I. Introduction
Today’s world is more interconnected than ever before in terms of international trade and investment with cross border capital flows. Consequently, a regime for the development and protection of cross border investments has developed globally. Over the past decade, there has been significant proliferation of international investment agreements (IIAs) on bilateral,01Bilateral investment treaties are hereinafter referred to as BITs. regional, and interregional levels that regulate the rights and obligations of investors and host States. IIAs, which protect foreign investors and permit them to bring disputes before an independent and impartial arbitral tribunal, serve to advance the investment climate in a State.02Berk Demirkol, Yatirim Tahkiminde Paravan Sirketlerin Actigi Yetki Sorunlari [Jurisdictional Issues Concerning Pseudonational Companies in Investment Arbitration],
Despite the proliferation of IIAs and promotion of investment protection mechanisms by many States with the hopes of attracting foreign investment, there is no uniform treaty adopted worldwide concerning investment law that ensures a level playing field.03Jan Primec, Enemy of the State: Is Treaty Shopping in Contradiction with the Rationale of Investment Law? 3 (2015) (unpublished master thesis, University of Amsterdam) (on file with the Digital Academic Repository, University of Amsterdam). For an investor to enjoy the rights and benefits offered by a certain IIA and bring claims before an arbitral tribunal based on the treaty, the investor must be a national of a State party to that IIA. Coupled with the uneven treatment of investors under different IIAs, this nationality requirement has fueled the practice of “treaty shopping,” where investors structure their investments in order to obtain the most favorable treatment and have legal standing before arbitral tribunals. To this end, investors can form a company in a State party to an IIA of their choosing and use it as a vehicle for investment, despite not having significant assets or operations in that State.04Demirkol, supra note 2, at 302. Likewise, a national, domestic investor that would not otherwise benefit from the rights of foreign investors may form a company in a foreign State party to an IIA with its home country as a vehicle to be able to bring claims against its State.05See Tokios Tokeles v. Ukraine, ICSID Case No ARB/02/18, Award, ¶¶ 38-40 (Jul. 26, 2007), 20 ICSID Rev-FILJ 205 Alternatively, a national investor may transfer its ownership rights to a foreigner who is entitled to bring claims against the State in order to enjoy foreign investment protections as a local.06See generally Banro v. DR Congo, ICSID Case No. ARB/98/7, Award, (Sep. 1, 2000).
One could argue that this treaty shopping practice liberalizes investment law, contributes to the leveling of the playing field for investors, and is ultimately in line with the core rationale of investment law.07Primec, supra note 3, at 41. Although this argument has its merits, treaty shopping also has negative consequences for host States, which in certain instances clearly outweigh its positive contributions to the international investment law system. Treaty shopping is alarmingly vulnerable to bad faith manipulation by investors and leads to the violation of the principle of reciprocity, internationalization of domestic investments, abuse of rights, aggravation of the governance gap, and generally an illegitimate manipulation of the investment protection system.08Id. at 34-39; Efe Uzazi Azaino, Nationality/Treaty Shopping: Can Host Countries Sift the Wheat from the Chaff?,
II. Definition of Investor
The definition of investor in an IIA requires a real or legal person to be a national of a State party. This definition is one of the key elements in determining whether a person will enjoy the rights and protections derived from the investment agreement, and whether a treaty-based arbitral tribunal would assume jurisdiction in the event of a dispute.12
In public international law, the practice related question of nationality has mostly developed in the context of diplomatic protection.14OECD,
a. Place of Incorporation
Place of incorporation is the most prevalent corporate nationality theory,17Id. as many investment law treaties18 See, e.g., North American Free Trade Agreement, U.S.-Can.-Mex., Dec. 17, 1992, 32 I.L.M. 289 (1993); United States Central American Free Trade Agreement-Dominican Republic, May 28, 2004; Energy Charter Treaty, Dec. 17, 1994, 2080 U.N.T.S. 95; Treaty Between the Government of the United States of America and the Government of the Republic of Rwanda Concerning the Encouragement and Reciprocal Protection of Investment, U.S.-Rwanda, Feb. 19, 2008. and tribunals19See generally Case Concerning the Barcelona Traction, Light and Power Company, Limited (Belgium v. Spain), 1964 I.C.J. 6 (July 24); Tokios Tokeles v. Ukraine, ICSID Case No ARB/02/18, Award, (Jul. 26, 2007), 20 ICSID
b. Seat of Corporation
Some States, possibly with the intention of preventing treaty shopping through corporate nationality planning, have adopted the seat of corporation theory. This theory states that a legal entity must have its seat and/or effective management in the State where it is incorporated in order to qualify as an investor in that State.23Id. The seat of corporation theory, which is more commonly applied by civil law countries,24Id.. See also Agreement between the People’s Republic of China and the Federal Republic of Germany on the Encouragement and Reciprocal Protection of Investments, (China-Ger.), Dec. 1, 2003, 2362 U.N.T.S. 253; L’accord entre le Gouvernement de la Republique francaise et le Gouvernement de la Republique de Singapour sur “encouragement et la protection des investissements, ensemble trois echanges de lettres (France-Singapore Bilateral Investment Treaty), (Sing.-Fr.), Sep. 8, 1975; Accordo tra la Repubblica italiana e la Grande Jamahiriya araba libica popolare socialista sulla promozione e protezione degli investimenti (Italy-Libya Bilateral Investment Treaty), (It.-Libya), Dec. 13, 2000. uses the place of effective management to determine corporate nationality and thus requires a more genuine link between the legal entity and the host country than the place of incorporation theory.25Waibel, supra note 13, at 7. Although it is not as straightforward as the place of incorporation analysis, this theory still allows a simple analysis while discouraging corporate nationality structuring for treaty shopping purposes.
c. Control
Another method to determine corporate nationality is the control test, which evaluates the nationality of the entity or the legal person who exercises direct or indirect control over the investment vehicle.26Id. at 8 Although this test looks for a genuine link between the investor and the host State, it is also a very complex test, as it is often difficult to identify the shareholders that exercise control among complicated holding structures and multiple layers of owners.
d. Combined Factors
Some States use all three criteria mentioned above together or combine them with other factors to determine corporate nationality.27OECD, supra note 14, at 25. Taking into account the combination of certain criteria to define an investor narrows the scope of the treaty to legal entities that have genuine or continuous links to the host country.28Waibel, supra note 13, at 8. Therefore, the combined factors test is arguably the most effective definition method in discouraging treaty shopping practices. However, this approach is also possibly the most difficult one to implement due to its complexity.
