|1998 Measures||The various measures adopted by certain Colombian agencies (namely the Central Bank, Fogafin and the Superintendency) with respect to Granahorrar over the course of 1998|
|2014 Constitutional Court Order||Order 188/14 of the Constitutional Court, dated 25 June 2014|
|AA Designation Request||Claimants’ request that the Secretary-General of the PCA designate an appointing authority pursuant to Article 6 of the UNCITRAL Rules, submitted on 5 April 2018|
|Answer on Jurisdiction||Respondent’s Answer on Jurisdiction, dated 21 October 2019|
|Capitalization Order||The Superintendency’s order, issued by letter of 2 October 1998, that Granahorrar be re-capitalized|
|Carrizosa Family||Claimants and their parents, Mrs Astrida Benita Carrizosa and Mr Julio Carrizosa Mutis|
|Central Bank||The Colombian Banco de la República|
|Challenge||Claimants’ challenge to Prof. Zachary Douglas QC, notified on 8 March 2018|
|Claimants||Alberto Carrizosa Gelzis, Felipe Carrizosa Gelzis and Enrique Carrizosa Gelzis|
|Claimants’ Observations on the US Submission||Claimants’ Observations concerning Non-Disputing Party Submission of the United States of America, dated 15 May 2020|
|Colombia or Respondent||The Republic of Colombia|
|Colombia-India BIT||Agreement for the Promotion and Protection of Investments between the Republic of Colombia and the Republic of India, dated 2 July 2012|
|Colombia-Switzerland BIT||Agreement between the Republic of Colombia and the Swiss Confederation on the Promotion and Reciprocal Protection of Investments, dated 6 October 2009|
|Constitutional Court Judgment||Judgment SU.447/11 of the Constitutional Court, dated 26 May 2011|
|Council of State Judgment||Judgment of the Fourth Section of the Council of State, dated 1 November 2007|
|Critical Dates||25 June 2014, the date of issuance of the 2014 Constitutional Court Order, and 24 January 2018, the date on which Claimants submitted their claim to arbitration|
|Fogafín||The Colombian Fondo de Garantías de Instituciones Financieras|
|Fogafín Covenant||Covenant concluded between Fogafin and Granahorrar, dated 6 July 1998|
|Granahorrar||Corporación Grancolombiana de Ahorro y Vivienda "GRANAHORRAR"|
|Hearing||The Hearing on Jurisdiction in this arbitration, held by videoconference on 14-18 December 2020|
|IACHR||The Inter-American Commission on Human Rights|
|ICJ||The International Court of Justice|
|ICSID||The International Centre for Settlement of Investment Disputes|
|Memorial on Jurisdiction||Claimants’ Memorial on Jurisdiction, dated 29 May 2019|
|Notice of Arbitration||Claimants’ Notice of and Request for Arbitration, dated 24 January 2018|
|Parties||Claimants and Respondent|
|PCA||The Permanent Court of Arbitration|
|Procedural Order No. 1||Procedural Order No. 1, issued by the Tribunal on 29 January 2019|
|Procedural Order No. 2||Procedural Order No. 2, issued by the Tribunal on 6 April 2020|
|Procedural Order No. 3||Procedural Order No. 3, issued by the Tribunal on 11 November 2020|
|Procedural Order No. 4||Procedural Order No. 4, issued by the Tribunal on 26 November 2020|
|Rejoinder on Jurisdiction||Respondent’s Rejoinder on Jurisdiction, dated 16 March 2020|
|Reply on Jurisdiction||Claimants’ Reply to Respondent’s Answer on Jurisdiction, dated 20 December 2019|
|Respondent’s Observations on the Submission||US Respondent’s Written Observations on the United States’ Non-Disputing Party Submission, dated 15 May 2020|
|Response to the Notice of Arbitration||Respondent’s Respuesta a la Solicitud de Arbitraje de los Reclamantes, dated 23 February 2018|
|Submission of the United States||The United States’ written submission in this arbitration, dated 1 May 2020|
|Superintendency||The Colombian Superintendencia Bancaria, later known as the Superintendencia Financiera|
|Terms of Appointment||Terms of Appointment, adopted by the Tribunal and the Parties on 15 February 2019|
|Treaties||The US-Colombia TPA, the Colombia-India BIT and the Colombia-Switzerland BIT|
|UNCITRAL Rules||The Arbitration Rules of the United Nations Commission on International Trade Law, as revised in 2013|
|UNCITRAL Transparency Rules||UNCITRAL Rules on Transparency in Treaty-Based Investor-State Arbitration, as adopted by UNCITRAL on 11 July 2013|
|US-Colombia TPA/TPA/Treaty||United States - Colombia Trade Promotion Agreement, signed on 22 November 2006 and entered into force on 15 May 2012|
|US$||United States dollar|
|VCLT||The 1969 Vienna Convention on the Law of Treaties|
Mr Pedro J. Martínez-Fraga
Mr C. Ryan Reetz
Mr Craig O’Dear
Mr Mark Leadlove
Ms Rachel Chiu
Mr Domenico Di Pietro*
Bryan Cave Leighton Paisner LLP
200 South Biscayne Boulevard. Suite 400
Mr Joaquín Moreno Pampín
Av. El Poblado, Ed.
