Research and development in private law

Research and development in private law

Lawsuit by Dual Nationals Sharing the Nationality of the Host State in International Investment Arbitration

Document Type : Original Article

Authors
Mostafa Afrazandeh 1
MOHAMMAD JAVAD ABDOLLAHI 2
1 Master's degree, Department of Law, Khomeini Shahr Branch, Islamic Azad University, Khomeini Shahr, Iran
2 Assistant Professor, Department of Law, Khomeini Shahr Branch, Islamic Azad University, Khomeini Shahr, Iran
10.22034/jpl.2025.2073611.1250
Abstract
Foreign investment is an important factor in the economic development of various countries in the world, especially for developing countries, and therefore, various countries through concluding bilateral treaties with other countries, try to provide more favorable investment conditions for nationals of the contracting state. In this regard, since foreign investors are usually not optimistic about the domestic courts of the host countries, and always give the possibility of their orientation in favor of the host countries, reference to the international arbitration institution as an impartial authority for resolving disputes is usually considered in bilateral investment treaties. In this regard, the issue of filing a claim by dual nationals with a common nationality with the host country of the investment in international investment arbitration tribunals has always been one of the most controversial issues in investment arbitrations.In this regard, although the ICSID Arbitration Tribunal has refused to accept the claims of the aforementioned individuals in accordance with the express provision contained in Article 25(2)(a) of this Convention, other arbitration tribunals have adopted different views, considering the conditions foreseen in the relevant bilateral investment treaty and some other factors such as dominant and effective nationality. The findings of this research, which was conducted using a library method and a document retrieval tool and by examining the decisions of arbitration tribunals, confirm that although the ICSID Arbitration Tribunal emphasizes the inadmissibility of claims raised by dual nationals against the host country of the capital, assuming that they have the same nationality as the host country of the capital as the respondent in the case, nevertheless, other arbitral institutions established under the UNCITRAL Arbitration Rules have not followed such an exception and have made decisions depending on the circumstances and requirements of each case. Thus, the disagreements among arbitral institutions continue to increase the importance and complexity of the issue of dual nationality in international investment disputes.
Keywords
ICSID
UNCITRAL
dual nationals
bilateral investment treaty (BIT)
host state
 
