnational Corporations (1995), pp. 40-41; UNCTAD, Scope and De/inition, UNCTAD Series on issues in international investment agreements, (United Nations: New York and Geneva, 1999), (UNCTAD/In/lrr/11, Vol. u), p. 37; Dotzett, R.; STEVENS, M., Bilateral Investment Treaties (The Hague/Boston/London: Martinus Nijhoff Publishers, 1995), pp. 35-42; MERCIAI, P., op.cit., (supra, footnote 18), pp. 22-24; ALE�tvntzc>v, S.A., op.cit., (supra, footnote 13), p. 36. z3 Gf YANNACA-SMALL, C., Definition of Investor and Investment in International Investment Agreements, in International Investment Law: Understartding Concepts and Tracking Innovations, (Paris, OECD 2008), pp. 18-24, available at: http://www.oecd.org/dataoecd/3/7/40471468.pdf.

  • =3 Great Britain Model Agreement for the Promotion and Protection of Investments (undated), Art. 1(d), reprinted in: DOLZER, R.; STEVENS, M., op.cit., (supra, footnote 22), p. 229. 25 NAFTA (1993), Part V, Chapter 2, Art. 201. 26 Energy Charter Treaty (1994), Art. 1(7). 27 Cotonou Agreement (2000), Annex II, Art. 14. 28 SCHREUER, Ch.H., The ICSID Convention: A Commentary, (Cambridge University Press, 2001), pp. 279-281; MU(:HLINSKI, P.; ORTINO, F.; SCHREUER. Ch. (eds), The Oxford Handbook of International Investment Law (Oxford University Press, 2008), p. 77; ALEXANDROV, S.A., op.cit., (supra, footnote 13), pp. 34-36. z9 Indeed, numerous BITS include in the definition of the term 'investment" the ownership of shares. Thus, the ICSID Tribunals recognised the right of the shareholders to pursue a claim for damage inflicted by a host State upon a company on the ground that their participation in the company constituted the investment �SCHREUER, Ch., op.cit., (supra, footnote 3), pp. 6-14; ALEXANDROV, S.A., op.cit., (supra, footnote 13), pp. 28-34; Muchlinski, P.; ORlnNO, F.; Sc:HREUER Ch. (eds), oy.cit., (supra, footnote 28), pp. 83-86; SCHaL, S.W., op.cit., (sura, footnote 10), pp. 202-204; Cf. AccONCI, P., op.cit., (supra, footnote 14), p. 153]. 30 ALEXANDROV, S.A., op.cit., (supra, footnote 13), p. 37, 40; MUCHLINSKI, P.; ORTINO, F.; SCHREUER, Ch. (eds), op.cit., (supra, footnote 28), p. 75; C� CARREAU, D.; FLORY, Th.; JutLLARn P., op.cit., (supra, footnote 22), pp. 581-582; STERN, B., «La protection diplomatique des investissements intemationaux: De Barcelona Traction a Elettronica Sicula ou les glissements progressifs de 1'analyse�>, 117 Jm (Clunet) (1990), pp. 936-937; IATRIDOU- KOKKINI, D.; DE WAART, P.J.l.M, op.cit., (supra, footnote 2), pp. 127-129, passim.

  • 'I Soumitomo Shoji America Inc. v. Lisa M. Avagliano et al.; Lisa M. Avagliano et al. v. Soumitomo Shoji America Inc., 457 US 176 (1982); See also Spiess v. Itoh & Co., 469 F.Supp. 1 (S.D.Tex. 1979); STERN, B., op.cit., (supra, footnote 30), p. 936. 32 Cf. SINCLAiR, A.C., «The substance of Nationality Requirements in Investment Treaty Arbitrations, 20 ICSID �t'-f7L/ (2005), p. 360. 33 Tokios Tokeles v. Ukraine (IcsW Case No. ARB/02/18), Decision on Jurisdiction, 29 April 2004, paras 28, 38, 108, available at: http;/ /ita.law.uvic.ca/documents/Tokios-Jurisdiction_OOO.pdf For an analysis and other cases see MUCHLINSKI, P.; ORTINO, F.; SCHREUER, Ch. (eds), Op.Cil., (supra, footnote 28), pp. 79-80; SCHILL, S.W., op.cit., (supra, footnote 10), pp. 227-228, 232; Schreuer, Ch., op.cit., (supra, footnote 3), p. 17; ALEXANDROV, S.A., op.cit., (supra, footnote 13), pp. 37-40. aa In particular, on the basis of the reference to «the Contracting Parties' intent to "intensify economic cooperation to the mutual benefit of both States" and "create and maintain favourable conditions for investment of investors of one State in the territory of the other State"- expressed in the Treaty's preamble and the SGS v. Philippines award which «interpreted nearly identical preambular language in the Philippines-Suritzerland Brr as indicative of the treaty's broad scope of investment protection*, the Tribunal concluded that othe object and the purpose of the Ukraine-Lithuania BIT is to provide broad protection of investors and their investments,, [Tokios Tokeles v. Ukraine (ICSID Case No. ARB/02/18), Decision on Jurisdiction, 29 April 2004, loc.cit., (supra, footnote 33), para. 31; Cm SeHCLL, S.W., op.cit., (supra, footnote 10), pp. 314-31 S]. 3' VnNneKVELDE, K.J., «The Economics of Bilateral Investment Treaties,>, 41 Harv. 7Mf't L.J. (2000), p. 60.

