But the mere fact that damage is sustained by both

company and shareholder does not imply that both

Whenever one of his direct rights is
are entitled to claim compensation. Thus no legal
infringed, the shareholder has an
conclusion can be drawn from the fact that the
independent right of action. But a
same event caused damage simultaneously
distinction must be drawn between a
Barcelona Traction affecting several natural or juristic persons. 44
direct infringement of the
Belgium v Spain
shareholder’s rights, and difficulties
Not a mere interest affected, but solely a right
or financial losses to which he may
infringed involves responsibility, so that an act
be exposed as the result of the
directed against and infringing only the company’s
situation of the company. 47
rights does not involve responsibility towards the
shareholders, even if their interests are affected. 46
An international tribunal is generally not bound by the
decision of any local court as to the determination of a
Al Tamimi v. Oman dispute under international law. A local court decision
ICSID Case No. which rules directly on a matter - such as the validity of the Decision of local courts are not
ARB/11/33, 3 termination of the OMCO-Emrock Lease Agreement - binding to international tribunals
November 2015 might, of course, provide more or less compelling evidence
as to the existence of a relevant fact or domestic state of
affairs. But it does not have the " preclusive effect."

In the circumstances, therefore, there was no

decision by the first Tribunal between the parties
Waste Management v.
which would constitute a res judicata as to the
Mexico (II) Cause of action between Donald &
merits of the claim now before us.
ICSID Case No. Daisy are different from that of Sutton
ARB(AF)/00/3, 26 Holdings'
Judicial decision is only res judicata if it is between
June 2002
the same parties and concerns the same question
as that previously decided.
"it is certain that it is almost always necessary to
Chorzow Factory
refer to the statement of reasons to understand
Case PCIJ, Series A,
clearly the operative part and above all to
No. 13, p. 27
understand the causa petendi."
it could not be asserted in the light of the evolution
Sempra v. Argentina of international law, that shareholders that qualify as
the treaties provide similar rights to
ICSID, Decision on protected investors within the scope of the system
shareholders having indirect
Objections to for protecting foreign investors are prevented from
ownership or control, or who are not
Jurisdiction, 11 May claiming their rights, even when the harm has been
majority shareholders
2005, para.154 inflicted on the company in which they participate.
153
Thereby, investors who formally satisfy the definition
of “Investor,” yet have no real economic connection
with the home State (“mailbox” companies), are
excluded from the treaty benefits
The Committee does not consider that the line of
EDF and others v. decisions in the International Court of Justice,
Argentina beginning with Barcelona Traction, lays down a
ICSID, Decision on general principle of international law which
Annulment, 5 February precludes investors like the Claimants from
2016, para.256 maintaining a claim under the terms of a BIT if those
terms are wide enough to permit them to do so.
 Interpreted in conformity with the canons of treaty
law, they prescribe that rights and interests of
El Paso v. Argentina
foreign shareholders, in casu El Paso’s
ICSID, Award, 31
shareholdings in the Argentinian companies, are
October 2011, para.213
protected regardless of whether they are majority or
minority participations.
Relying on the specific language of the
Argentina-France BIT, as well as that of the
Suez v. Argentina
Argentina-Spain BIT which also gives shareholders
ICSID, Decision on
standing to have recourse to arbitration to protect
Jurisdiction, 16 May
their shares, the Tribunal finds that Suez, AGBAR,
2006, para.49, para.51
and InterAguas have standing to bring this
arbitration.
However, there can be no doubt that most, if not all,
such cases are immersed in the same trend
discussed above in the context of international law
and the meaning of the 1965 Convention. In the The Tribunal can therefore conclude
CMS Gas Transmission
present case, the Claimant has convincingly that there is no bar to the exercise of
Company v. Republic of
explained that notwithstanding the variety of jurisdiction in light of the 1965
Argentina, ICSID Case
situations in ICSID's jurisprudence noted by the Convention and its interpretation as
No. ARB/01/8, Award
Republic of Argentina, the tribunals have in all such reflected in its drafting history, the
on Jurisdiction, 17 July
cases been concerned not with the question of opinion of distinguished legal writers
2003
majority or control but rather whether shareholders and the jurisprudence of ICSID
can claim independently from the corporate entity. In tribunals.
Goetz the tribunal reflected this prevailing trend in
the following terms:

when there is sufficient homogeneity between the

Noble Energy v. claims to justify treating them in the same way
Ecuador without prejudicing the rights of the respondent, the
Respondent’s consent may be presumed.
Elettronica Sicula SpA
(ELSI) (United States of
America v. Italy)
Fraport v. Philippines
Ioannis
Kardassopoulos and
Fuchs v. Georgia
conditions typically concern certain procedural steps
that must be taken before proceedings can be
instituted.725 Under Art. 26, a State may require the
Article 25 – Jurisdiction Procedural Conditions to Consent
exhaustion of local administrative or judicial
remedies as a condition of its consent to arbitration
under the Convention
 Obviously, if the claim relates to denial of justice and
the claimant alleges that he/she has not been able
to exhaust domestic remedies because these are
Aven and others v. nonexistent, illusory or the decision is to be delayed
Costa Rica unjustifiably, then the claimant-victim shall have the
burden to assert this situation to ensure the
admissibility of the international claim, and also to
address the merits of the case.
"A treaty shall be interpreted in good faith in
accordance with the ordinary meaning to be given
VCLT
to the terms of the treaty in their context and in the
light of its object and purpose."
since the claimant's parent company is not a party
Link-Trading Joint to the arbitral proceeding, the tribunal has no
Stock Company v. jurisdiction to make any determination as to its
Standing of corporation &
Republic of Moldova, rights under the BIT; if the parent company wished
shareholders to submit to arbitration
UNCITRAL, Final to make its own claim in arbitration, it would have
Award, 18 April 2002 had to comply with the procedures set forth in the
BIT for initiating such an arbitration

The key to the ELSI decision is that Raytheon and

von Pezold and others Machlett were, in the Court’s description, "in practice
v. Zimbabwe the persons who alone could decide" the disposition
ICSID, Award, 28 July of the company’s assets. This principle - that where
2015, para.321, a company is controlled, legally or factually, by a
para.322, para.323, certain shareholder or group of shareholders, the
para.324, para.325, latter may be entitled to a direct claim inrespect of
the assets of the former-has,
On its face, there is an apparent conflict between
Article 9(b) of the German BIT and Ad Article 2 of
von Pezold and others
the German Protocol. In the light of this ambiguity, it
v. Zimbabwe
is helpful to refer to Article 31(3)(b) of the Vienna
ICSID, Award, 28 July
Convention, which notes that, together with the
2015, para.321,
context, the decision maker shall take into account
para.322, para.323,
"any subsequent practice in the application of the
para.324, para.325,
treaty which establishes the agreement of the
Parties regarding its interpretation".
‘the violation of a State obligation that is owed only among States and that benefits individuals
only reflexively (without a corresponding primary right of that individual against the State) cannot
trigger State responsibility vis-a` -vis that individual, but it might trigger international
responsibility vis-a` -vis the individual’s home State’; Peters, supra note 139, at 167.