Piercing Corporate Veil in ICSID: Approaches and Reconciliation

Wuhan University International Law Review (Forthcoming)

Chinese Society of International Economic Law, 2013 Annual Meeting, Xi'an China

Posted: 30 Oct 2013 Last revised: 1 Nov 2013

See all articles by Peng Wang

Peng Wang

School of Law, Xian Jiaotong University

Date Written: October 29, 2013


ICISD tribunals’ jurisdiction is premised on the eligible foreign investors, nationals of other contracting state party, with which the host state has agreed to submit pertinent investment disputes to international investment arbitration. The theme of this article is whether or under what conditions can ICSID tribunals pierce veil of pertinent companies to delimit the genuine foreign investors protected by relevant BITs. The article first takes a critical review of the theoretical foundations of Piercing Corporate Veil in ICSID arbitration. In terms of logic premise of tribunal’s decision, “piercing corporate veil” cases in ICSID can be classified into three categories: nationality-agreement jurisdiction mode, nationals of host state as controlling shareholders mode, corporations as a form of investment mode. Investment tribunals should reconcile divergent approaches by interpreting pertinent agreements in a delicate way within express or implied authorization to promote the coherence and consistency of International Investment law as a system.

This article emphasizes the analysis of the practices of ICSID tribunals and tries to reconcile the divergent approaches. International Investment Law is a legal system and the investor-state arbitration tribunals are empowered two functions: disputes resolution and treaty interpretation. The sequence of application of pertinent agreements is ICSID Convention, pertinent BIT and involved investment contracts. On procedural treatments, BIT stipulation shall not conflict with that of ICSID Convention unless providing more favorable treatment to investors, whilst the pertinent investment contracts and concessions enjoy supremacy in both procedural and substantial treatments. The whole international investment law regime is designed to strike a balance between protection of investors and sovereign regulation of host state. While protecting foreign investors, international investment law shall preserve necessary space for host states to maneuver for public policy. Thus in these three kind agreements exists one implied or default clause which is that none of the three kind agreements shall be interpreted as a barrier to stop host state from offering more favorable treatment, except host state preserves otherwise expressly.

Suggested Citation

Wang, Peng, Piercing Corporate Veil in ICSID: Approaches and Reconciliation (October 29, 2013). Chinese Society of International Economic Law, 2013 Annual Meeting, Xi'an China. Available at SSRN: https://ssrn.com/abstract=2346745

Peng Wang (Contact Author)

School of Law, Xian Jiaotong University ( email )

28 Xianning West Road
Xi'an, Shaanxi 710049
029-82664484 (Phone)

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