One Plaza, Suite 202
* As of 23 April 2021, Mr Domenico Di Pietro no longer works at Bryan Cave Leighton Paisner LLP
Mr Camilo Gómez Alzate
Mrs Ana María Ordóñez Puentes
Mr Andrés Felipe Esteban Tovar*
Agenda Nacional de Defensa Jurídica del Estado
Carrera 7 No. 75-66 - 2do y 3er piso
Mr Paolo Di Rosa
Ms Katelyn Horne
Mr Brian Vaca
Ms Natalia Giraldo-Carrillo
Arnold & Porter Kaye Scholer LLP
601 Massachusetts Avenue NW
Washington, DC 20001, USA
Mr Patricio Grané Labat
Arnold & Porter Kaye Scholer LLP
25 Old Broad Street
London EC2N 1HQ, UK
* As of January 2021. Mr Andrés Felipe Esteban Tovar no longer works for the Agencia Nacional de Defensa Jurídica del Estado.
By a Notice of and Request for Arbitration dated 24 January 2018 (the "Notice of Arbitration"), Claimants commenced arbitration proceedings against Respondent pursuant to Article 3 of the Arbitration Rules of the United Nations Commission on International Trade Law, as revised in 2013 (the "UNCITRAL Rules"); Articles 12.1, 12.2 and 12.3 of the United States - Colombia Trade Promotion Agreement, signed on 22 November 2006 and entered into force on 15 May 2012 (the "US-Colombia TPA", the "TPA" or the "Treaty"); Articles 1, 3(2), 3(3), 3(4), 4 and 6 of the Agreement for the Promotion and Protection of Investments between the Republic of Colombia and the Republic of India, dated 2 July 2012 (the "Colombia-India BIT") and Article 11 of the Agreement between the Republic of Colombia and the Swiss Confederation on the Promotion and Reciprocal Protection of Investments, dated 6 October 2009 (the "Colombia-Switzerland BIT" and, together with the US-Colombia TPA and the Colombia-India BIT, the "Treaties"). The Notice of Arbitration was received by Respondent on 25 January 2018.
On 5 April 2018, Claimants (i) informed the Permanent Court of Arbitration (the "PCA") that the Parties had not been able to agree on an appointing authority; (ii) requested that the Secretary-General of the PCA designate an appointing authority pursuant to Article 6 of the UNCITRAL Rules (the "AA Designation Request"); and (iii) confirmed their intention to pursue the Challenge before the appointing authority. At the PCA's request, Claimants provided further information on the AA Designation Request to the Secretary-General on 9 April 2018.
Between 9 and 27 April 2018, the Parties exchanged correspondence with regard to the AA Designation Request. Among other things, Respondent argued that Article 10.19 of the US-Colombia TPA expressly designates the Secretary-General of the International Centre for Settlement of Investment Disputes ("ICSID") as the only appointing authority; whereas Claimants stated that they had premised their case on Chapter 12 of the US-Colombia TPA.
On 16 January 2019, the Tribunal and the Parties held a first procedural meeting via telephone conference, following which the Tribunal issued Procedural Order No. 1 on 29 January 2019. Section 3.3 of Procedural Order No. 1 and the Procedural Calendar set out in Annex 1 of the same order were amended on 22 March 2019, further to the agreement of the Parties. The Procedural Calendar, including the dates scheduled for the Hearing on Jurisdiction (the "Hearing"), was amended on 28 May 2019, 11 June 2019, 4 December 2019 and 22 June 2020.
Pursuant to Section 10.1 of Procedural Order No. 1, and by agreement of the Parties, the arbitration is conducted in accordance with the UNCITRAL Rules on Transparency in Treaty-Based Investor-State Arbitration, as adopted by UNCITRAL on 11 July 2013 (the "UNCITRAL Transparency Rules"), in accordance with Article l(2)(a) thereof, with the PCA assuming the role of the "repository" foreseen under the UNCITRAL Transparency Rules with respect to this arbitration.
Between 13 and 22 May 2020. and further to the Tribunal's invitation, the Parties and the United States submitted their views with regard to the need to make redactions to the Submission of the United States, Claimants' Observations on the US Submission and Respondent's Observations on the US Submission prior to their publication on the PCA’s website pursuant to Article 3 of the UNCITRAL Transparency Rules. Inter alia, the United States noted:
... in the interest of transparency the United States’ practice is to put its non-disputing Party submissions in investor-State arbitrations on the U.S. Department of State's web site, and it intends to do the same for the submission in this case as well.