  • 3s ACCONCI, P., OP-cit-, (supra, footnote 14), pp. 141-142. 37 PETERS, P., op.cit., (supra, footnote 2), pp. 42-43. 3H Cf Ibid., p. 33. Cf. LEGUM, B., «Defining Investment and Investor: Who is entitled to Claim?�>, in: Making the Most of International Investment Agreements: A Common Agenda, Symposium Organised by Lesm, OECD and UNCTAD, Paris, 12 December 2005, available at: http://www.oecd.org/dataoecd/51/10/36370461.pdf, pp. 3-4. �° Switzerland-Uganda (1971), reprinted in: PETSKS, P., op.cit., (supra, footnote 2), pp. 29, 55-56. 41 Singapore-Switzerland (1978), reprinted in: PETERS, P., op.cit., (supra, footnote 2), pp. 29, 55-56.

  • ;= PETERS, P., op.cit., (supra, footnote 2), p. 37. ;3 Ibid., pp. 37-39. For other examples see Sinclair, A.C., op.cit., (supra, footnote 32), pp. 374-375. a� Netherlands-Poland (1992), reprinted in: PETERS, P., op.cit., (supra, footnote 2), p. 39. °5 Switzerland-Slovenia (1995), Art. 1(c), available at: http://www.unctad.org/sections/dite/iia/docs/bits/ switzerland slovenia fr.pdf Cf PETERS, P., op.cit., (supra, footnote 2), p. 40. '" Switzerland-Zambia (1994), reprinted in: PETERS, P., oy.cit., (supra, footnote 2), p. 33.

  • 47 BLEU-Sri Lanka (1982), reprinted in: PETERS, P., op.cit., (supra, footnote 2), p. 43. 48 Argentina-China (1992), Art. 1 (2), available at: http://www.uuctad.org/sections/dite/iia/docs/bits/ argentina_china.pdf; Cj' PETERS, P., op.cit., (supra, footnote 2), p. 44. 4') China-Japan (1988), Art. 12, reprinted in: PETERS, P., op.cit., (supra, footnote 2), p. 45; Cf Japan-Turkey (1992), Art. 12, available at: http://www.unctad.org/sections/dite/iia/docs/bits/turkey_japan.pdf. so Aguas de Tunari S.A. v. The Republic of Bolivia (ICSID Case No. AKtt/02/03), Decision on Jurisdiction, 21 October 2005, para. 71, available at: http://ita.law.uvic.ca/documents/AguasdelTunari-jurisdiction-cng_OOO.pdf. St Ibid., para. 80. 5= SfNCLAtR., A.C., op.cit., (supra, footnote 32), p. 369.

  • \.1 Aguas de Tunari S.A. v. The Republic of Bolivia (ICSID Case No. ARB/02/03), Decision on Jurisdiction, 21 October 2005, loc.cit., (supra, footnote 50), paras 85, 206. 54 Ibid., paras 206-209. 55 Ibid., para. 264. 56 Ibid., paras 315-323. 57 Franz Sedelmayer v. The Russian Federation (Arbitration Institute of the Stockholm Chamber of Commerce), Award, 1 July 1998, p. 27, available at: http://ita.law.uvic.ca/documents/investment_sedelmayer v ru.pdf Cf. Schreuer, Ch., op.cit., (supra, footnote 3), p. 16. 58 C'1 LEGUM, B., op.cit., (supra, footnote 39), pp. 3-4. 59 Enron Corporation and Ponderosa Assets L.P. v. The Argentine Republic (ICSID Case No. Aits/Ol/3), Decision on Jurisdiction, 14 January 2004, para. 46, available at: http://ita.law.uvic.ca/documents/Enron- Jurisdiction.pdf. bo U.S. Model Agreement Concerning the Encouragement and Reciprocal Protection of Investment (2004), Art. 2(1), available at: http://www.state.gov/documents/organization/38710.pdf. 6� U.S. Model Agreement Concerning the Encouragement and Reciprocal Protection of Investment (2004), loc.cit., (supra, footnote 60), Art. 1.

