Nationality and Statelessness

CASE CONCERNING THE BARCELONA TRACTION, LIGHT AND POWER CO.

ICJ, February 5, 1970
FACTS
The Barcelona Traction, Light and Power Company Limited is a Spanish Corporation
incorporated in Canada. During its time of operation it issued shares called Sterling Bonds to
various persons wherein some of which were Belgian Nationals. The company then went
bankrupt and went under receivership. Belgium claims that the government of Spain is
responsible for the loss of the assets of the company in Spain and seeks reparation for its Belgian
shareholders.
ISSUE
Whether or not a state is liable for foreign investments of foreign corporations in its
territory
HELD
A state has an obligation to protect foreign investments of foreign corporations. If the injury
caused to foreign investors was acquired due to the actions of the state which are contrary to
international law, then that state is liable towards the foreign investors for the reparation thereof.
The court held that Belgium has no standing to bring the case to the court in favor of its
nationals. Only parties that have rights due to an international obligation may bring a claim to the
court where diplomatic protection has been breached. It had been maintained that a State could
make a claim when investments by its nationals abroad, such investments being part of a national
economic resources, were prejudicially affected in violation of the right of the state itself to have
its nationals enjoy a certain treatment. But, in the present state of affairs, such a right could only
result from a treaty or special agreement. And no instrument of such a kind was in force between
Belgium and Spain.