III. Approach of Arbitral Tribunals to Treaty Shopping
a. Permissive Approach
i. Tokios Tokeles v. Ukraine
Tokios Tokeles v. Ukraine29Tokios Tokeles v. Ukraine, ICSID Case No. ARB/02/18, Decision on Jurisdiction, ¶ 38 (2004). is one of the first cases that discusses treaty shopping through “pseudo-national” companies in the context of BITs.30Demirkol, supra note 2, at 11. Tokios Tokeles was a company incorporated in Lithuania, although 99% of its capital was held by Ukrainian nationals. The company was not a “shell company” in the traditional sense, as it conducted business activities in Lithuania; instead, jurisdiction was challenged based on the nationality of the shareholders.31Tokios Tokeles v. Ukraine, supra note 29, at ¶¶ 1-6. Ukraine claimed that the tribunal did not have jurisdiction ratione personae because the claimant was trying to use the BIT to bring a claim against the home State, which is against the international character of BITs and ICSID Convention.32Id. at ¶ 22. Consequently, this case demonstrates the use of corporate nationality planning to possibly internationalize a domestic dispute.
The majority of the arbitral tribunal accepted a strict interpretation of the BIT, adopting the place of incorporation test and concluding that the company qualified as an investor.33Id. at ¶71. As a result, the tribunal decided in favor of the investor regarding jurisdiction. The tribunal held that the company fulfilled the incorporation criteria and stated “if the parties omitted to include stricter tests for the corporate nationality, it is not for the tribunal to make such interpretation of the BIT,”34Id. at ¶ 40. thus rejecting the application of the control test. The tribunal also asserted that the conduct of the company with respect to its status as an entity of Lithuania did not constitute an abuse of legal personality and that the company was not established for the purpose of gaining access to ICSID arbitration.35This conclusion was supported by the fact that the company was established six years before the entry into force of the Ukraine-Lithuania BIT. Therefore, the tribunal avoided piercing the corporate veil36Piercing the corporate veil is a doctrine that allows courts to treat the rights and obligations of a company as rights and obligations of its shareholders. as well.37Tokios Tokeles v. Ukraine, supra note 29, at ¶ 66. In his dissenting opinion, however, the Chairman of the Tokios Tokeles tribunal Prosper Weil rejected this approach and instead focused on the object and purpose of the ICSID Convention. He stated that the purpose was “to give effect to the genuinely international character of an apparently national investment.”38Tokios Tokeles v. Ukraine, ICSID Case No. ARB/02/18, Dissenting Opinion of Prosper Weil, ¶ 23 (2004). Therefore, he concluded that economic reality and source of capital should prevail over formal legal structure when determining the nationality of corporate investors.39Id. at ¶ 26.
ii. Saluka Investment BV v. Czech Republic
The claimant in Saluka Investment BV v. Czech Republic40Saluka Investments B.V. v. Czech Republic, Partial Award, (Perm. Ct. Arb. 2006). was a shell company incorporated in the Netherlands and wholly owned by the Japanese corporation Nomura Group. The Czech Republic argued that the company could not be deemed an investor since it was a shell company. The arbitral tribunal responded to the claim by asserting that this argument evaluated the notion of investment very economically and that the tribunal was bound by the language in the BIT.41Id. at ¶ 211 Consequently, like in Tokios Tokeles, the tribunal adhered to the strict interpretation of the BIT language and concluded that the company was indeed an investor within the ambit of the BIT.42Id. at ¶ 222 et seq.
iii. ADC v. Hungary
ADC v. Hungary43ADC Affiliate Ltd. and ADC & ADMC Management Ltd. v The Republic of Hungary, ICSID Case No. ARB/03/16, Award (2006). concerns two claimants that are both incorporated in Southern Cyprus but controlled by Canadian companies.44Note that at the time of dispute, Canada was not a party to the ICSID Convention, under which the case was brought. The claimants were incorporated in Southern Cyprus for tax purposes after the bid process in Hungary but prior to the performance of their duties under the tender.45ADC v. Hungary, at ¶ 132. In its ruling, the arbitral tribunal pointed out the fact that when the BIT was ratified, it was already known that these companies would benefit from the BIT, which adopted the place of incorporation criterion.46Id. For this reason, the tribunal rejected the claims regarding the source of capital, control test, piercing the corporate veil, and a genuine link as it held that the companies were deemed as the nationals of a member State within the scope of ICSID Convention.47Id. at ¶¶ 357-362.
iv. Rompetrol v. Romania
Rompetrol Group v. Romania48The Rompetrol Group N.V. v. Romania, ICSID Case No. ARB/06/3, Decision on Respondent’s Preliminary Objections on Jurisdiction and Admissibility (2008) involved a jurisdictional dispute similar to that of Tokios Tokeles regarding corporate nationality planning. Rompetrol Group N.V. was a company established in the Netherlands, but was wholly owned by a Swiss company (Rompetrol Holding) which itself was owned by a Romanian national and held shares in numerous Romanian companies.49Id. at ¶ 44. The respondent argued that Rompetrol Group N.V. did not qualify as a foreign investor and was merely a shell company. In support of this argument, the respondent relied on Professor Weil’s50The President of the Arbitral Tribunal of Tokios Tokeles v.Ukraine. dissenting opinion in Tokios Tokeles51See supra, note 29. and stated that allowing local investors to bring claims through the device of shell companies would “be a radical change from established international law and have a wide impact on the network of BITs.”52Rompetrol v. Romania, supra note 48, at ¶ 52.