  • 62 Alex Genin, Eastern Credit Limited Inc. and A.S. Baltoil v. The Republic of Estonia (Icatu Case No. AttB/99/2), Award, 25 June 2001, 17 ICSID Rev.-FILj (2002), p. 78; Schreuer, Ch, op.cit., (supra, footnote 3), pp. 7-8. s3 American Manufacturing & Trading Inc. v. The Republic of Zaire (ICSID Case No. ARB/93/ 1), Award, 21 February 1997, 36 Ilm (1997), p. 1544; ScriaEU>aZ, Ch., op.cit., (supra, footnote 3), p. 7. 64 Ronald S. Lauder was a U.S. citizen who controlled CME Czech Republic B.V. (The Netherlands), a Dutch company which in turn owned CNTS, a Czech company. The Czech Republic originally challenged the Tribunal's jurisdiction on the grounds that Ronald S. Lauder failed to prove ownership or control of an investment in its territory but subsequently admitted «[fJor.iurisdict;onal purpose only [that] the Claimant controlled the investment* [Ronald S. Lauder v. The Czech Republic (Uncitrai. Arbitration), Award, 3 September 2001, pp. 33-34, available at: http://ita.law.uvic.ca/documents/LauderAward.pdf SCHREUER,, Ch., op.cit., (suprn, footnote 3), p. 14]. 6S Convention on the Settlement of Investment Disputes between States and Nationals of Other States (1965), Art. 25(2).

  • ss Convention on the Settlement of Investment Disputes between States and Nationals of Other States (1965), Art. 25(2). s� According to the Report, contrary to subparagraph (a) of Article 25 (2), subparagraph (b), «which deals with juridical persons, is more flexible. A juridical person which had the nationality of a State party to the dispute would be eligible to be a party to proceedings under the auspices of the Centre if that State has agreed to treat it as a national of another Contracting State because of foreign control- [Report of the Executive Directors on the Convention on the Settlement of Investment Disputes between States and Nationals of Other States, IsW 18 March 1965, para. 30; SACERDOT!, G., op.cit., (supra, footnote 2), pp. 302-304]. sg Scnkeuea, Ch., -Access to ICSID Dispute Settlement for Locally Incorporated Companies�>, in: WEISS, F.; DENTER.S, E.; DE WAART, P., International Economic Law wish a Human Face, (The Hague: Kluwer Law International, 1998), pp. 498-500, passim. sy Available at: http://icsid.worldbank.org/ICSID/FrontServlet?actionVal=ModelClauses&reyucstType= Icsii)DocRH. 711 Swiss Confederation Model Agreement on the Reciprocal Promotion and Protection of Investments (1st June 1986), Art. 9(3), reprinted in: Do�zE0. R.; STEVENS M., op.cit., (supra, footnote 22), pp. 226-227. 71 Sc:Ht�uEtt, Ch.H., op.cit., (supra, footnote 28), p. 330. �2 Energy Charter Treaty (1994), Art. 26(7).

  • �3 Holiday Inns and others v. Morocco (ICSID Case No. APB/72/1), in: LALIVE, P., «The First World Bank Arbitration (Holiday Inns v. Morocco). Some Legal Problems», 51 BYIL (1980), p. 141. Cf. SCHREUER, Ch,., op.cit., (suyra, footnote 68), p. 500; John, W. Dr., «Practical Problems Related to Bilateral Investment Treaties in International Arbitration", in: KAUFMANN-KOHLER. G.; STUCKI, B. (ed.), Investment Treaties and Arbitration (Basel: ASA, 2002), p. 55; BERLIN, D., «Les procedures de reglement des differends dans les contrats Nord-Sud», in: CASSAN, H. (ed.) Contrats intemationaux et pays en développement, (Paris: Economica, 1989), p. 83. �5 Amco Asia Corporation, Pan American Development Limited et al. v. The Republic of Indonesia (ICSID Case No. Anti/81/1), Award on Jurisdiction, 25 September 1983, 23 ILM (1984), p. 359. Ibid., pp. 360-361 ; Gf Sc:Ht�euEa, Ch, op.cit., (supra, footnote 68), pp. 500-501; John, W. Dr., op.cit., (supra, footnote 74), p. 55; BERLIN, D., op.rit., (supra, footnote 74), pp. 84-85. 77 Klockner Industrie-Anlangen GmbH, Klockner Beige S.A. et Klockner Handelsmaatschapij c/ Republique unie du Cameroun et Ste camerounaise des engrais (Socnt�te), 111 FDI (Clunet) (1984), pp. 412-413; SCHREUER, Ch., op.cit., (supra, footnote 68), p. 502. 7H Liberian Eastern Timber Corporation (LETCO) v. The Republic of Liberia (IcsID, Case No. Am/83/2), Award, 31 March 1986, 26 ILm(1987), p. 653.