Abdollahi, M. J, Karimi, M. (2025.An analysis on the criterion "Assistance to the economic development of the host state" for realizing the concept of investment contracts under the ICSID Arbitration Convention, Volume 31, Issue 26, pp.146-161[ in Persian].
Agha Hosseini, M. (1985). A study of the positions and viewpoints of the Islamic Republic of Iran and the US government in Case A/18 of the Iran-US Arbitration Tribunal on Dual Citizenship, International Legal Journal, 4 (4), pp.51-90 [ in Persian].
Alvarez, G.M., Fouret, J., Gerbay, R. (2019). The ICSID Convention, Regulations and Rules A Practical Commentary, UK: Edward Elgar Publishing.
Artamonova, I. (2025). New Developments in International Investment Agreements as Regards Foreign Investors' Obligations In Search of a More Balanced Approach, Germany: Logos Verlag Berlin.
Anvari, M, Ghasemzadeh,S.M, zaheri, A. (2022), A comparative study of the status and positive and negative consequences of dual citizenship in Iranian, Russian and common law,Political Sociology, Volume 5, Issue 9, pp.379-404.[in Persian].
Aust, A. (2010). Handbook of International Law, USA: Cambridge University Press.
Babu, R.R., Burra. S. (2018). Locating India in the Contemporary International Legal Order, India: Springer India.
Baghban, R, Yekta, H. (2022). Criteria for determining the investment contract in foreign investment arbitration, Encyclopedia of Economic Law Journal, Volume 28, Issue, pp. 292-317 (in Persian).
Bafghi, F, Amir, M, Mohsen, M, Bahmani, M, Zare, A. (2021). Substantive Rules of Foreign Investment Arbitrations in the European Union and the Lisbon Treaty. Economic Jurisprudence Studies 3(2): PP. 201-218.[ in Persian].
Bjorklund, A.K. (2016). Yearbook on International Investment Law and Policy 2014-2015, USA: Oxford University Press.
Brown, C. (2013). Commentaries on Selected Model Investment Treaties, United Kingdom: OUP Oxford.
C. L. Lim, Ho, Jean, Paparinskis, Martins (2021), International Investment Law and Arbitration Commentary, Awards and Other Materials, USA: Cambridge University Press. 
Collins, D. (2025). Foundations of International Economic Law Second Edition, UK: Edward Elgar Publishing.
Desmet, E, Vermeulen, G (2019), Essential Texts on European and International Asylum and Migration Law and Policy (2nd revised edition), Netherlands: Gompel & Svacina.
Desmet, E., Vermeulen, G. (2022). Essential Texts on European and International Asylum and Migration Law, Netherlands: Gompel & Svacina.
Dolzer, R., Schreder, C. (2012). Principles of International I Investment Law, Second Edition.
Ebrahimi, Seyed Nasrollah, Soltanzadeh, S. (2014). The Concept of Investment in Arbitration Precedent of the International Center for Settlement of Investment Disputes (ICSID), International Law Review, Volume 31, Issue 50 Spring 2014 Pages 77-108. [ in Persian].
Elsan, M, Negintaji, Z (2023). Challenges of Foreign Investment Arbitration with Emphasis on The Iranian Legal System, Legal Reserch, Volume 22, Issue 55, pp.115-139. [ in Persian ].
Garcia Olmedo, J. (2017). Claims by Dual Nationals Under Investment Treaties: Are Investors Entitled to Sue Their Own States?, Forthcoming, The Journal of International Dispute Settlement , Available at SSRN: https://ssrn.com/abstract=3043229, pp. 1-42.
Harwood, M., Batifort, S., Trahanas, C. (2015). Investment Arbitration: Jurisdiction and Procedure, The International Arbitration Review 1 (James H. Carter ed., Law Business Research), Available at SSRN: https://ssrn.com/abstract=3047865, pp. 1-24.
Herdegen, M. (2024). Principles of International Economic Law, 3e, United Kingdom: OUP Oxford.
J. Tams, C, Sloan, J. (2013).  The Development of International Law by the International Court of Justice, United Kingdom: OUP Oxford.
Javagal, S. (2024). Bilateral investment treaties: fostering international investment while preserving national sovereignty, Available at SSRN: https://ssrn.com/abstract=4859596 or http://dx.doi.org/10.2139/ssrn.4859596, pp. 1-8.
U. Kannof, A. (2011). Dueling Nationalities: Dual Citizenship, Dominant & Effective Nationality, and the Case of Anwar Al-Aulaqi, Emory International Law Review, Vol. 25, No. 3,  Available at SSRN: https://ssrn.com/abstract=1940114, PP. 1371-1430.
Kazemianzadeh, P, Abdolahi, M, Abbasni, S (2023). The Role of the ICSID Convention in the Arbitration and Development of Economic Investment, Economic Jurisprudence Studies, Orchid Code: 0000-0003-2106-5797, PP.121-140 [ in Persian].
Koluman, E. (2020). The Nationality of the Investor in International Investment Arbitration and the Dual Nationality Problem, https://acta.bibl.u-szeged.hu/72785/1/forum_doctorandorum_2020_039-062.pdf, pp. 39-62.