On 6 April 2020, the Tribunal issued Procedural Order No. 2, whereby it granted leave to Claimants to call evidence from (i) Messrs. Alberto, Felipe and Enrique Carrizosa Gelzis, but strictly on matters going to the Tribunal’s jurisdiction ratione personae only; (ii) Mr Olin Wethington; and (iii) Prof. Loukas Mistelis. The Tribunal further directed that evidence to be given by any witness or expert whom Claimants called to testify at the Hearing should be limited strictly to the issues of jurisdiction upon which the Tribunal was to be addressed.
The global health situation permitting, the Hearing on Jurisdiction will be held in person in Washington. D.C. Should it become unfeasible to conduct the Hearing in person, it will take place by video conference in the week commencing December 14, 2020.
On 11 November 2020, the Tribunal issued Procedural Order No. 3, convening the Hearing and establishing the Hearing schedule as well as its technical, organizational and other ancillary aspects.
On 26 November 2020, the Tribunal issued Procedural Order No. 4, in which it (i) determined that it was unnecessary to depart from, or otherwise vary, its decision of 23 September 2020 to admit into the record for the Hearing the expert reports of Drs. Briceño and Ibáñez; and (ii) denied Claimants' application for leave to file the hearing transcripts and video recordings of the examinations of Drs. Ibáñez and Briceño in the ICSID Proceedings.
Mr John Beechey CBE (Presiding Arbitrator)
Professor Franco Ferrari
Mr Christer Söderlund
Assistant to the Tribunal
Alberto Carrizosa Gelzis
Felipe Carrizosa Gelzis
Enrique Carrizosa Gelzis
Pedro J. Martínez-Fraga
C. Ryan Reetz
Craig S. O’Dear
Domenico Di Pietro
Bryan Cave Leighton Paisner LLP
Camilo Gómez Alzate
Ana María Ordóñez Puentes
Andrés Felipe Esteban Tovar
Giovanny Andrés Vega Barbosa
Elizabeth Prado López
María Angélica Velandia
Agencia Nacional de Defensa Jurídica del Estado
Dina María Olmos Aponte
Fondo de Garantías de Instituciones Financieras
Juan Pablo Buitrago León
Manuela Barrera Rego
Banco de la República
Paolo Di Rosa
Patricio Grané Labat
Arnold & Porter LLP
The United States of America (Non-Disputing Party)
Lisa J. Grosh
John D. Daley
Nicole C. Thornton
John I. Blanck
US Department of State
Permanent Court of Arbitration (Registry)
José Luis Aragón Cardiel
Markel Eguiluz Parte
Faraz Khan Law in Order
On 23 April 2021, the Tribunal requested that the Parties advise whether they would be content to receive its upcoming ruling only in electronic form, and signed electronically by the members of the Tribunal, for the purposes of Article 34(6) of the UNCITRAL Rules. The Parties confirmed their agreement with the Tribunal's proposal by separate communications of 27 April 2021.
Reserving their right to amend, supplement, or otherwise restate their claims and the relief requested in connection with such demand, claimants request an award granting, without limitation, the following relief:
(i) A declaration that Colombia has violated the Treaties, customary international law. and Colombian law with respect to claimants’ investments;
(ii) Compensation to claimants for all damages that it has (sic) suffered, to be developed, and quantified in the course of this proceeding, but including, without limitation, compensation for the wrongful expropriation of claimants’ investments, and damages for Colombia’s failure to provide claimants and their investments fair and equitable treatment, national treatment, fair judicial recourse, and for its arbitrary and discriminatory interference with claimants’ use and enjoyment of its investments;
(iii) Such compensation, exclusive of attorney’s fees and costs must be no less than USD 323.393.712.81;
(iv) All costs and fees associated with this proceeding, including all professional fees and disbursements;
(v) An award of compound interest until the date of Colombia’s final satisfaction of the award at a rate to be fixed by the Tribunal; and
(vi) Such other relief as counsel may advise and the Tribunal may deem appropriate.79
For the foregoing reasons, authority, premises, and evidence. Claimants. Alberto Carrizosa. Felipe Carrizosa. and Enrique Carrizosa. respectfully request that this Arbitral Tribunal deny Respondent’s, the Republic of Colombia['s], objections as to jurisdiction, and proceed to a merits hearing in furtherance of the equitable administration of justice.80
For the foregoing reasons, authority, premises, and evidence. Claimants. Alberto Carrizosa Gelzis. Felipe Carrizosa Gelzis. and Enrique Carrizosa Gelzis. respectfully request that this Arbitral Tribunal reject Respondent’s, the Republic of Colombia['s], objections to jurisdiction, and proceed to a merits hearing in furtherance of the equitable administration of justice.81
92. Por las razones antes expuestas, Colombia solicita respetuosamente al Tribunal que:
1. Tomando en cuenta la seriedad de las objeciones a la jurisdicción de los reclamos de los Reclamantes anticipadas en la sección "OBJECIONES A LA JURISDICCIÓN", supra, y de conformidad con los artículos 10.20(4) del APC y 23 del Reglamento CNUDMI, ordene la bifurcación del procedimiento para decidir estas objeciones de forma previa.
