II. Jus standi before international courts and tribunals
Sovereign States as subjects of international law have jus standi before international adjudicatory bodies. Prior to the advent of investor-State-dispute-settlement (ISDS), international dispute settlement mostly involved State-to-State investment disputes in the form mainly of mixed claims commissions and diplomatic protection.2
Physical and legal persons were traditionally considered not to be subjects of international law. Absent ISDS, such persons could only have their investment claims espoused before an international adjudicatory body by their state of nationality acting on their behalf in diplomatic protection. The alternative would be raising claims before domestic courts.3
III. Jus standi in investor-State dispute settlement
A. Arbitral tribunal's jurisdiction
Direct access to justice is a typical characteristic of ISDS. By agreeing on ISDS clauses in their treaties, States consent to the resolution of investment disputes with the investors of the other contracting party via international arbitration.4 The investor accepts this open offer by filing a request for arbitration, and provided it meets the requirements set forth under the treaty it has jus standi before the arbitral tribunal.5
B. Treaty definitions and other provisions
Treaty definitions and other provisions give content to the investor’s jus standi. The following considerations usually apply across the spectrum of ISDS:
Treaty definitions of “investment” commonly include ownership and control by the investor.11
Treaty definitions of “investment” usually refer to directly as well as indirectly owned or controlled assets. Case-law, therefore, generally allows shareholders to raise claims in their own rights,12 but tends to deny jus standi to entities not closely related to the investment.13
Some treaties also contain provisions (denial of benefits clauses) denying protection to investors with “no substantial business activities”.14
C. Privity of contract and rules of attribution of conduct
Privity of contract establishes that a subject must be a party to a contract to sue or be sued under that contract, but in ISDS it is often the local subsidiary of the investor that concludes the investment contract. While the local subsidiary has no jus standi as per the treaty, the investor might lack privity of contract.15 Case-law is not definitely settled on this issue, especially considering the variety of possible factual circumstances. But an investor owning or controlling (directly or indirectly) an investment, has reasons to argue that it has jus standi before the arbitral tribunal for the State’s alleged interferences with the investment contract amounting to a violation of investment treaty standards.16
A State entity or a State-owned enterprise (lacking jus standi before the investment treaty arbitral tribunal) may also be a party to the investment contract.17 Customary international law rules of attribution codified under the International Law Commission (ILC)’s Draft Articles on Responsibility of States for International Wrongful Acts apply, although these are open to interpretation as a variety of possible real-life business scenarios must be taken into account.18
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