brought under the dominican republic - central america - ita
brought under the dominican republic - central america - ita
brought under the dominican republic - central america - ita
Create successful ePaper yourself
Turn your PDF publications into a flip-book with our unique Google optimized e-Paper software.
The tribunal <strong>the</strong>refore concluded that <strong>the</strong>re had been “no abuse of legal personality.”<br />
36<br />
2.50. In Aguas del Tunari v. Bolivia, 37 a Bolivian company had entered into a water concession<br />
contract with <strong>the</strong> Bolivian authorities. Bechtel, a US corporation, owned<br />
55% of <strong>the</strong> shares in <strong>the</strong> Bolivian company, which were transferred to a Dutch company.<br />
The tribunal‟s jurisdiction was ostensibly derived from <strong>the</strong> Dutch-Bolivian<br />
BIT. Bolivia argued that <strong>the</strong> Dutch entity was a mere shell company created solely<br />
for <strong>the</strong> purpose of gaining access to ICSID and that, <strong>the</strong>refore, <strong>the</strong> tribunal had no jurisdiction<br />
<strong>under</strong> <strong>the</strong> BIT. The tribunal considered that <strong>the</strong> Dutch claimant was “not<br />
simply a corporation shell established to obtain ICSID jurisdiction over <strong>the</strong> case.” 38<br />
The tribunal explained <strong>the</strong> dividing line between abuse of process and legitimate restructuring<br />
even after <strong>the</strong> making of an investment:<br />
―… it is not uncommon in practice and – absent a particular lim<strong>ita</strong>tion – not illegal<br />
to locate one‘s operation in a jurisdiction perceived to provide a beneficial regulatory<br />
and legal environment in terms, for example, of taxation or <strong>the</strong> substantive law<br />
of <strong>the</strong> jurisdiction, including <strong>the</strong> availability of a BIT.‖ 39<br />
2.51. A statement to <strong>the</strong> same effect can be found in <strong>the</strong> Mobil decision, where <strong>the</strong> tribunal<br />
considered legitimate an “upstream” reorganization made in order to protect investments<br />
by gaining access to ICSID arbitration before any dispute, in contrast to an illegitimate<br />
“downstream” reorganization to <strong>the</strong> same effect with respect to a preexisting<br />
dispute:<br />
―As stated by <strong>the</strong> Claimants, <strong>the</strong> aim of <strong>the</strong> restructuring of <strong>the</strong>ir investments in<br />
Venezuela through a Dutch holding was to protect those investments against<br />
breaches of <strong>the</strong>ir rights by <strong>the</strong> Venezuelan authorities by gaining access to ICSID<br />
arbitration through <strong>the</strong> BIT. The Tribunal considers that this was a perfectly legitimate<br />
goal as far as it concerned future disputes.<br />
With respect to pre-existing disputes, <strong>the</strong> situation is different and <strong>the</strong> Tribunal considers<br />
that to restructure investments only in order to gain jurisdiction <strong>under</strong> a BIT<br />
36<br />
37<br />
38<br />
39<br />
Idem. The President, Prosper Weil, strongly dissented, stating: “The ICSID mechanism and remedy are not<br />
meant for investments made in a State by its own citizens with domestic cap<strong>ita</strong>l through <strong>the</strong> channel of a<br />
foreign entity, whe<strong>the</strong>r pre-existent or created for that purpose. … Given <strong>the</strong> indisputable and undisputed<br />
Ukrainian character of <strong>the</strong> investment <strong>the</strong> Tribunal does not, in my view, give effect to <strong>the</strong> letter and spirit,<br />
as well as <strong>the</strong> object and purpose, of <strong>the</strong> ICSID institution.” Ibid., Dissenting Opinion, § 19 and § 20.<br />
Aguas del Tunari S.A. v. Republic of Bolivia, ICSID Case No. ARB/02/3, Decision on Jurisdiction, 21<br />
October 2005.<br />
Ibid., § 321.<br />
Ibid., § 330 (d).<br />
Part 2 – Page 15