2. Rechace su jurisdicción.
3. Si, par impossible, el Tribunal decide rechazar la solicitud de bifurcación o aceptar que tiene jurisdicción total o parcialmente, rechace en su totalidad los reclamos de los Reclamantes; y
4. Condene a los Reclamantes a reembolsar a Colombia el pago de todos los gastos y costos en los que haya tenido que incurrir en razón de esta controversia.82
For the foregoing reasons. Colombia respectfully requests that the Tribunal:
a. render an award dismissing Claimants' claims in their entirety, for lack of jurisdiction; and
b. order Claimants to pay all of Colombia's costs, including the totality of the arbitral costs that Colombia incurred in connection with this proceeding, as well as the totality of its legal fees and expenses.83
For the foregoing reasons. Colombia respectfully requests that the Tribunal:
a. render an award dismissing Claimants’ claims in their entirety, for lack of jurisdiction; and
b. order Claimants to pay all of Colombia’s costs, including the totality of the arbitral costs incurred by Colombia in connection with this proceeding, as well as the totality of Colombia's legal fees and expenses, plus interest.84
In sum. Claimants’ claims: (i) are based on events that took place years before the entry into force of the TPA, as a result of which jurisdiction ratione temporis is lacking in this case...; (ii) are not subject to arbitration under the TPA, as a result of which there is also no jurisdiction ratione voluntatis...; (iii) are not asserted by foreign investors as required by the TP A. as a result of which there is an absence of jurisdiction ratione personae...; and (iv) do not concern a qualifying "investment." as defined in the TPA, as a result of which there is an equally fatal absence of jurisdiction ratione materiae... At the very least, it is plain that the level of certainty of the State’s consent required by public international law. and recognized by the ICJ, is not attained in the instant case. The totality of Claimants’ claims must therefore be dismissed on one or more of the above-mentioned jurisdictional grounds.85
Memorial on Jurisdiction, paras. 162-170, 178; Case Concerning Oil Platforms Oil Platforms (Islamic Republic of Iran v. United States of America), 1996 ICJ 803, 856, 12 December 1996 (Separate Opinion of Judge Higgins), paras. 32-34 (CLA-0016).
Memorial on Jurisdiction, paras. 171, 174; citing Impregilo S.p.A v. Islamic Republic of Pakistan, ICSID Case No. ARB/03/3, Decision on Jurisdiction, 22 April 2005, para. 254 (CLA-0039) (emphasis in original); Phoenix Action Ltd. v. The Czech Republic, ICSID Case No. ARB/06/5, Award, 15 April 2009, para. 62 (CLA-0061).
In particular, Claimants reject the proposition that a claimant should discharge the burden of proving all essential facts required to establish jurisdiction over its claims.95 In Claimants' view, such approach, "[g]lossing over foundational distinctions blurs material presumptions endemic to procedural and substantive adjudications, among other considerations".96 Claimants further reject the alternative approach under which neither party would bear the burden of proof for assessing a jurisdictional challenge and the tribunal would "determine its jurisdiction without being bound by the argument of the parties".97 Lastly, Claimants consider it inappropriate to draw a distinction between facts which are specifically relevant for the jurisdictional question and facts which are also relevant to a determination of the substance of the dispute, while also asserting the claimant's burden of proving the facts required to establish jurisdiction, insofar as they are contested by the respondent.98 In Claimants' view, this approach, "places the entire burden on tire Claimant excising at the jurisdictional stage only a Claimant's obligation to prove from an evidentiary perspective merits related facts".99
Memorial on Jurisdiction, para. 145; National Gas S.A.E. v. Arab Republic of Egypt, ICSID Case No. ARB/11/7, Award, 3 April 2014 (CLA-0055).
Memorial on Jurisdiction, para. 148.
Memorial on Jurisdiction, para. 149; Saipem S.p.A. v. People's Republic of Bangladesh, ICSID Case No. ARB/05/7, Decision on Jurisdiction and Recommendation on Provisional Measures, 21 March 2007 (CLA-0074). See also, Memorial on Jurisdiction, paras. 151-155; Muhammet Çap Sehil Inşaal Endustri ve Ticaret Ltd. Sti. v. Republic of Turkmenistan, ICSID Case No. ARB/12/6, Decision on Respondent’s Objection to Jurisdiction under Article VII(2) of the Turkey-Turkmenistan Bilateral Investment Treaty, 13 February 2015, paras. 119-121 (CLA-0053); Spence International Investments, LLC, Berkowitz, et al. v. Republic of Costa Rica, ICSID Case No. UNCT/13/2, Interim Award, 25 October 2016, para. 239 (CLA-0084).
