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The Barcelona Traction case is not relevant for the protection accorded to foreign shareholders under an IIT
- International Investment Treaties (IITs) > Protection of Investors under IITs > Applicability of IITs > Ratione Materiae – Definition of Investment > The Concept of "Investment" > Shares
- ICSID Convention > Jurisdiction of the Centre (Articles 25-27) > Article 25 > Jurisdiction Ratione Materiae > Investment > Further Problems
The fact that "derivative suits" are inadmissible under local law is not relevant for the treaty based protection of a foreign shareholder owning shares in a local company
An exclusive choice of forum clause in a contract cannot bar a tribunal from examining treaty based claims
At the jurisdictional stage, a tribunal has a limited ability to scrutinize the claims as formulated by the claimant. If the facts asserted by the claimant are capable of being regarded as alleged breaches of the IIT, the claimant should be able to have them considered on their merits
At the jurisdictional stage, a tribunal will only consider arguments relevant to the objections to jurisdiction
- ICSID Convention > Arbitration (Articles 36-55) > Article 41
- ICSID Arbitration Rules > Rule 41
At the jurisdictional phase, it may be sufficient to establish a prima facie case concerning aspects of the tribunal’s jurisdiction
A measure of a host state can affect an investment directly even if the measure is not specifically aimed at that investment, e.g. in case a general measure is taken for the general welfare; it is sufficient that the measure was applicable to the investment as a matter of law and was implemented in respect of the investment
A measure by a state being general in its application does not exclude it from being challenged as a breach of an IIT
If shares constitute the investment, the protection by an IIT is not limited to their free enjoyment, but extends to the respect of the treaty standards as to the substance of the investment
Minority shareholdings can constitute investments
Protection of Investors under IITs
Applicability of IITs
Ratione Materiae – Definition of Investment
The Concept of "Investment"
Shares
The Barcelona Traction case is not relevant for the protection accorded to foreign shareholders under an IIT
The fact that "derivative suits" are inadmissible under local law is not relevant for the treaty based protection of a foreign shareholder owning shares in a local company
Minority shareholdings can constitute investments
State Conduct as a ‘Measure’ Violating the Treaty
A measure by a state being general in its application does not exclude it from being challenged as a breach of an IIT
Waiver of Rights Under an IIT
An exclusive choice of forum clause in a contract cannot bar a tribunal from examining treaty based claims
Admissibility
Prima Facie Case
At the jurisdictional stage, a tribunal has a limited ability to scrutinize the claims as formulated by the claimant. If the facts asserted by the claimant are capable of being regarded as alleged breaches of the IIT, the claimant should be able to have them considered on their merits
At the jurisdictional phase, it may be sufficient to establish a prima facie case concerning aspects of the tribunal’s jurisdiction
Jurisdiction of the Centre (Articles 25-27)
Article 25
Jurisdiction Ratione Materiae
Investment
Further Problems
The Barcelona Traction case is not relevant for the protection accorded to foreign shareholders under an IIT
If shares constitute the investment, the protection by an IIT is not limited to their free enjoyment, but extends to the respect of the treaty standards as to the substance of the investment
Arising Directly out of an Investment
A measure of a host state can affect an investment directly even if the measure is not specifically aimed at that investment, e.g. in case a general measure is taken for the general welfare; it is sufficient that the measure was applicable to the investment as a matter of law and was implemented in respect of the investment
Arbitration (Articles 36-55)
Article 41
At the jurisdictional stage, a tribunal will only consider arguments relevant to the objections to jurisdiction
Rule 41
At the jurisdictional stage, a tribunal will only consider arguments relevant to the objections to jurisdiction