  • 79Ibid., p. 653; ScHREUER. Ch., op.cit., (supra, footnote 68), pp. 502-503. 8� Cf. SCHREUER. Ch.H., op.cit., (supra, footnote 28), pp. 308-309. 11 Vacuum Salt Products Limited v. The Government of the Republic of Ghana (ICSID Case No. ARB/92/1), Decision, 16 February 1994, 9 ICSID Rell.-FII) (1994), pp. 89-92, 99-100. 82 Autopista Concesionada de Venezuela C.A. v. The Bolivarian Republic of Venezuela (Icsil) Case No. ARH/00/5), Decision on Jurisdiction, 27 September 2001,16 ICSID Rev-FILJ (2001), p. 40. 13 Ibid., p. 43. 11 BROCHES, A., «The Convention on the Settlement of Investment Disputes Between States and Nationals of Other States�>, 136 RCAD1 (1972 - n), p. 360.

  • a5 Autopista Concesionada de Venezuela C.A. v. The Bolivarian Republic of Venezuela (Icsm Case No. ARB/00/5), Decision on Jurisdiction. 27 September 2001, 16 ICSID Ret,.-FfLi (2001), pp. 41-42. H6 Convention on the Settlement of Investment Disputes between States and Nationals of Other States (1965), Art. 25(2). H7 KANTOR, M., «Nationality and Control Issues Involving Financing Parties in ICSID Arbitrations>, in: American Arbitration Association (ed.), AuK � the Laiv, (Jurisnet 2002), pp. 392-393. 11 Societe Ouest Africaine des Betons Industriels (SoABi) c/ Senegal (CIRDI Affaire No. Arus/82/1), Decision, 25 Fevier 1988, 117 JDI (Outlet) (1990), p. 192; Scti�uek, Ch.H., op.cit., (siipra, footnote 28), p. 289; Cf KANTOR, M., op.cit., (supra, footnote 87), p. 391. 89 Autopista Concesionada de Venezuela C.A. v. The Bolivarian Republic of Venezuela (ICSID Case No. ARB/00/5), Decision on Jurisdiction, 27 September 2001, 16 ICSID Rev.-FrL� (2001), p. 43. y° Vacuum Salt Products Limited v. The Government of the Republic of Ghana (ICSID Case No. ARB/92/1), Decision, 16 February 1994, 9 IcsiD Rev.-FiLj (1994), pp. 94-95; Cf. SCHREUER, Ch, op.cit., (supra, footnote 68), pp. 509-512. 9t E.,q. American Manufacturing & Trading Inc. v. The Republic of Zaire (ICSID Case No. AHtt/93/1), Award, 21 February 1997, 39 Iut (1997), p. 1544; supra, para. 13. 12 erg. Society Ouest Africaine des Betons Industriels (SOABI) c/ Senegal (CIRIJI Affaire No. Aizn/82/1), Decision, 25 Fevrier 1988, 117 Jm (Clunet) (1990), p. 192; Cf. ScnAEUeR, Ch., op.cit., {supra, footnote 68), pp. 508-509; DELAUME, G.R., «How to Draft an IcsID Arbitration Clause", 7 Icsm Rep,-FILI (1992), pp. 175-178. 93 TSA Spectmm de Argentina S.A. v. The Argentine Republic (Icsil) Case No. ARn/05/5), Award, 19 December 2008, para. 162, available at: http://ita.law.uvic.ca/documents/TSAAwardEng.pdf.

  • 94 SCHREUER, Ch.H., op.cit., (supra, footnote 28), pp. 324-325; Cf. KANTOR, M., up.cit., (supra, footnote 87), pp.391-392. 9S ,Supra, para. 15. ''6 Convention Establishing the Multilateral Investment Guarantee Agency (1985), Art. 13(a). z PROTOPSALTIS, P., «The Multilateral Investment Guarantee Agency", in: WELLENS, K. (ed.), Encyclopaedia of Intergovernmental Organizations, (The Hague: Kluwer Law International, 2005), Suppl. 18, para. 122. 98 MIGA, Operational Regulations (2002), para. 1.17; SHIHATA, I.F.I., MICA and Foreign Investment (Dordrecht: Martinus NijhoffPublishers, 1988), p. 120. v9 RINDLER, H., «The Multilateral Investment Guarantee Agency (MICA): Should Austria Accede?>, 2 ARIEL (1997), p. 81.