Memorial on Jurisdiction, para. 156; Blue Bank International & Trust (Barbados) Ltd. v. Bolivarian Republic of Venezuela, ICSID Case No. ARB/12/20, Award, 26 April 2017, paras. 65-66 (CLA-0014).
Memorial on Jurisdiction, para. 157.
According to Respondent, Claimants have misstated the burden of proof that should apply in relation to jurisdictional issues.100 Instead, it relies on the principle actori incumbit onus probandi, codified in Article 27(1) of the UNCITRAL Rules,101 which it says leaves the burden of proof with Claimants at all times throughout the jurisdictional phase. If they are successful in establishing jurisdiction, then the burden to show that, notwithstanding the facts proved by Claimants, the Tribunal lacks jurisdiction shifts between the Parties, as described by the tribunal in Spence v. Costa Rica :
[t]he burden is therefore on the Claimants to prove the facts necessary to establish the Tribunal’s jurisdiction. If that can be done, the burden will shift to the Respondent to show why, despite the facts as proved by the Claimants, the Tribunal lacks jurisdiction.102
Answer on Jurisdiction, para. 145.
Answer on Jurisdiction, para. 146; Blue Bank International & Trust (Barbados) Ltd. v. Bolivarian Republic of Venezuela, ICSID Case No. ARB 12/20, Award, 26 April 2017, para. 66 (CLA-0014) ("... the Claimant bears the burden of proving the facts required to establish jurisdiction, insofar as they are contested by the Respondent"). See also Respondent’s Observations on the US Submission, para. 16.
Answer on Jurisdiction, para. 147; citing Spence International Investments, LLC, Berkowitz, et al. v. Republic of Costa Rica, ICSID Case No. UNCT/13/2, Interim Award, 25 October 2016, para. 239 (CLA-0084). See also, Respondent’s Observations on the US Submission, para. 16.
Respondent disputes Claimants’ proposition that the Tribunal should accept their allegations pro tem,105 as it is based "on the unsupported notion that they have an inherent right to have their case on the merits heard"106 and is incorrect as a matter of law.107 On the contrary, Respondent argues that "a State's consent to arbitration shall not be presumed",108 and that a tribunal "must conclusively determine all issues that are necessary to establish its jurisdiction, including by making all necessary factual findings".109
Answer on Jurisdiction, para. 149.
Answer on Jurisdiction, para. 150.
Answer on Jurisdiction, paras. 149-150.
Answer on Jurisdiction, para. 151; citing ICS Inspection and Control Services Ltd. v. Argentine Republic, PCA Case No. 2010-9, Award on Jurisdiction, 10 February 2012, para. 280 (RLA-0034).
Answer on Jurisdiction, para. 151; citing Société Générale de Surveillance S.A. v. Republic of Paraguay, ICSID Case No. ARB/07/29, Decision on Jurisdiction, 12 February 2010, para. 58 (CLA-0080).
Answer on Jurisdiction, para. 160; Société Générale de Surveillance S.A. v. Republic of Paraguay, ICSID Case No. ARB/07/29, Decision on Jurisdiction, 12 February 2010, para. 58 (CLA-0080).
Answer on Jurisdiction, para. 393; Merge Case—Decision No. 55, UN Italian-United States Conciliation Commission, Decision, 10 June 1955, p. 247 (CLA-0047); Michael Ballantine and Lisa Ballantine v. Dominican Republic, PCA Case No. 2016-17, Final Award, 3 September 2019, para. 539 (RLA-0088).
As to how exactly the Tribunal should detemine which nationality is dominant, Respondent considers that the Treaty's provision on applicable law permits the Tribunal to "find guidance in the factors previously applied by international courts and tribunals, both in the context of customary international law and of the investment jurisprudence."133 Reviewing the decisions issued in such matters,134 Respondent argues that the Tribunal should consider the following elements to determine Claimants’ dominant nationality:
(i) the location of Claimants’ permanent and habitual residence: (ii) the center of Claimants’ economic lives; (iii) the center of Claimants' family, social and political lives; and (iv) how Claimants have identified themselves."135 These elements, the Respondent claims, will enable the Tribunal to "compare the relative strength of Claimants' ties to Colombia and the United States.136
Answer on Jurisdiction, para. 397.