The respondent’s reliance on the Nottebohm case is also noteworthy.53See supra, note 13. Through reference to the Nottebohm case, the respondent argued that there is an exception to applying the formal test of where a legal person is “constituted under the law” when it can be shown that the real and effective nationality of the legal entity in question is that of the Respondent State.54Rompetrol v. Romania, supra note 48, at ¶ 54. In the Nottenbohm Case, the International Court of Justice held that the acquired nationality of a natural person whose real and effective links are with the Respondent State is not opposable to that State. Romania argued that, similarly, a foreign nationality asserted by a corporation that is owned and controlled by a Romanian citizen and has its real seat in Romania should not be opposable to Romania. Accordingly, the respondent claimed that a foreign nationality asserted by a corporation owned and controlled by a Romanian citizen that has its real seat in Romania should not be able to bring claims against Romania.55Id. at ¶ 54. However, the tribunal rejected these arguments and strictly adhered to the language in the BIT, which adopted the place of incorporation test. It also added that Professor Weil’s approach was not widely approved and it could not be reconciled with Article 31 of the Vienna Convention on the Law of Treaties, which deems “ordinary meaning given to the terms of the treaty” as the primary element of interpretation.56Id. at ¶ 85. Along similar lines, the tribunal stated that the definition of national status given in the Netherlands-Romanian BIT was conclusive for the purpose of establishing its jurisdiction and ruled in favor of the claimant regarding the jurisdictional argument.57Id. at ¶ 110.
b. Prohibiting Approach
i. Phoenix Action LTD v. Czech Republic
Phoenix Action LTD v. Czech Republic58Phoenix Action, Ltd. v. The Czech Republic, ICSID Case No. ARB/06/5, Award (2009). concerned a claim brought under the Israel-Czech Republic BIT two months after two Czech companies had been acquired by Phoenix Action LTD, an Israeli company owned by Czech national Vladimir Beno. The respondent argued that the tribunal lacked ratione temporis and ratione materiae; since the acts alleged by the claimant occurred before Phoenix acquired the companies, there was no investment within the meaning of Article 25 of the ICSID Convention and Articles 1 and 7 of the Israel-Czech BIT.59Id. at ¶ 38. The respondent also asserted that the claims should be dismissed due to abuse of process because the claimant was “nothing more than an ex post facto creation of a sham Israeli entity created by a Czech fugitive from justice, Vladimir Beno, to create diversity of nationality.”60Id. at ¶ 34.
The arbitral tribunal ruled in favor of the respondent and disqualified the claim by concluding that Phoenix’s purchase of the two Czech companies was solely a pretext for exploiting the Israel-Czech Republic Treaty. The tribunal’s decision had ripple effects in international investment arbitration circles, especially for its analysis of what constitutes an investment under the ICSID Convention. As the tribunal weighed in on the concept of investment under the ICSID Convention, it defined the term by adding two new elements to the Salini test for the existence of an investment.61Salini Costruttori SpA and Italstrade SpA v. Kingdom of Morocco, ICSID Case No. ARB/00/4, Decision on Jurisdiction, ¶¶ 50-58 (Jul. 23, 2001), 42 ILM 609 (2003). The Salini test requires four elements for the existence of an investment: contribution of money or other assets of economic value, certain duration, an element of risk, and a contribution to the development of the host State.62Id. at ¶ 52.
In Phoenix, the tribunal used the Salini test as a starting point and considered two additional criteria: (i) whether the assets were invested in accordance with the laws of the host State and (ii) whether there was a bona fide investment of those assets.63Phoenix Action, Ltd. v. The Czech Republic, ICSID Case No. ARB/06/5, Award, ¶¶ 101-13 (2009). The Tribunal laid down four factors to determine if there is a bona fide investment: (i) timing of the investment, (ii) timing of the claim, (iii) substance of the transaction, and (iv) the true nature of the operation.64Id. at ¶¶ 135-44. Ultimately, the tribunal labeled the claimant’s conduct an “abusive manipulation of the system of international investment protection”65Id. at ¶ 143. that went against the purpose of the ICSID Convention and the BITs, and concluded that the claim failed the bona fide investment requirement.
ii. Banro American Resources v. Democratic Republic of Congo
The Banro66Banro American Resources, Inc. and Societe Aurifere du Kivu et du Maniema S.A.R.L. v. DR Congo, ICSID Case No. ARB/98/7, Award (2000). tribunal reached a similar conclusion to Phoenix. Banro involved a Canadian company as the claimant, which transferred its investment to its U.S. affiliate in order to gain access to ICSID arbitration. Like Phoenix, the timing of the investment and claim raised suspicions, as the U.S. investor initiated the arbitration proceedings only two days after the transfer. Relying on the nemo plus iuris transfere potest quam ipse habet principle,67“No one can transfer more rights (to another) than he himself has.” the tribunal concluded that Banro American could not benefit from the consent of its parent Canadian corporation, since Canada was not party to the ICSID Convention at the time and thus could not transfer any valid consent to ICSID arbitration to its U.S. subsidiary. Therefore, the tribunal held that the “right of access to ICSID cannot be viewed as having been ‘extended’ or ‘transferred’ to its affiliate, Banro America,” since such a right had never existed for the benefit of the Canadian parent company.68Banro American, supra note 66, at ¶ 5.
iii. Société Générale v. The Dominican Republic
The Société Générale69Société Générale In re DR Energy Holdings Limited and Empresa Distribuidora de Electricidad del Este, S.A. v. The Dominican Republic, LCIA Case No. UN 7927, Award on Preliminary Objections to Jurisdiction, (2008), http://www.italaw.com/sites/default/files/case-documents/ita0798.pdf tribunal acknowledged transfer of investments as an ordinary feature of the global economy and asserted that, unlike Banro, the case did not involve an arbitration strategy. On the other hand, it required the claimant to have the nationality of the relevant contracting party at the time of the breach unless the applicable BIT expressed a different rule.70Id. at ¶ 109. Furthermore, the tribunal required the transaction to be a bona fide transaction and “not devised to allow a national of a State not qualifying for protection under a treaty to obtain an inappropriate jurisdictional advantage otherwise unavailable by its rights after-the-fact to a qualifying national, as occurred in Mihaly and Banro.”71Id. at ¶ 110.
iv. Cementownia “Nova Huta” S.A. v. Republic of Turkey
The Cementownia case72Cementownia ‘Nowa Huta’ S.A. v. Republic of Turkey, ICSID Case No. ARB(AF)/06/2, Award (2009). is a good example of bad faith abuse of arbitration through treaty shopping. The case concerned two electricity companies, CEAS and KEPEZ, operated by the Uzan family. The Uzan family is a very controversial business family in Turkey that is involved in various fraud cases in Turkey and the U.S.73The Uzan family was indicted for racketeering and was allegedly involved in a multi-billion dollar bank fraud in Turkey, resulting in the seizure of 219 companies held by them by the Turkish government. They also defrauded Motorola and Nokia. The family was granted political asylum by the French government where they currently reside. For more information on the alleged fraudulent conduct of the family. See Turkey Seizes 219 Companies of Uzan Family,
Upon evaluating the claims and noting the conflicting conduct of the claimant – such as the inconsistent evidence regarding the timing of the acquisition and the fact that the acquisition was not recorded in financial statements – the tribunal concluded that the claimant could not produce sufficient evidence of its status as an investor and that it “intentionally and in bad faith abused the arbitration; it purported to be an investor when it knew this was not the case.”77Id. at ¶ 159. Most importantly, the tribunal assessed whether Cementownia’s conduct would have constituted an illegitimate treaty shopping practice even if the claimant could prove that it had acquired interests before the termination. The tribunal concluded that Cementownia’s claims were against the good faith principle and manifestly ill-founded.78Id. at ¶¶ 156-57.
