Environmental Engineering Reference
In-Depth Information
incorporation implies that the place of incorporation or the registered office is
essential for the nationality.
211
The main seat of business theory encompasses the
assessment of the place of central administration or
212
According to
the ICJ, the nationality does not depend on the origin of the majority of share-
holders.
213
The ICJ underlines this explicitly by mentioning that the effective link
theory, which is accepted by the ICJ,
214
cannot be applied to TNCs.
215
Therefore,
the ICJ usually checks the nationality according to the incorporation theory.
Within ICSID jurisdiction, the place of incorporation or place of the seat have
been accepted as well as applicable methods to determine the investor
'
s national-
ity.
216
However, Art. 25(2)(b) alternative 2 of the ICSID Convention is an excep-
tion to the general rule because it takes the control theory into account,
217
without
imposing any specific criteria or tests (e.g. control or place of incorporation) on the
contract parties.
218
The idea of the control theory is to lift the
effective seat.
'
'
and
assess the controlling shareholders and their nationality.
219
If the place of incorpo-
ration or place of the seat theories do not deliver a satisfying result, the only
possibility is to check for foreign control, according to Art. 25(2)(b) alternative
2 of the ICSID Convention.
220
The foreign control is checked on the date of
submission to the ICSID, as the ICSID Convention does not require a continuous
ownership.
221
ICSID tribunals are often unwilling to assess “further layers” beyond
corporate veil
'
'
211
Dolzer and Schreuer (
2008
), 49; Muchlinski (
2009
), 341 (348); Herdegen (
2008
), § 15 para 4.
212
Herdegen (
2008
), § 15 para 4; Muchlinski (
2009
), 341 (349).
213
Pursuant to the gaining of legal independence of the company, there can be no protection by public
law because of the control of foreign shareholders, in: ICJ [1970] Barcelona Traction, Light and
Power Company, Limited (second phase)—Judgment, 3 (6) para 3, (7) para 8 and (50-51) para 102.
214
ICJ [1955] Nottebohm Case (second phase)—Judgment, [1955], 4 (22).
215
Applying diplomatic protection, but not using the effective link theory, in: ICJ [2007] Case
concerning Ahmadou Sadio Diallo, Preliminary Objections—General List No. 103, 28 para 64;
ICJ [1970] Barcelona Traction, Light and Power Company, Limited (second phase)—Judgement,
3 (42) paras 70-71; This decision was subject to numerous separate opinions, in: ICJ [1970]
Barcelona Traction, Light and Power Company, Limited (second phase)—Separate opinion
Gerald Fitzmaurice, 64 (79-84) paras 26-34; ICJ [1970] Barcelona Traction, Light and Power
Company, Limited (second phase)—Separate opinion Philip C. Jessup, 161 (182-190) paras 38-
49; ICJ [1970] Barcelona Traction, Light and Power Company, Limited (second phase)—Separate
opinion Andr
´
Gros, 267 (280-283) paras 22-27.
216
ICSID [2004] ARB/02/18, 205 (220) para 40; ICSID [2001] ARB/00/5, 41 para 108.
217
Hobe (
2002
), 249 (251); Dolzer and Schreuer (
2008
), 52-53.
218
ICSID [2010] ARB/07/27, 42-43 paras 156-157; ICSID Convention not defining the terms
“nationality” and “foreign control”, in: Reed et al. (
2004
), 17.
219
Muchlinski (
2009
), 341 (350).
220
There is no consistency concerning what “control” actually means, in: Griebel (
2008
), 66;
cf. Kn¨ tel in Siebel et al. (
2008
), para 1271; Opposite opinion that the state will always try to avoid
a investor majority, in: Hunter (
2007
), 165 (167).
221
ICSID [2010] ARB/07/24—Award, 27-28 para 95; ICSID [2005] ARB/97/3—Decision,
17 para 61; ICJ [1998] Questions of Interpretation and Application of the 1971 Montreal Con-
vention arising from the Aerial Incident at Lockerbie, Judgment—Preliminary Objections,
115 (129) paras 37-38.