Nottebohm Case, ICJ, Second Phase, Judgment, 6 April 1955, p. 22 (CLA-0057); Michael Ballantine and Lisa Ballantine v. Dominican Republic, PCA Case No. 2016-17, Final Award, 3 September 2019, para. 545 (RLA-0088); Merge Case—Decision No. 55, UN Italian-United States Conciliation Commission, Decision, 10 June 1955, p. 247 (CLA-0047); Case No. A/18, IUSCTR, Decision, 6 April 1984, p. 12 (RLA-0089); see also Benny Diba and Wilfred J. Gaulin v. Islamic Republic of Iran, et al., IUSCT Case No. 940, Award, 31 October 1989, para. 11 (RLA-0090).
Answer on Jurisdiction, para. 398.
Answer on Jurisdiction, para. 401.
Respondent asserts that "Claimants make no attempt to prove that their dominant nationality was that of the US on any of the relevant dates"147 and that, after their Reply on Jurisdiction, they have "failed to satisfy their burden of proving their dominant nationality through documentary evidence".148 Relying on jurisprudence of the Iran-US Claims Tribunal, Respondent contends that "unsupported witness statements are insufficient to satisfy a claimant's burden of proving that it is 'more foreign than national'."149
Answer on Jurisdiction, para. 408 (emphasis by Respondent).
Rejoinder on Jurisdiction, para. 347.
Rejoinder on Jurisdiction, para. 351; Reza and Shahnaz Mohajer-Shojaee v. Islamic Republic of Iran, IUSCT Case No. 273, Award, 5 October 1990, para. 9 (RLA-0120); Benny Diba and Wilfred J. Gaulin v. Islamic Republic of Iran, IUSCT Case No. 940, Award, 31 October 1989, para. 24 (RLA-0090), Ninni Ladjevardi (formerly Burgel) v. Islamic Republic of Iran, IUSCT Case No. 118, Award, 8 December 1993, para. 48 (RLA-0119); Alex Arijad v. Islamic Republic of Iran, IUSCT Case No. 413, Award, 22 April 1991, para. 10 (RLA-0121).
[t]hese differences matter because the principles of law governing diplomatic protection are devoid of elements, such as the expectation of investors, the bona fide nature and character of an investor, as well as the limiting qualifications that necessarily pertain to a State's exercise of its regulator, and judicial sovereignty.165
Claimants’ collective and individual testimony establishes that the effectiveness of the bond with Colombia, which is real and genuine, exclusively is determined because it is the situs of Claimants’ business. Most other cultural, social, and educational effective links with Colombia have been minimized to bare essentials, mitigated, or altogether eviscerated. While Claimants certainly recognize the many great cultural contributions that the fine State of Colombia has to offer, and they indeed also share in that rich culture, their preference has been to embrace and to emphasize their U.S. heritage.172
Memorial on Jurisdiction, para. 308; Nasser Espahahanian v. Bank Tejarat, Award, IUSCT Case No. 157 (31.157.2), 29 March 1983 (CLA-0054); Attaollah Golpira v. Islamic Republic of Iran, IUSCT Case No. 211, Award, March 1983 (CLA-0006).
Memorial on Jurisdiction, para. 314.
a) The need to understand that the factors are non-exhaustive,
b) Consideration of Claimants' entire life in the context of whatsoever specific timeframe the Tribunal wishes to analyze,
c) a holistic approach,
d) a qualitative consideration and not a "bean-counting" approach,
e) the effectiveness component must be read qualitatively in terms of its genuineness and legitimacy and not removed merely because the dual nationalities formally comply with law.
f) the factors must be considered in the context of the particular factual matrix of each case.
g) the absence of a single purpose or treaty-shopping scheme must be considered,
h) no single factor, including residency, is determinative, therefore, all are of equal hierarchy, and
i) the "how" and "why" dual nationalities were acquired is of significance.178
Reply on Jurisdiction, paras. 796-799; Benny Diba and Wilfred J. Gaulins v. Islamic Republic of Iran, Iranian Ministry of Housing and Urban Development, IUSCT Case No. 940, Award, 31 October 1989 (RLA-0090).
Even if one were to assume the yet-to-be articulated proposition that "effective" is limited only to the issue of whether there is nationality without more (a restrictive reading that is unsupported), the 'how’ and 'why’ nationality-citizenship was secured in most instances will qualify and contextualize the very much related "dominant" analysis. In a factual setting, such as the one before this Tribunal, the genuineness, longstanding, legitimate, and bona fide, standing of the dual nationals will pervade the Tribunal’s qualitative analysis of the 'dominant’ prong. Try as Respondent may, ostensibly in the name of analytical efficiency, it is not conceptually possible to extract from the elements of the 'dominant’ prong the legitimacy and bona fide nature of those deeply factual factors comprising the 'effective’ component.181
[a] Tribunal may need to examine any factor that may help discern those attributes [for a given nationality], for example, the conduct of a particular State towards the investor, how the investor presented himself or herself, or the reason underlying the investor’s decision to apply for naturalization.182
Answer on Jurisdiction, para. 430; Michael Ballantine and Lisa Ballantine v. Dominican Republic, PCA Case No. 2016-17, Final Award, 3 September 2019, paras. 576-577 (finding that "that during the relevant time [the] center [of the claimants’ economic life] was in the Dominican Republic," inter alia because they had "relocated their economic center... to the country where they resided permanently," and established "their 'main’ business in the Dominican Republic") (RLA-0088); Merge Case—Decision No. 55, UN Italian-United States Conciliation Commission, Decision, 10 June 1955, p. 13 (identifying as a guiding principle whether "the interests and the permanent professional life of the head or the family were established in the United States" (CLA-0047).