v. Libananco Holdings Co. Limited v. Republic of Turkey
The Libananco case79Libananco Holdings Co. Limited v. Republic of Turkey, ICSID Case No. ARB/06/8, Award (2011). concerns claims brought by Cypriot company Libananco, owned by the Turkish Uzan family, against the Republic of Turkey with respect to various alleged breaches of the Energy Charter Treaty, to which Cyprus and Turkey are both parties. The Libananco case involves the same two electricity companies CEAS and KEPEZ as in Cementownia. In this instance, however, the claims were concerning the seizure of these two companies by the Turkish government as well as the termination of the concession agreements.80Demirkol, supra note 2, at 35. Turkey argued that (i) Libananco could not prove that it owned shares before the seizure of the companies.81Cementownia, supra note 72, at ¶ 104. (ii) there was no investment within the meaning of Article 25 of the ICSID Convention,82Id. (iii) Libananco’s claims did not satisfy express conditions of Turkey’s consent to arbitration mainly because it withheld consent to arbitrate issues that had already been litigated in its national courts,83Id. and (iv) Libananco did not qualify as an investor within the meaning of the ICSID Convention and ECT because “it is the alter ego of various Turkish nationals,” and requested the corporate veil to be pierced.84Id. As Libananco could not produce the relevant share certificates, the arbitral tribunal concluded that Libananco failed to prove ownership of shares in the two companies and therefore there was no investment in the case.85Id. at ¶ 537. As a result of this decision, the tribunal unfortunately did not delve into a detailed discussion about how the fact that the claimant was a shell company could have an impact on the tribunal’s jurisdiction.86Demirkol, supra note 2, at 37.
c. General Direction of the Treatment of Treaty Shopping by Arbitral Tribunals
In light of the above overview of arbitral tribunals’ inconsistent practice regarding treaty shopping through shell companies and corporate restructuring, it could be concluded that there is not a universal rule prohibiting corporate nationality planning for purposes of treaty shopping. Bearing this in mind, investors would likely continue their treaty shopping practices to achieve maximum protection of their investments.87Primec, supra note 3, at 26. On the other hand, arbitral tribunals share certain tendencies and demonstrate some discomfort regarding treaty shopping; but, they ultimately find themselves bound to the language of IIAs.88Van Os & Knottnerus, supra note 41, at 37.
Despite the lack of uniformity in practice, the different outcomes in treaty shopping related cases can be traced back mainly to the timing of the restructuring or transfer of assets. Although treaty shopping is not prohibited per se, the lawfulness of treaty shopping practice depends on the timing of the restructuring and the nature of intent behind it.89Primec, supra note 3, at 26. Cementownia v. Turkey is an exemplary case demonstrating the general approach of tribunals regarding the jurisdictional issues raised by shell companies: the Cementownia tribunal made an important distinction among shell companies and asserted that shell companies can bring claims if their establishment is based on legitimate economic reasons planned within the scope of investment.90Demirkol, supra note 2, at 18. A similar approach was taken by the Phoenix court, which found lack of jurisdiction when a shell company was formed after a dispute arose in order to gain access to ICSID arbitration. In finding so, both tribunals referred to the Tokios Tokeles tribunal and supported its decision. The shared reasoning of these three decisions, as well as the Saluka, Rompetrol, and ADC awards, is that treaty shopping is not prohibited per se and investors can enjoy treaty shopping as long as they abide by the good faith principle. This leads to the conclusion that although treaty shopping can be frowned upon, it is generally seen as a fact of international business life. Accordingly, while “back end” treaty shopping when a dispute is already in motion is mostly condemned, front end treaty shopping is viewed as acceptable.91Paul Michael Blyschak, Access and advantage expanded: Mobil Corporation v Venezuela and other recent arbitration awards on treaty shopping, 4(1) J WORLD ENERGY L. B. 32, 35 (2011). Although a common rule on treaty shopping is not established yet, the current direction of practice seems to allow treaty shopping except when it constitutes outright abuse of rights and bad faith.
IV. Issues Raised by Treaty Shopping Through Corporate Nationality
a. Reciprocity
One of the most fundamental issues raised by the practice of treaty shopping is the violation of the principle of reciprocity. IIAs establish the rights and obligations of the contracting parties in a reciprocal manner.92
The reciprocity principle is also breached in the case of the internationalization of a domestic dispute.95Id. Local investors may benefit from investment protection offered only to foreign investors by creating companies that are legally of a contracting State but financially of the host State.96Azaino, supra note 8, at 11. Consequently, local investors may invoke arbitration claims under BITs against their home country.
As stated in the ICSID Convention Commentary, ICSID “is designed to facilitate the settlement of investment disputes between States and nationals of other States. It is not meant for disputes between States and their own nationals,”97
b. Abuse of Rights
Although treaty shopping by investors does not always result in the abuse of rights, it constitutes the most significant problem that host States should be protected against. In some instances, creation and structuring of corporations solely to gain access to investment arbitration constitutes an abuse of the investment law system, abuse of process, and violation of the good faith principle.100Id. at 40. Treaty shopping practices generally amount to abuse of rights in cases where a corporate restructuring or a change in ownership of the shares or assets constituting an investment takes place after a dispute between the host State and investor materializes. Therefore, the key issue in this context is the timing of the restructuring. Although treaty shopping practice can be looked upon more favorably if done by corporate restructuring in advance of a dispute, such practice constitutes a manifest abuse of good faith if done later on.101Brabandere, supra note 34, at 623; Mobil Corporation, Venezuela Holdings BV, Mobil Cerro Negro Holding Ltd, Mobil Venezolana de Petroleos Holdings, Inc, Mobil Cerro Negro, Ltd, and Mobil Venezolana de Petroleos, Inc v. Bolivarian Republic of Venezuela, ICSID Case No. ARB/07/27, Decision on Jurisdiction, ¶¶ 204-206 (2010). Arbitral tribunals generally do not legitimize treaty shopping expressly done in bad faith. However, as can be observed in the continuous endeavors of the Uzan family to internationalize a local dispute,102See Cementownia, supra note 72; Libananco v. Turkey, supra note 79; Cem Uzan v. Turkey pending before Stockholm Chamber of Commerce (SCC filed Jun. 06, 2014). bad faith claims brought ceaselessly through treaty shopping forces States to devote significant time and resources to defending these claims. Broad investor definitions in IIAs harm the State’s interests by generously offering all kinds of investors the ability to bring arbitration claims against States, including those that are in bad faith. As a result, investors are able to overstep their boundaries and harm States by forcing them to invest resources in defending these cases even if jurisdiction is eventually denied.
