Piercing the Corporate Veil in International Arbitration

Global Business Law Review, Vol. 1, p. 169, 2010

18 Pages Posted: 23 Mar 2010 Last revised: 29 Jun 2018

See all articles by Yarik Kryvoi

Yarik Kryvoi

The British Institute of International and Comparative Law (BIICL)

Date Written: March 16, 2010


This article examines the application of the piercing the corporate veil concept in international arbitration. Interpretation of this concept is inconsistent even within one domestic legal system, and it is even less predictable in international arbitration when several legal systems come into play.

Domestic courts are likely not to recognize and enforce an arbitration award piercing the corporate veil in the absence of a written arbitration agreement. Piercing the corporate veil may help to give a concrete practical meaning to the purpose of an arbitration agreement or a bilateral investment treaty. However, there are downsides of such piercing because it negates many of the benefits, which the corporate form offers.

Jurisprudence under the International Centre for Settlement of Investment Disputes (“ICSID”) Convention allows one to avoid the enforcement problem. However, the approaches of ICSID tribunals are inconsistent. This article identifies several major conceptual approaches ICSID tribunals took in the past towards piercing the corporate veil. Some tribunals declined jurisdiction in the absence of an explicit arbitration agreement. Other tribunals pierced the corporate veil by looking into the issue of foreign control. ICSID tribunals also pierced the veil on the basis of interpretation of the concept of “investment” in accordance with the intent of parties to the arbitration agreement or purpose of an international treaty.

The practical advice offered by this article is to make written arbitration clauses as inclusive as possible, to avoid dealing with piercing the corporate veil altogether.

Keywords: ICSID, ICC, Piercing the Corporate Veil, Lifting the Veil, Unlimited Corporate Liability

JEL Classification: F21, K33, K40

Suggested Citation

Kryvoi, Yarik, Piercing the Corporate Veil in International Arbitration (March 16, 2010). Global Business Law Review, Vol. 1, p. 169, 2010, Available at SSRN: https://ssrn.com/abstract=1572634

Yarik Kryvoi (Contact Author)

The British Institute of International and Comparative Law (BIICL) ( email )

Charles Clore House
17 Russell Square
London, WC1B 5JP
United Kingdom

HOME PAGE: http://www.kryvoi.net

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