Indirect shareholding in an enterprise does not preclude the inclusion of the holding

corporation in the definition of the Investor

In Azurix v. Argentina, 145 the Tribunal found that “given the wide meaning of investment in the
definition of Article, (In the current factual scenario the provisions of the BIT [US-Argentina]
protect indirect claims”. It cited the CMS Tribunal saying that “jurisdiction can be established under
the terms of the specific provision of the BIT. Whether the protected investor is in addition a party to
a concession agreement or license agreement with the host State is immaterial for the purpose of
finding jurisdiction under those treaty provisions since there is a direct right of action of
shareholder”.

In Gas Natural SDG S.A. v. Argentina, 146 Argentina also maintained that the claimant could not,
pursuant to the BIT between Argentina and Spain, qualify as an investor under the BIT as it was only
an indirect shareholder of the Argentine company. The Tribunal found that the claimant qualified
within the definition of investment clearly stating that “assertion that a claimant under a Bilateral
Investment Treaty lacked standing because it was only an indirect investor in the enterprise that had
a contract with or a franchise from the State party to the BIT, has been made numerous times,
never, so far as the Tribunal has been made aware, with success”. The Tribunal made clear that for
example the CMS v. Argentina tribunal’s analysis “was very close to the analysis of the present
Tribunal”.

In Siemens v. Argentina, 147 the underlying BIT between Germany and Argentina defined
investment to include shares and other forms of interests in legal entities. The claim was brought by
Siemens A.G., which wholly owned SNI A.G. Both German companies owned SITS S.A., an
Argentinian company. Argentina argued that indirect claims could only be brought, if there was
express authorisation to do so in the treaty. The tribunal rejected Argentina’s argument and
concluded that the shareholder was allowed to bring proceedings for a wrong inflicted upon an
indirect subsidiary: “The plain meaning of this provision [Article 1(1)b) of the Treaty] is that shares
held by a German shareholder are protected under the Treaty. The Treaty does not require that
there be no interposed companies between the investment and the ultimate owner of the company.
Therefore, the