c. State Consent
The legitimacy of the investment protection system is based on State consent as expressed in the IIAs.103John Lee, Resolving Concerns of Treaty Shopping in International Investment Arbitration, 6 (2)
d. Governance Gap
Directly enforceable rights of foreign investors protected under BITs may cause States to face difficulty when making regulations for public welfare and social and environmental standards, as they fear foreign investor challenges.109Van Os & Knottnerus, supra note 41, at 12. This problem is not directly related to treaty shopping; it concerns the international investment law system as a whole. However, treaty shopping exacerbates this problem,110Primec, supra note 3, at 19. as it significantly increases the amount of potential arbitral claims that may be brought regarding a State action.
V. Strategies for Curbing Treaty Shopping
a. Termination and Renegotiation of IIAs
Dealing with treaty shopping at the level of substantive provisions of IIAs would provide a clear and definite solution to this problem that is considerably easier than addressing the problem through arbitral tribunals. Development of a practice condemning treaty shopping is likely to be challenging, and may lead to dissenting decisions that would cause further uncertainty and weakening in the investment arbitration system.111Id. at 42. On the other hand, clear language regarding treaty shopping practices in IIAs would provide a straightforward solution that would prevent different interpretational approaches. To address this issue, States may choose to require legal entities to have substantial business activity, its seat, or basically a genuine link to the State to qualify as an investor under the IIA. In other words, to curb treaty-shopping practices, States should abandon the place of incorporation requirement and focus on genuine link by adopting the seat of corporation, control, or combined factors test.
In order to change the definition of investors in IIAs, which is the basis for treaty shopping, many States would have to terminate and renegotiate their existing IIAs. As a matter of fact, the termination of BITs as a reaction to treaty shopping is not a novelty in the investment law sphere. Certain countries, like the Netherlands, who adopt extensive definitions of investment and “investor/national” in their BITs have come to be known as “treaty havens” for investment protection and encourage treaty shopping.112Id. at 20. As a result, trading partners of such countries that are at the receiving end of arbitration show discomfort towards the facilitation of treaty shopping and consider termination of the underlying treaties.113Azaino, supra note 8, at 13. For instance, while Bolivia and Czech Republic have only threatened to denounce their BITs with the Netherlands,114Primec, supra note 3, at 20. in 2008 Venezuela actually terminated its Dutch BIT (originally concluded in 1991) to renegotiate it.115Matthew Skinner et al., Access and Advantage in Investor-State Arbitration: the Law and Practice of Treaty Shopping,
Since the place of incorporation requirement language in IIAs is the underlying cause for the proliferation of treaty shopping practices, terminating and renegotiating BITs in order to incorporate a genuine link requirement in the definition of investors would provide the most straightforward solution. On the other hand, a major downside of this approach is that renegotiating a BIT would be very time consuming and burdensome.117Lee, supra note 93, at 17; Primec, supra note 3, at 42. Thus, such change is not likely to take place on a large scale in the near future.
b. Global Investment Treaty
An alternative and more comprehensive solution to treaty shopping would be the adoption of a far-reaching multilateral investment treaty.118Primec, supra note 3, at 42. With such a comprehensive treaty, the conflicting principles in public international law and investment law could find a balance, and the adverse effect of investment treaties on the environment and human rights could be mitigated.119Id. Most importantly, such a treaty would render treaty shopping superfluous altogether, as it would harmonize the rules and provide consistency and uniformity for investors while addressing the concerns of states and upholding reciprocity.120Id.;
Despite its potential benefits, this alternative could prove to be even more time consuming and burdensome than termination and renegotiation of BITs due to its large scope. Needless to say, the level of protection that States would want to offer for investors would vary significantly, especially between developed and developing States, and between capital exporting and capital importing States.121Primec, supra note 3, at 43. Consequently, finding sufficient common ground to conclude a multilateral investment treaty, which has failed despite past attempts,122Lee, supra note 93, at 17; Primec, supra note 3, at 43. seems to be very difficult currently. On the other hand, as the investment law system develops in concert with globalization, States may become more supportive of the harmonization of rules and a more uniform investment law system.
c. Denial of Benefits Clauses
Insertion of denial of benefits clauses in IIAs is another effective mechanism for States to prevent treaty shopping through corporate nationality planning. Denial of benefits clauses entitle a contracting party to deny benefits under the investment treaty to a legal entity that does not have substantial business activities in the contracting State123Waibel, supra note 13, at 10. or that is not controlled by a person in that contracting party.124Zhang, supra note 9, at 57. Although denial of benefits clauses are not yet commonplace, they are gaining popularity and are included in BITs concluded by the U.K., U.S., Canada, Australia, Austria, and Mexico, as well as in NAFTA, CAFTA-DR, the ECT, and US and Canadian Model BITs.125Waibel, supra note 13, at 9.
Though the “substantial business activities” element frequently constitutes the benchmark for denial of benefits clauses, this term is neither defined in the treaties nor addressed in their explanatory notes.126Id. at 10. In addition, although denial of benefits claims are raised in arbitration,127See Tokios v. Tokeles, supra note 28; Pan American Energy LLC, et al. v. Argentine Republic, ICSID Case No. ARB/03/13, Decision on Preliminary Objections (27 July 2006); Limited Liability Company Amto v. Ukraine, Arbitration Institute of the Stockholm Chamber of Commerce Arbitration No 080/2005, Final Award, ¶ 68 (Mar. 26, 2008); Petrobart Limited v. The Kyrgyz Republic, SCC Arb. No. 126/2003, Award, 58 (Mar. 29, 2005). arbitral tribunals do not provide unified criteria.128Zhang, supra note 9, at 59. In this regard, denial of benefits clauses may not seem a clear solution to treaty shopping due to their ambiguous nature, especially when a narrower investor definition (such as one based on seat of corporation) appears to have more immediate impact. However, the combination of a broad investor definition129Such as the place of incorporation standard with a denial of benefits clause provides flexibility to investors to structure their investments while offering States the ability to have redress for perceived abuses.130Waibel, supra note 13, at 11. This flexibility nevertheless gives little guidance to tribunals to determine whether it was proper for a State to exercise the denial of benefits clause.131Id. Consequently, for denial of benefits clauses to become a more effective method to prevent treaty shopping, the meaning of “substantial business activities” should be clearly delineated.132Zhang, supra note 9, at 66. With a clear definition, States could protect themselves from abusive treaty shopping practices and bona fide investors would be still protected, as they would be able to clearly assess whether they meet the criteria before making their investment.133Id.
