Piercing the Corporate Veil Doctrine in International Investment Agreements

Diploma Thesis , 2017 , 58 Pages , Grade: 1.7

Law - Miscellaneous

The piercing the corporate veil in ISDS plays a twofold role. From the investors’ perspective, it is instrumental if a tribunal can ignore the difference between the legal personality of the company in which they invested in and the shares that they hold. Per contra, States also invoke this doctrine by trying to convince a tribunal to look at the true personalities involved and not to allow an investor to hide behind the veil of the different legal personalities.

To address these competing interests, the author of this Master Thesis in Chapter II intends to analyse the characteristic pattern and standing of shareholders in bringing indirect claims aimed to persuade the tribunal to ignore the difference between the legal personality of a company and its shareholders and to look at the true interests at stake instead. In Chapter III, the applicability of the piercing the corporate veil doctrine will be approached from the States’ perspective and when they invoke the denial of benefits clauses.

On the basis of the foregoing, this Master Thesis purports to address the intersection between the jurisdiction of the arbitral tribunal in ISDS and the concepts of investor and investment underlying the application of the piercing the corporate veil doctrine. By doing so, the author of this Master Thesis explores the provisions of IIAs commented on by authoritative treatises, contemporary views embodied in articles, and jurisprudence of international investment treaty tribunals. In order to arrive at its findings and conclusions, this Master Thesis utilizes the method of description, method of conceptual analysis, comparative method, and method of evaluation.

TABLE OF CONTENTS

BIBLIOGRAPHY

LIST OF CASES

LIST OF INVESTMENT REPORTS

LIST OF ABBREVIATIONS

I. INTRODUCTION

II. PIERCING THE CORPORATE VEIL FOR THE PURPOSES OF SHAREHOLDERS’ INDIRECT CLAIMS
A. PROVISIONS OF INTERNATIONAL INVESTMENT AGREEMENTS ON INDIRECT CLAIMS
1. Definition of “Investment” in IIA
(a) ICSID Convention
(b) ECT
(c) NAFTA
(d) BITs
B. STANDING OF SHAREHOLDERS’ ACTION FOR INDIRECT CLAIMS
1. Separate Legal Personality and Derivative Shareholders’ Rights
2. Barcelona Traction and the Development of Shareholders Rights to Bring Investment Claims
3. Shareholders Standing Independent from the Affected Company
4. Standing of Shareholders as a Joint Conception of Jurisdiction and Admissibility
C. STANDING OF SHAREHOLDERS TO BRING INDIRECT CLAIMS IN INVESTMENT TREATY DISPUTES
1. Standing based on the definition of investment under the IIAs
2. Standing based on foreign control requirement
D. THE PROBLEM OF THE AUTONOMOUS NATURE OF SHAREHOLDERS’ INDIRECT CLAIMS

III. PIERCING THE CORPORATE VEIL FOR THE PURPOSES OF DENIAL OF BENEFITS CLAUSES
A. DEFINITION OF NATIONALITY OF INVESTORS IN INTERNATIONAL INVESTMENT TREATIES
1. Criteria of Determination of Nationality of Investors
2. The Meaning of Corporate “Seat” for the Purposes of Coverage under IIAs
B. DISREGARDING THE CORPORATE FORM IN DENIAL OF BENEFITS CLAUSES
1. State’s Invocation of Denial of Benefits Clauses
a) Corporate nationality (“A-B-A scenario”)
b) Continuous nationality
c) Control by foreign nationals (“A-B-C scenario”)

IV. CONCLUSION

ANNEX 1. Known treaty-based ISDS cases initiated in 2016 involving Ukraine

• College: Humboldt-University of Berlin (International Dispute Resolution Master of Laws (LL.M.) Programme)
• Course: International Investment Arbitration
• Grade: 1.7
• Author: Anastasiia Dulska (Author)
• Publication Year: 2017
• Pages: 58
• Catalog Number: V427445
• ISBN (eBook): 9783668716377
• ISBN (Book): 9783668716384
• Language: English
• Tags: piercing, corporate, veil, doctrine, international, investment, agreements