Klabbers, J. (2016).  International Law Documents, United Kingdom: Cambridge University Press.
Kulick, Andreas (2024), General International Law in International Investment Law A Commentary, United Kingdom: OUP Oxford.
Pilvar,R, Sari, M. (2024), Causes of pathological clauses in international commercial arbitration and ways to deal with them by looking at WIPO arbitration clause, Journal of Research and Development in Private Law Iranian Law and Legal Research Institute, 1(1), pp. 79-109 doi: 10.22034/jpl.2024.718551 [ in Persian].
Mashhadizadeh, A, Ghodratnama Shabestari, A.H, (2023), Assigning Responsibility to States in the ICSID Arbitration Procedure, International Law Review, Volume 40, Issue 70, Serial Number 7, PP. 107-132 [in Persian].
Mafi, H, Afshar Vangini, R. (2022). Establishment of Commercial Courts in line with the Principle of Speed in Court Proceedings, Research and development in comparative law, 5(14), PP.160-184. doi: 10.22034/law.2022.547910.113 [ in Persian].
Mir Mohammadi, S.M., Khamisizadeh, M (2020). Reform in the Structure of the Investor- State Dispute Settlement and Feasibility Study on the Establishment of the International Investment Permanent Court, Comparative Law, Volume 7, Issue 1, Serial Number 13 , Issue 13, PP.295-322.[in Persian].
Mousavi, Z, Agha Hosseini, M. (2007).The Burden and Standard of Proof in the Case Law of the Iran-United States Claims Tribunal, The Global Community, Vol. 1, Available at SSRN: https://ssrn.com/abstract=2226971, pp. 105-124.
Mutsau, S. (2017). Revisiting Bilateral Investment Treaties in the 21st Century. A Kenyan and South African Experience, Hamburg: Anchor Academic Publishing.
N. Brower, C, D. Brueschke, J. (2023). The Iran-United States Claims Tribunal, Netherlands: Brill.
Osaghae, Osa-godwin, M Cooney, Thomas. (2024).  From Immigrant to Transnational Diaspora Entrepreneur: The Roles of Enclaves In Their Entrepreneurial Journey, USA: World Scientific Publishing Company.
Paul, N., Segger, M.C.C., Gehring, M.W. (2011). Sustainable Development in World Investment Law, Netherland: Kluwer Law International.
Petsche, M. (2024). The Concept of Investment in ICSID Arbitration, Oxford University Press.
Rajput, A. (2021). Handbook on Investment Arbitration in India, India: Centre for Arbitration and Research, Maharashtra National Law University Mumbai.
Ramić, A, Brodlija, F. (2025). International Investment Law and Dispute Resolution in the Western Balkans Regional Prospects for a European Future, Netherlands: Brill. 
Rovine, A.W. (2013). Contemporary Issues in International Arbitration and Mediation: The Fordham Papers (2012), Netherlands: Brill.
Rubins, N. D., Nektarios Papanastasiou, T., & Kinsella, N. S. (2020).  International Investment, Political Risk, and Dispute Resolution A Practitioner's Guide, USA: Oxford University Press.
Rust, A., Kofler, G., Pantazatou, K., Lyons, T., C. Haslehner, W. (2023). Alternative Dispute Resolution and Tax Disputes, USA: Edward Elgar Publishing Limited.
Singh, K., and Ilge, B. (2016). Rethinking Bilateral Investment Treaties Critical Issues and Policy Choices, Netherlands: Both ends.
Shakhani Castle, S. (2022). The position and status of the arbitral tribunal in resolving investment disputes, Modern Jurisprudence and Law, Volume 3, Issue 9, Serial Number 9, pp. 192-167 [in Persian].
Sornarajah, M. (2017). The International Law on Foreign Investment (4th ed.). Cambridge: Cambridge University Press.
Tams, C.J., and Schill, S.W. (2022). International Investment Protection and Constitutional Law, UK: Edward Elgar Publishing Limited.
Treves, E.P. (2017). Investment Treaty Arbitration: Treves, E. P. (2016). Investment Treaty Arbitration: Dual Nationals Are Now Welcome: A Way out of ICSID's Dual Nationality Exclusion. NYUJ Int'l L. & Pol., 49, 607.
Tropper, J., Reinisch, A. (2022). State Silence and International Investment Law. State Silence across International Law (OUP, 2025, Forthcoming). SSRN: https://ssrn.com/abstract=5207884 or http://dx.doi.org/10.2139/ssrn.5207884, PP. 1-53.
Viñuales, J., Waibel, M. (2021). ICSID Reports: Volume 19, United Kingdom: Cambridge University Press.
Zamani, h, Abrishami, A. (2019). The Role of Piercing the Corporate Veil doctrine in determination of foreign investor's nationality in ICSID Arbitration Procedure, Public Law Research, Volume 20, Issue 61, pp. 93-120. [in Persian ].
Send comment about this article
Enter Name.
Enter a valid email address.
Enter a vaid affiliation.
Enter comments (At leaset 10 words)
CAPTCHA Image
Enter Security Code Correctly.