  • ioo NAFTA (1993), Part v, Chapter 11, Art. 1101. 101 NAFTA (1993), Part v, Chapter 11, Art. 1139. 102 NAFTA (1993), Part v, Chapter 11, Art. 1139. 103 Waste Management Inc. v. United Mexican States (ICSID Case No. ARB (AF) /00/3), Final Award, 30 April 2004, para. 83, available at: http://naftaclaims.com/Disputes/Mexico/Waste/WasteFinalAwardMerits.pdf. 104 Ibid., para. 85. Ibid., para. 85; Cf ScHm, S.W., op.rit., (stipra, footnote 10), pp. 208-209; S�NC:rnW , A.C., op.cit., (supra, footnote 32), p. 361. 106 Foy, P., «effectiveness ofNAFTA's Chapter Eleven Investor State Arbitration Procedureso, 18 ICSID Ret'.-FIL} (2003), p. 60. 107 S.D. Myers Inc. v. Government of Canada (UNCITRAL Arbitration), Partial Award, 13 November 2000, para. 229, available at: http://www.naftaclaims.com/Disputes/Canada/SDMyers/SDMyers_MeritsAward.pdf.

  • 108 The Attorney General of Canada v. S.D. Myers Inc. and The United Mexican States, Federal Court of Ottawa, Judgement, 13 January 2004, p. 2, available at: http://www.naftaclaims.com/Disputes/Canada/SDMyers/ SDMyers-Canada JRT-F(:TDJudgtncnt.pdf 10<) NAFTA (1993), Part v, Chapter 11, Art. 11 lfi(1). 110 NAFTA (1993), Part v, Chapter 11, Art. 1117(1). 111 Mondev International Ltd. v. United States of America (ICSID Case No. AKU (AF) /99/2), Final Award, 11 October 2002, para. 79, available at: http://www.statc.gov/documents/organization/14442.pdf. 112 NAFTA (1993), Part v, Chapter 11, Art. 1117(4). ILl Mondev International Ltd. v. United States of America (IcsiD Case No. ARU (AF)/99/2), Final Award, 11 October 2002, loc cit., (supra, footnote 111), para. 79. 114 SCHILL, S.W., op.cit., (supra, footnote 10), p. 213. 115 Foy, P., op.cit., (supra, footnote 106), p. 62.

  • "I International Thunderbird Gaming Corporation v. Mexico (UNCITRAL Arbitration), Final Award, 26 January 2006, para. 106, available at: http://ita.law.uvic.ca/documents/ThunderbirdAward.pdf; Cry SC'.HILL, S.W., op.cit., (supra, footnote 10), pp. 311-312. 117 Mondev International Ltd. v. United States of America (lcsii) Case No. ARB (AF) /99/2), Final Award, 11 October 2002, loc cit., (supra, footnote 111), para. 91. 1. "" The Loewen Group Inc. and Raymond L. Loewen v. United States of America (ICSID Case No. ARB (AF)/98/3), Final Award, 26 June 2003, para. 227, available at: http://naftaclaims.com/Disputes/USA/Loewen/ LoewenFinalAward.pdf.

  • 110Ibid., para. 226. 12U Ibid., paras 229-230. 121 Ibid., para. 238. 122 Energy Charter Treaty (1994), Art. 1 (6). 123 WALDE, T.W., international Investment under the 1994 Energy Charter Treaty», in: WALDE, T.W. (ed.), The Energy Charter Treaty: An East-West Gatewayfor Investment Fr Trade, (London: Kluwer Law International, 1996), p. 275. 124 Energy Charter Treaty (1994), Understanding 3, With respect to Article 1(6).

  • 125 Infra, para. 37. izb WALDE, T.W., op.cit., (supra, footnote 123), p. 274. ��� Energy Charter Treaty (1994), Art. 26(7). 128 In this case, Ronald S. Lauder, an American citizen, invoked the U.S.-Czech Republic BIT while subsequently CME, a Dutch company he controlled, invoked the Netherlands-Czech Republic BIT, both seeking arbitration against the Czech Republic. Cf. Sinclair, A.C., op.cit., (supra, footnote 32), p. 361.

  • 129 LEGUM, B., op.cit., (supra, footnote 39), p. 4; Gf SCHILL, S.W., op.cit., (supra, footnote 10), p. 218. "° SCHILL, S.W., op.cit., (supra, footnote 10), p. 237. 131 Supra, paras 11, 13. 132 Cf. SINCLAIFI, A.C., op.cit., (supra, footnote 32), p. 361; Schill, S.W., op.cit., (supra, footnote 10), p. 218. 133 Cf. GUZMAN, A., «Why Lnca Sign Treaties That Hurt Them: Explaining the Popularity of Bilateral Investment Treaties», 38 va. J. Int'l L. (1997), p. 670. 134 Begum, B., op.cit., (supra, footnote 39), p. 5; Cf SCHILL, S.W., op.cit., (supra, footnote 10), pp. 235-236. 135 LEGUM, B., op.cit., (supra, footnote 39), p. 5. 136 Aguas de Tunari S.A. v. The Republic ofBolivia (ICSID Case No. ARB/02/03), Decision on Jurisdiction, 21 October 2005, loc.cit., (supra, footnote 50), para. 330. 137 Ibid., para. 332.