d. Broader Use of the Abuse of Process / Good Faith Principle
While it would not be proper for arbitral tribunals to disregard the definition of investors and adopt standards that are not contemplated by the State parties during the negotiation and drafting process of IIAs,134Skinner et al., supra note 4, at 280. tribunals could decide in their own procedures to prevent abuse of process and good faith as a reasonable response to treaty shopping.135Zhang, supra note 9, at 62. The relevant rules of international law may be used as a tool by the tribunals to fill the gaps and interpret the nationality rules in a more equitable manner in concert with textual and teleological interpretation.136Id. For instance, paragraph 3 of Article 31 of the Vienna Convention on the Law of Treaties requires context to be taken into account in treaty interpretation.137Vienna Convention on the Law of Treaties art. 31, opened for signature May 23, 1969, 1155 U.N.T.S. 331. Further, as held in Amoco International Finance Corporation v. Iran, “the rules of customary law may be useful in order to fill in possible lacunae of the treaty, to ascertain the meaning of undefined terms in its text or, more generally, to aid interpretation and implementation of its provisions.”138Amoco International Finance Corporation v. The Government of the Islamic Republic of Iran et al., Iran-US C.T.R., vol. 15 1987-II, Case No. 56, Partial Award, Award No. 310-56-3, §112 (July 14, 1987). Accordingly, tribunals may adopt a more equitable interpretation for the definition of investors through incorporating relevant rules in international law while still respecting the language in investment treaties. In this respect, the abuse of process principle would be useful for tribunals in their evaluation of the definition of investors to prevent misuse of protections.139Zhang, supra note 9, at 62. The application of the abuse of process principle in international law does not receive much opposition140See
VI. Conclusion
Treaty shopping is a relatively new practice arising from the broad definition of investors in IIAs, the rise of which likely had not been foreseen by signatory States at the time of the proliferation of BITs. Over the past decade, this practice has been both tolerated and maligned. Some forms of corporate nationality structuring for the purposes of treaty shopping may certainly be “innocent” and had been carried out for tax planning or other business purposes. Further, the availability of treaty shopping may liberate investors and essentially offer fair treatment, which is a fundamental principle in international investment law. However, the broad investor definitions in IIAs binding arbitral tribunals provide liberty to an extent that allows for the abuse of this practice. While arbitral tribunals generally tend to distinguish treaty shopping conducted in bad faith that amount to an abuse of rights, they are ultimately bound by the language of IIAs and currently provide no clear and consistent guidance for the legitimacy of treaty shopping.
Ultimately, host States are forced to tolerate a multitude of unforeseen arbitration claims brought by de facto third parties and even their own nationals. Such wide use of treaty shopping through corporate nationality planning without clear limits results in the breach of the reciprocity principle and State consent, aggravation of the governance gap, and abuse of rights. States that are discontent with being at the receiving end of treaty shopping have devised different methods to deal with the problem such as incorporating denial of benefits clauses, raising abuse of right claims, and renegotiating BITs. The efficacy of these methods is limited and does not always provide relief. While the root cause of this problem is the language in the IIAs providing a broad definition for investors, amending such language in IIAs through negotiations is a big undertaking. Moreover, arbitral tribunals have not yet consistently adopted a more equitable approach to balance host State and investor interests. In this light, clear and consistent limitations to treaty shopping will need to be established in order to prevent its rampant rise to the point of unsustainability due to the practice’s heavy burden on host States.
References
01. | ↵ | Bilateral investment treaties are hereinafter referred to as BITs. |
02. | ↵ | Berk Demirkol, Yatirim Tahkiminde Paravan Sirketlerin Actigi Yetki Sorunlari [Jurisdictional Issues Concerning Pseudonational Companies in Investment Arbitration], |
03. | ↵ | Jan Primec, Enemy of the State: Is Treaty Shopping in Contradiction with the Rationale of Investment Law? 3 (2015) (unpublished master thesis, University of Amsterdam) (on file with the Digital Academic Repository, University of Amsterdam). |
04. | ↵ | Demirkol, supra note 2, at 302. |
05. | ↵ | See Tokios Tokeles v. Ukraine, ICSID Case No ARB/02/18, Award, ¶¶ 38-40 (Jul. 26, 2007), 20 ICSID Rev-FILJ 205 |
06. | ↵ | See generally Banro v. DR Congo, ICSID Case No. ARB/98/7, Award, (Sep. 1, 2000). |
07. | ↵ | Primec, supra note 3, at 41. |
08. | ↵ | Id. at 34-39; Efe Uzazi Azaino, Nationality/Treaty Shopping: Can Host Countries Sift the Wheat from the Chaff?, |
09. | ↵ | Xiao-Jing Zhang, Proper Interpretation of Corporate Nationality under International Investment Law to Prevent Treaty Shopping, 6(1) |
