Nationality of Corporate Investors in International Investment Law

This thesis is devoted to analysis of approaches to nationality of corporate investors in international investment law. International investment law imposes a number of restrictions on persons capable of suing host states. One of the requirements is that claimants shall be foreign investors. Nationals of a host state do not have access to investor-state arbitration. However, since investments are often made using complex corporate structures, many Tribunals face with the problem of determining corporate nationality for the purposes of ratione personae jurisdiction. Hence, it is important to analyze various approaches to determining nationality of corporate investors. In the first chapter the author arrives at the conclusion that the prevalent approach is the incorporation theory when nationality is determined by the place of company’s registration. This theory was initially established in the context of diplomatic protection and is now actively used in investor-state arbitration. Despite its prevalence, this theory is criticized for its formalism and possibility of misuse. In order to overcome formalism of this theory, investors and states have alternatives which are considered in the second chapter. If investments are carried on through a locally established subsidiary, a parent company may sue a host state on its behalf. A subsidiary may only bring a claim if state parties agree to it. In case investments are made without a local company, the Tribunal in exceptional circumstances may look at nationality of a claimant’s shareholders. In determining such exceptional circumstances, the abuse of rights doctrine shall be used. In conclusion the author projects that this approach will be used more actively in the future, because it helps strike a balance between interests of foreign investors and host states.