  • 13" SCHILL, S.W., op.cit., (supra, footnote 10), pp. 213-217. ' w Cf Impregilo S.p.A. v. The Islamic Republic of Pakistan (ICSID Case No. ARB/03/3), Decision on Jurisdiction, 22 April 2005, paras 170, 184, available at: http://ita.law.uvic.ca/documents/impregilo-decision.pdf. '°° Saluka Investments B.V. (The Netherlands) v. The Czech Republic (UNCITRAL Arbitration), Partial Award, 17 March, 2006, para. 240, available at: http://ita.law.uvic.ca/documents/Saluka-PartialawardFinal.pdf. 141 Franz Sedelmayer v. The Russian Federation (Arbitration Institute of the Stockholm Chamber of Commerce), Award, 1 July 1998, Dissenting opinion, loc.cit., (supra, footnote 57), p. 4. 142 Tokios Tokclcs v. Ukraine (IcsiD Case No. Art/02/18), Decision on Jurisdiction, 29 April 2004, loc.cit., (supra, footnote 33), para. 54, citing Barcelona Traction Light & Power Company Limited (Belgium v. Spain), (second phase), Judgment of 5 February 1970, Ici Rep. 1970, p. 39; Cf. SCHILL, S.W., op.cit., (supra, footnote 10), p. 231. '4; BITS do not create an obligation of the contracting parties to invest and their contribution to the flow of FW remains untested. Therefore, BITS concluded between capital-exporting and capital-importing countries were critisised for limiting the national sovereignty of the second in return for the hope to receive capital from the first by way of FDI [SOR.NARAJAH, M., The International Law on Foreign Investment, (Grotius Publications, Cambridge University Press, 1994), p. 228].

  • 144 Limited Liability Company AMTO v. Ukraine (Arbitration Institute of the Stockholm Chamber of Commerce Arb. No. 080/2005), Final Award, 26 March 2008, p. 40, available at: http://ita.law.uvic.ca/documents/ AmtoAward.pdf I4S Ibid., p. 43. ��� Cf. WALDE, T.W, op.cit., (supra, footnote 123), p. 275. 147 PETERS, P., op.cit., (supra, footnote 2), p. 37; Cf. YANNACA-SMALL, C., oy.cit., (supra, footnote 23), p. 28. 148 Kingdom of Thailand-U.S. Treaty of Amity and Economic Relations (1966), Art. xn(1)(�; Agreement between the U.S. and Belgium regarding Friendship, Establishment and Navigation (1961), Art. 16(g); Treaty of Friendship, Commerce and Navigation between the United States of America and the Federal Republic of Germany (1954), Art. Yxiv.

  • 149 U.S.-Kingdom of Morocco (1985), Art. 1(3), in fine, reprinted in: DOLZER, R.; STEVENS, M., op.cit., (supra, footnote 22), p. 42; available also at: http://www.unctad.org/sections/dite/iia/docs/bits/us_morocco.pdf; Cf. U.S.-Panama (1982), Art. i(c), available at: http://www.unctad.org/sections/dite/iia/docs/bits/us�anama_ 1982.pdfl. 150 U.S.-Turkey (1985), Art. 1(2), available at: http://www.unctad.org/sections/dite/iia/docs/bits/us- turkey.pdf. 151 Supra, para. 3. 152 Barcelona Traction Light & Power Company Limited (Belgium v. Spain), (second phase), Judgement of 5 February 1970, Icj Rep. 1970, p. 41. 153 WHITE, G., Nationalisation of Foreign Property, (London: Stevens & Sons Ltd, 1961), p. 69, referring to Mervyn Jones in 26 BYIL (1949), p. 225. 154 Plama Consortium Limited v. The Republic of Bulgaria (ICSID Case No. ARB/03/24), Decision on Jurisdiction, 8 February 2005, para. 149, available at: http://ita.law.uvic.ca/documents/plamavbulgaria.pdf Cf. Infra, para. 39.