Answer on Jurisdiction, para. 444; Michael Ballantine and Lisa Ballantine v. Dominican Republic, PCA Case No. 2016-17, Final Award, 3 September 2019, paras. 576-577 (stating that "that during the relevant time [the] center [of the claimants’ family, and social life] was in the Dominican Republic," because they had relocated "their family center to the country where they resided permanently, Independently of the fact that they often visited the United States, that their children continued their education in the U.S or that they kept social relations in the U.S.") (RLA-0088); Mergé Case—Decision No. 55, UN Italian-United States Conciliation Commission, Decision, 10 June 1955, p. 13 (identifying as a guiding principle inter alia whether "the interests and the permanent professional life of the head or the family were established in the United States" (emphasis added) (CLA-0047).
(i) the TPA provides no specific guidance as to how the Tribunal should interpret the concept of 'dominant and effective nationality', and that pursuant to Article 10.22, Chapter 10, Section B of the TPA, the Tribunal is required to:
"... decide the issues in dispute in accordance with this Agreement and applicable rules of international law."251;
(ii) the applicable rules of international law. which include relevant rules of customary international law, are of mandatory application;252
(iii) only a claimant, that is to say, "an investor of a Party that is a party to an investment dispute with another Party",253 may submit a claim to arbitration;
(iv) Article 12.20, TPA. further defines an 'investor of a Party' as:
a Party or state enterprise thereof, or a person of a Party, that attempts to make, is making, or has made an investment in the territory of another Party; provided, however, that a natural person who is a dual citizen shall be deemed to be exclusively a citizen of the State of his or her dominant and effective nationality.
Respondent suggests 'exclusively’ means that:
what the Tribunal must decide based on all the relevant factors, is whether, if you have to pick only one of the competing nationalities, it makes more sense to deem... Claimants to have been exclusively Colombian or exclusively American on the critical dates.254 (And see (vii) below);
(v) Claimants’ US and Colombian nationalities, which in the case of all three of the Carrizosa brothers, were acquired at birth, are both 'effective’;255
(vi) there is no suggestion that either nationality was obtained by fraud or for the purpose of treaty-shopping;256
(vii) the TPA requires a dual national claimant holding the nationalities of both Parties to the TPA to demonstrate:
(a) that his or her dominant and effective nationality is that of the Party other than that in which the investment has been made; and
(b) such dominant and effective nationality was held by Claimants at the time of the alleged breach(es) by Colombia of its obligations under the Treaty and the date of the introduction of these proceedings (the Critical Dates);257 and
(viii) the Critical Dates in this case are:
(a) 25 June 2014, the date of the Order of the Constitutional Court ("... the State measure that Claimants have alleged as constituting a breach of the Colombia-USA TPA...")258; and
(b) 24 January 2018, being the date of the submission of the claim to arbitration.259
The Tribunal agrees with the Parties' common position that these are relevant criteria for the purposes of its assessment of dominant and effective nationality.
Transcript (English), Day 1, p. 27; see Merge' : "The question of dual nationality obviously arises only in cases where the claimant was in possession of both nationalities at the time the damage occurred..." Mergé Case—Decision No. 55, UN Italian-United States Conciliation Commission, Decision, 10 June 1955, p. 247 (CLA-0047).
... if the investor is a natural person, and that person had the dominant and effective nationality of the respondent Party [in this instance. Colombia] at the time of the submission of the claim, then the investor would not be, at that time, a party to a dispute with another Party (i.e. with a Party other than the investor’s own).260
... there can be no breach, as there was no obligation under the relevant Chapter Ten, Section A provisions as incorporated into Chapter Twelve at the time of the purported breach.261
Where the requisite nationality does not exist at the operative times set out above, the respondent Party has not consented to the submission of the claim to arbitration at the outset and the tribunal therefore lacks jurisdiction ab initio under Article 10.17 [which is incorporated into Chapter Twelve by Article 12.1.2.(b).]262
It appears to the Court that this plea in bar is of fundamental importance and that it is therefore desirable to consider it at the outset.265
In the case of dual nationals, the ICJ observed that in numerous instances in which international arbitrators had to consider whether full international effect was to be attributed to the nationality invoked in the context of the exercise of protection:
They have given their preference to the real and effective nationality, that which accorded with the facts, that based on stronger factual ties between the person concerned and one of the States whose nationality is involved. Different factors are taken into consideration, and their importance will vary from one case to the next: the habitual residence of the individual concerned is an important factor, but there are other factors such as the centre of his interests. his family ties, his participation in public life, attachment shown by him for a given country and inculcated in his children, etc.266
Nottebohm Case, ICJ, Second Phase, Judgment, 6 April 1955, p. 22 (CLA-0057). The test in Nottebohm was adopted by the Iran - US Claims Tribunal in Case No. A/18, IUSCTR, Decision, 6 April 1984, pp. 10-12 (RLA-0089).