10. | ↵ | Azaino, supra note 8, at 13. |
11. | ↵ | Zhang, supra note 9, at 66-69. |
12. | ↵ | |
13. | ↵ | |
14. | ↵ | OECD, |
15. | ↵ | The Nottebohm case (Liechtenstein v. Guatemala), 1955 I.C.J. 4, at 23 (Apr. 6). |
16. | ↵ | Waibel, supra note 13, at 6. |
17. | ↵ | Id. |
18. | ↵ | See, e.g., North American Free Trade Agreement, U.S.-Can.-Mex., Dec. 17, 1992, 32 I.L.M. 289 (1993); United States Central American Free Trade Agreement-Dominican Republic, May 28, 2004; Energy Charter Treaty, Dec. 17, 1994, 2080 U.N.T.S. 95; Treaty Between the Government of the United States of America and the Government of the Republic of Rwanda Concerning the Encouragement and Reciprocal Protection of Investment, U.S.-Rwanda, Feb. 19, 2008. |
19. | ↵ | See generally Case Concerning the Barcelona Traction, Light and Power Company, Limited (Belgium v. Spain), 1964 I.C.J. 6 (July 24); Tokios Tokeles v. Ukraine, ICSID Case No ARB/02/18, Award, (Jul. 26, 2007), 20 ICSID |
20. | ↵ | Matthew Skinner et al., Access and Advantage in Investor-State Arbitration: the Law and Practice of Treaty Shopping, |
21. | ↵ | OECD, supra note 14, at 82. |
22. | ↵ | Waibel, supra note 13, at 7. |
23. | ↵ | Id. |
24. | ↵ | Id.. See also Agreement between the People’s Republic of China and the Federal Republic of Germany on the Encouragement and Reciprocal Protection of Investments, (China-Ger.), Dec. 1, 2003, 2362 U.N.T.S. 253; L’accord entre le Gouvernement de la Republique francaise et le Gouvernement de la Republique de Singapour sur “encouragement et la protection des investissements, ensemble trois echanges de lettres (France-Singapore Bilateral Investment Treaty), (Sing.-Fr.), Sep. 8, 1975; Accordo tra la Repubblica italiana e la Grande Jamahiriya araba libica popolare socialista sulla promozione e protezione degli investimenti (Italy-Libya Bilateral Investment Treaty), (It.-Libya), Dec. 13, 2000. |
25. | ↵ | Waibel, supra note 13, at 7. |
26. | ↵ | Id. at 8 |
27. | ↵ | OECD, supra note 14, at 25. |
28. | ↵ | Waibel, supra note 13, at 8. |
29. | ↵ | Tokios Tokeles v. Ukraine, ICSID Case No. ARB/02/18, Decision on Jurisdiction, ¶ 38 (2004). |
30. | ↵ | Demirkol, supra note 2, at 11. |
31. | ↵ | Tokios Tokeles v. Ukraine, supra note 29, at ¶¶ 1-6. |
32. | ↵ | Id. at ¶ 22. |
33. | ↵ | Id. at ¶71. |
34. | ↵ | Id. at ¶ 40. |
35. | ↵ | This conclusion was supported by the fact that the company was established six years before the entry into force of the Ukraine-Lithuania BIT. |
36. | ↵ | Piercing the corporate veil is a doctrine that allows courts to treat the rights and obligations of a company as rights and obligations of its shareholders. |
37. | ↵ | Tokios Tokeles v. Ukraine, supra note 29, at ¶ 66. |
38. | ↵ | Tokios Tokeles v. Ukraine, ICSID Case No. ARB/02/18, Dissenting Opinion of Prosper Weil, ¶ 23 (2004). |
39. | ↵ | Id. at ¶ 26. |
40. | ↵ | Saluka Investments B.V. v. Czech Republic, Partial Award, (Perm. Ct. Arb. 2006). |
41. | ↵ | Id. at ¶ 211 |
42. | ↵ | Id. at ¶ 222 et seq. |
43. | ↵ | ADC Affiliate Ltd. and ADC & ADMC Management Ltd. v The Republic of Hungary, ICSID Case No. ARB/03/16, Award (2006). |
44. | ↵ | Note that at the time of dispute, Canada was not a party to the ICSID Convention, under which the case was brought. |
45. | ↵ | ADC v. Hungary, at ¶ 132. |
46. | ↵ | Id. |
47. | ↵ | Id. at ¶¶ 357-362. |
48. | ↵ | The Rompetrol Group N.V. v. Romania, ICSID Case No. ARB/06/3, Decision on Respondent’s Preliminary Objections on Jurisdiction and Admissibility (2008) |
49. | ↵ | Id. at ¶ 44. |
50. | ↵ | The President of the Arbitral Tribunal of Tokios Tokeles v.Ukraine. |
51. | ↵ | See supra, note 29. |
52. | ↵ | Rompetrol v. Romania, supra note 48, at ¶ 52. |
53. | ↵ | See supra, note 13. |
54. | ↵ | Rompetrol v. Romania, supra note 48, at ¶ 54. In the Nottenbohm Case, the International Court of Justice held that the acquired nationality of a natural person whose real and effective links are with the Respondent State is not opposable to that State. Romania argued that, similarly, a foreign nationality asserted by a corporation that is owned and controlled by a Romanian citizen and has its real seat in Romania should not be opposable to Romania. |
55. | ↵ | Id. at ¶ 54. |
56. | ↵ | Id. at ¶ 85. |
57. | ↵ | Id. at ¶ 110. |
58. | ↵ | Phoenix Action, Ltd. v. The Czech Republic, ICSID Case No. ARB/06/5, Award (2009). |
59. | ↵ | Id. at ¶ 38. |
60. | ↵ | Id. at ¶ 34. |
61. | ↵ | Salini Costruttori SpA and Italstrade SpA v. Kingdom of Morocco, ICSID Case No. ARB/00/4, Decision on Jurisdiction, ¶¶ 50-58 (Jul. 23, 2001), 42 ILM 609 (2003). |
62. | ↵ | Id. at ¶ 52. |
63. | ↵ | Phoenix Action, Ltd. v. The Czech Republic, ICSID Case No. ARB/06/5, Award, ¶¶ 101-13 (2009). |
64. | ↵ | Id. at ¶¶ 135-44. |
65. | ↵ | Id. at ¶ 143. |
66. | ↵ | Banro American Resources, Inc. and Societe Aurifere du Kivu et du Maniema S.A.R.L. v. DR Congo, ICSID Case No. ARB/98/7, Award (2000). |
67. | ↵ | “No one can transfer more rights (to another) than he himself has.” |
68. | ↵ | Banro American, supra note 66, at ¶ 5. |
69. | ↵ | Société Générale In re DR Energy Holdings Limited and Empresa Distribuidora de Electricidad del Este, S.A. v. The Dominican Republic, LCIA Case No. UN 7927, Award on Preliminary Objections to Jurisdiction, (2008), http://www.italaw.com/sites/default/files/case-documents/ita0798.pdf |
70. | ↵ | Id. at ¶ 109. |
71. | ↵ | Id. at ¶ 110. |