  • 155 U.S.-Argentine Republic (1991), Art. 1(2), available at: http://www.unctad.org/sections/dite/iia/docs/ bits/argentina_us.pdf. lsb U.S. Model Agreement Concerning the Encouragement and Reciprocal Protection of Investment (February 1992), Art. 1(2), reprinted in: DOLZER. R.; STEVENS, M., op.cit., (supra, footnote 22), p. 241; U.S.-l3ulgaria (1992), Art. 1(2), available at: http://www.unctad.org/sections/dite/iia/docs/bits/us_bulgaria.pdf; U.S.-Republic of Kyrgyzstan (1993), Art. 1(2), available at: http://www.unctad.org/sections/dite/iia/docs/bits/ us_kyrgyzstan.pdf; U.S.-Republic ofEcuador (1993), Art. 1(2), available at: http://www.unctad.org/sections/dite/ iia/docs/bits/us_ecuador.pdf; U.S.-Ukraine (1994) Art. j(2), reprinted in: Tokios Tokeles v. Ukraine (Icsn) Case No. Aitts/02/18), Decision on Jurisdiction, 29 April 2004, loc.cit., [supra, footnote 33), para. 34; U.S.-Romania (1994), Art. 1(2), available at: http://www.unctad.org/sections/dite/iia/docs/bits/us_romania.pdf U.S.-Kingdom of Morocco (1985), Art. 1(2), available at: http://www.uuctad.org/sections/dite/iia/docs/bits/us_morocco.pdf. 157 U.S. Department of State "Letter of Submittal" to the President, September 7, 1994, reprinted in: Generation Ukraine Inc. v. Ukraine (ICSID Case No. ARD/OO/99), Award, 16 September 2003, para. 15.5, available at: www.asil.org/ilm/ukraine.pdf.

  • 151 U.S. Model Agreement Concerning the Encouragement and Reciprocal Protection of Investment (2004), loc.cit., (supra, footnote 60), Art. 18. IS9 Cf TSA Spectrum de Argentina S.A. v. The Argentine Republic (IcsiD Case No. APB/05/5), Award, 19 December 2008, loc.cit., (supra, footnote 93), para. 162; Supra, para. 19. �6° Austria-Armenia (2002), Art. 10, available at: http://www.unctad.org/sections/dite/iia/docs/bits/austria_ armenia.pdf Austria-Bosnia and Herzegovina (2001), Art. 10, available at: http://www.unctad.org/sections/dite/ iia/docs/bits/austria bosnia.pdf Austria-Lebanese Republic (2001), Art. 10, available at: http://www.unctad.org/ sections/ditc/iia/docs/bits/austria_lebanon.pdf Austria-Hashemite Kingdom of Jordan (undated), Art. 10, available at: http://www.unctad.org/sections/dite/iia/docs/bits/austria_jordan. pdf; Austria-Great Socialist People's Libyan Arab Jamahiriya (2002), Art. 10, available at: http://www.unctad.org/sections/dite/iia/docs/bits/ austria_libya.pdf Cf YANNACA-SMALL, C., op.cit., (supra, footnote 23), p. 28. 161 Sweden-Bulgaria (1994), Art. 1.1(c), in /inc, available at: http://www.unctad.org/sections/dite/iia/docs/ bits/bulgaria sweden.pdf Cf. PETERS, P., oy.cit., (supra, footnote 2), p. 35. Supra, para. 34.

  • �6j Generation Ukraine Inc. v. Ukraine (IcsID Case No. ARB/00/9), Award, 16 September 2003, para. 15.7, available at: http://ita.law.uvic.ca/docurnents/GenerationUkraine OOO.pdf. 1M Ibid., para. 15.7. 165 Ibid. �fi� NAFTA (1993), Art. 1113(2). 167 Energy Charter Treaty (1994), Art. 17(1). 16H " Cy YANNACA-SMALL, C., op.cit., (supra, footnote 23), p. 31. lbv Report by the Chairman to the Negotiating Group [DAFFE/MA;(98)17j, 4 May 1998, Annex 2 (Definition, Scope and Application), Art. 6, available at: http://wwwl.oecd.org/daf/mai/pdf/ng/ng9817e.pdf Cf. YANNACA-SMALL, C., op.cit., (supra, footnote 23), p. 29, footnote 72.

  • i'o Plama Consortium Limited v. The Republic of Bulgaria (ICSID Case No. ARH/03/24), Decision on Jurisdiction, 8 February 2005, loc.cit., (supra, footnote 154), para. 147. lbid., para. 148. 172 Ibid. 173 Ibid., para. 149.

  • "4 Ibid., para. 150. �'S Limited Liability Company AMTO v. Ukraine (Arbitration Institute of the Stockholm Chamber of Commerce Arb. No. 080/2005), Final award, 26 March 2008, loc.cit., (supra, footnote 144), p. 39. 176 Plama Consortium Limited v. The Republic of Bulgaria (ICSID Case No. ARB/03/24), Decision on Jurisdiction, 8 February 2005, loc.cit., (supra, footnote 154), para. 155. 177 Ibid., para. 157. 178 Ibid., para. 158.