... What is relevant in this case is the principle of dominant nationality... [I]t is necessary to determine which of the two (or more) nationalities is the preponderant one.267
effective nationality does not mean only the existence of a real bond but means also the prevalence of that nationality over the other, by virtue of facts which exist in the case.268
... conveys the notion of strength and precedence of one tiling over another and that closeness with a State and the strength of a nationality bond, could be the result of several factors in play such as the time spent by the individual in that country, family and personal attachments, language, education, work, economic or financial attachments, i.e. a cluster of elements that make up the life of an individual and that define several connections to a particular State. We understand 'dominance' as referring to the degree or magnitude in which such connections are stronger than the connections that could also have been built by the individual in relation to another State that has also bestowed its nationality.270
... not only [to] bring evidence in support of [their] allegations, but [...] also [to] convince the Tribunal of their truth, lest they be disregarded for want, or insufficiency, of proof.272
...it is impermissible for the Tribunal to found its jurisdiction on any of the Claimant’s CAFTA claims on the basis of an assumed fact (i.e. alleged by the Claimant in its pleadings as regards jurisdiction but disputed by the Respondent). The application of that "prima facie" or other like standard is limited to testing the merits of a claimant’s case at a jurisdictional stage; and it cannot apply to a factual issue upon which a tribunal’s jurisdiction directly depends... In the context of factual issues which are common to both jurisdictional issues and the merits, there could be. of course, no difficulty in joining the same factual issues to the merits. That, however, is not the situation here, where a factual issue relevant only to jurisdiction and not to the merits requires more than a decision pro tempore by a tribunal.
Accordingly, this Tribunal is here required to determine finally whether it has jurisdiction over the Claimant’s CAFTA claims on the proven existence of certain facts because all relevant facts supporting such jurisdiction must be established by the Claimant at this jurisdictional stage and not merely assumed in the Claimant’s favour.273
a presumption of legitimacy must be accorded to Claimants' allegation that the non-host State represents [their] dominant and effective nationality.274
there is no authority setting forth a test or a methodology for the application of a test that sets forth a hierarchy between and among the various elements to be considered.275
... Obviously, to establish what is the dominant and effective nationality at the date that the claim arose, it is necessary to scrutinize the events in the Claimant's life preceding this date. Indeed, the entire life of the Claimant, from birth, and all the factors which during this span of time, evidence the reality and the sincerity of the choice of national allegiance he claims to have made, are relevant.277
What a person genuinely thinks of himself/herself in terms of dominant and effective nationality, or predominant nationality... is important and part of the exercise... of the testimony. When asked that question, the Tribunal can accord weight to it or accord no weight to it or actually infer that these are duplicitous people who really lie. who really... don’t see themselves that way. It is a factor to be considered, and it cuts in every direction.279
55 years of development and refinement of the customary international law with respect to this doctrine requires the Tribunal to probe behind everyday logistical factors in cases in which the primary place of residence is the host State.281
Every dual national having a primary residence in the host State would be unable to meet the dominant and effective nationality test.282
[T]he reason why we need to live in Colombia is multiple ownings are in Colombian companies and we need to be here [in Colombia] to oversee them.301
I moved to Colombia because of the family business. I felt that I needed to go back to Colombia and be part of the business, especially the operating businesses. We have businesses outside of Colombia, but those are passive investments that I feel don’t require my physical presence. But the Colombian operating companies, those do.315
If someone considers themselves primarily a Colombian citizen, why on God’s good green earth would they be filing tax returns in the [US]?331
Only someone with very deep lies to the United States who does not reside there on a permanent basis would voluntarily elect the obligation and burden... of paying taxes in exchange for not losing their citizenship. Think about it. There’s a big difference. How many people would say. "Heck. I really live in Colombia. I’m really Colombian. Why should I keep the U.S. citizenship if it forces me to pay taxes? That doesn’t make any sense. We have the wherewithal to go there anyway and so what? I mean we don’t need that."332
... all U.S. citizens are required to pay U.S. income tax regardless of where they reside.333
[T]he active part of our business is in Colombia and all the oversight that we do really necessitates being local.338