72. | ↵ | Cementownia ‘Nowa Huta’ S.A. v. Republic of Turkey, ICSID Case No. ARB(AF)/06/2, Award (2009). |
73. | ↵ | The Uzan family was indicted for racketeering and was allegedly involved in a multi-billion dollar bank fraud in Turkey, resulting in the seizure of 219 companies held by them by the Turkish government. They also defrauded Motorola and Nokia. The family was granted political asylum by the French government where they currently reside. For more information on the alleged fraudulent conduct of the family. See Turkey Seizes 219 Companies of Uzan Family, |
74. | ↵ | Cementownia, supra note 72, at ¶ 16. |
75. | ↵ | Id. at ¶ 23. |
76. | ↵ | Id. at ¶ 149. |
77. | ↵ | Id. at ¶ 159. |
78. | ↵ | Id. at ¶¶ 156-57. |
79. | ↵ | Libananco Holdings Co. Limited v. Republic of Turkey, ICSID Case No. ARB/06/8, Award (2011). |
80. | ↵ | Demirkol, supra note 2, at 35. |
81. | ↵ | Cementownia, supra note 72, at ¶ 104. |
82. | ↵ | Id. |
83. | ↵ | Id. |
84. | ↵ | Id. |
85. | ↵ | Id. at ¶ 537. |
86. | ↵ | Demirkol, supra note 2, at 37. |
87. | ↵ | Primec, supra note 3, at 26. |
88. | ↵ | Van Os & Knottnerus, supra note 41, at 37. |
89. | ↵ | Primec, supra note 3, at 26. |
90. | ↵ | Demirkol, supra note 2, at 18. |
91. | ↵ | Paul Michael Blyschak, Access and advantage expanded: Mobil Corporation v Venezuela and other recent arbitration awards on treaty shopping, 4(1) J WORLD ENERGY L. B. 32, 35 (2011). |
92. | ↵ | |
93. | ↵ | Azaino, supra note 8, at 10. |
94. | ↵ | Primec, supra note 3, at 35. |
95. | ↵ | Id. |
96. | ↵ | Azaino, supra note 8, at 11. |
97. | ↵ | |
98. | ↵ | Eric De Brabandere, ‘Good Faith’, ‘Abuse of Process’ and the Initiation of Investment Treaty Claims, 3(3) J |
99. | ↵ | Primec, supra note 3, at 35. |
100. | ↵ | Id. at 40. |
101. | ↵ | Brabandere, supra note 34, at 623; Mobil Corporation, Venezuela Holdings BV, Mobil Cerro Negro Holding Ltd, Mobil Venezolana de Petroleos Holdings, Inc, Mobil Cerro Negro, Ltd, and Mobil Venezolana de Petroleos, Inc v. Bolivarian Republic of Venezuela, ICSID Case No. ARB/07/27, Decision on Jurisdiction, ¶¶ 204-206 (2010). |
102. | ↵ | See Cementownia, supra note 72; Libananco v. Turkey, supra note 79; Cem Uzan v. Turkey pending before Stockholm Chamber of Commerce (SCC filed Jun. 06, 2014). |
103. | ↵ | John Lee, Resolving Concerns of Treaty Shopping in International Investment Arbitration, 6 (2) |
104. | ↵ | Primec, supra note 3, at 38. |
105. | ↵ | Id. at 39; Van Os & Knottnerus, Dutch Bilateral Investment Treaties: A gateway to ‘treaty shopping’ for investment protection by multinational companies, |
106. | ↵ | See Republic of South Africa’s Government Position Paper on “Biateral Investment Treaty Policy Framework Review” (June 2009), available at http://pmg-assets.s3-website-eu-west-1.amazonaws.com/docs/090626trade-bi-lateralpolicy.pdf (stating that “Prior to 1994, the [Republic of South Africa] had no history of negotiating BITs and the risks posed by such treaties were not fully appreciated at that time”). |
107. | ↵ | Primec, supra note 3, at 38; Van Os & Knottnerus, supra note 41, at 11. |
108. | ↵ | Lee, supra note 39, at 6. |
109. | ↵ | Van Os & Knottnerus, supra note 41, at 12. |
110. | ↵ | Primec, supra note 3, at 19. |
111. | ↵ | Id. at 42. |
112. | ↵ | Id. at 20. |
113. | ↵ | Azaino, supra note 8, at 13. |
114. | ↵ | Primec, supra note 3, at 20. |
115. | ↵ | Matthew Skinner et al., Access and Advantage in Investor-State Arbitration: the Law and Practice of Treaty Shopping, |
116. | ↵ | Azaino, supra note 8, at 13. |
117. | ↵ | Lee, supra note 93, at 17; Primec, supra note 3, at 42. |
118. | ↵ | Primec, supra note 3, at 42. |
119. | ↵ | Id. |
120. | ↵ | Id.; |
121. | ↵ | Primec, supra note 3, at 43. |
122. | ↵ | Lee, supra note 93, at 17; Primec, supra note 3, at 43. |
123. | ↵ | Waibel, supra note 13, at 10. |
124. | ↵ | Zhang, supra note 9, at 57. |
125. | ↵ | Waibel, supra note 13, at 9. |
126. | ↵ | Id. at 10. |
127. | ↵ | See Tokios v. Tokeles, supra note 28; Pan American Energy LLC, et al. v. Argentine Republic, ICSID Case No. ARB/03/13, Decision on Preliminary Objections (27 July 2006); Limited Liability Company Amto v. Ukraine, Arbitration Institute of the Stockholm Chamber of Commerce Arbitration No 080/2005, Final Award, ¶ 68 (Mar. 26, 2008); Petrobart Limited v. The Kyrgyz Republic, SCC Arb. No. 126/2003, Award, 58 (Mar. 29, 2005). |
128. | ↵ | Zhang, supra note 9, at 59. |
129. | ↵ | Such as the place of incorporation standard |
130. | ↵ | Waibel, supra note 13, at 11. |
131. | ↵ | Id. |
132. | ↵ | Zhang, supra note 9, at 66. |
133. | ↵ | Id. |
134. | ↵ | Skinner et al., supra note 4, at 280. |
135. | ↵ | Zhang, supra note 9, at 62. |
136. | ↵ | Id. |
137. | ↵ | Vienna Convention on the Law of Treaties art. 31, opened for signature May 23, 1969, 1155 U.N.T.S. 331. |
138. | ↵ | Amoco International Finance Corporation v. The Government of the Islamic Republic of Iran et al., Iran-US C.T.R., vol. 15 1987-II, Case No. 56, Partial Award, Award No. 310-56-3, §112 (July 14, 1987). |
139. | ↵ | Zhang, supra note 9, at 62. |
140. | ↵ | See |
141. | ↵ | Skinner et al., supra note 4, at 283. |
142. | ↵ | Zhang, supra note 9, at 63 and Phoenix v. Czech Republic, supra note 53, at ¶ 143 applied the abuse of right principle. |
143. | ↵ | Blyschak, supra note 81, at 35. |
144. | ↵ | Id. at 38-39; Zhang, supra note 9, at 65. |