  • Ibid., para. 159. 1HO Ibid. 181 Ibid., para. 161. 182 Ibid. 183 Ibid. 1H4 Ibid., para. 162. 185 Ibid.

  • 186 petrobart Limited v. The Kyrgyz Republic (Arbitration Institute of the Stockholm Chamber of Commerce Arb. No. 126/2003), Award, 29 March 2005, p. 58, available at: http://ita.law.uvic.ca/documcnts/petrobart- kyrgyz.pdf. 187 Ibid., p. 59. 188 Limited Liability Company AMTO v. Ukraine (Arbitration Institute of the Stockholm Chamber of Commerce Arb. No. 080/2005), Final award, 26 March 2008, loc.cit., (supra, footnote 144), p. 39. 119 Ibid., pp. 39-40. 190 Ibid., p. 38.

  • Yukos Universal Limited (Isle of Man) v. The Russian Federation (UNCITRAL Arbitration), Interim Award on Jurisdiction and Admissibility, 30 November 2009, para. 456, available at: http://ita.law.uvic.ca/documents/ YULvRussianFederation-InterimAward-30Nov2009.pdf. 192 Ibid., para. 458. 193 Ibid., paras 459, 461. �9t Placna Consortium Limited v. The Republic of Bulgaria (Icsm Case No. A?-B/03/24), Decision on Jurisdiction, 8 February 2005, loc.cit., (supra, footnote 154), para. 143; Plama Consortium Limited v. The Republic of Bulgaria (ICSID Case No. ARB/03/24), Award, 27 August 2008, para. 80, available at: http://ita.law.uvic.ca/ documents/PlamaBulgariaAward.pdf. Plama Consortium Limited v. The Republic of Bulgaria (ICSID Case No. ARB/03/24), Decision on Jurisdiction, 8 February 2005, loc.cit., (supra, footnote 154), para. 170. 196 Ibid., para. 168. 197 Ibid., para. 169.

  • 198 Petrobart Limited v. The Kyrgyz Republic (Arbitration Institute of the Stockholm Chamber of Commerce Arb. No. 126/2003), Award, 29 March 2005, lac.cit., (supra, footnote 186), pp. 58-59. lyy Limited Liability Company AMTO v. Ukraine (Arbitration Institute of the Stockholm Chamber of Commerce Arb. No. 080/2005), Final award, 26 March 2008, loc.cit., (supra, footnote 144), p. 40. zon Ibid., p. 43. 201 Yukos Universal Limited (Isle of Man) v. The Russian Federation (UNCITRAL Arbitration), Interim Award on Jurisdiction and Admissibility, 30 November 2009, loc.cit., (supra, footnote 191), para. 460. z°z Ibid.., para. 537.

  • 203Ibid., paras 544-546. zo^ Plama Consortium Limited v. The Republic of Bulgaria (ICSID Case No. ARB/03/24), Decision on Jurisdiction, 8 February 2005, loc.cit., (supra, footnote 154), para. 58. zo> Plama Consortium Limited v. The Republic of Bulgaria (ICSID Case No. ARB/03/24), Award, 27 August 2008, loc.cit., (supra, footnote 194), para. 94. 206 Petrobart Limited v. The Kyrgyz Republic (Arbitration Institute of the Stockholm Chamber of Commerce Arb. No. 126/2003), Award, 29 March 2005, loc.cit., (supra, footnote 186), p. 58. 207 Ibid. 20H Limited Liability Company AMTO v. Ukraine (Arbitration Institute of the Stockholm Chamber of Commerce Arb. No. 080/2005), Final award, 26 March 2008, loc.cit., (supra, footnote 144), p. 39. 209 Ibid., p. 40. 210 Energy Charter Treaty (1994), Understanding 3, With respect to Article 1(6); Supra, para. 25.

  • 211 Limited Liability Company At�rro v. Ukraine (Arbitration Institute of the Stockholm Chamber of Commerce Arb. No. 080/2005), Final award, 26 March 2008, loc.cit., (supra, footnote 144), p. 40. 212 Ibid., p. 41. 213 Ibid., p. 41. 214 Ibid., pp. 40, 43; Supra, para. 29; Cf. Sinclair, A.C., op.cit., (supra, footnote 32), p. 367.

  • 215 gt�cLpIR, A.C., op.cit., (supra, footnote 32), p. 385 216 Ibid., p. 386.

  • 217 SoRNA7iA�AH, M, op.cit., (supra, footnote 143), p. 248; Cf. DoLZER, R.; STEVENS, M., op.cit., (supra, footnote 22), p. 36.

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