Piercing the Corporate Veil in International Investment Law: Problems with the Denial of Benefits Clause

Oonagh Fitzgerald (ed), The Corporation in International Law and Governance. Perspectives on Globalized Rule of Law (Waterloo, ON: CIGI, 2020 Forthcoming)

17 Pages Posted: 17 Feb 2020

Date Written: January 21, 2020

Abstract

The abolition of Investor-State Dispute Settlement (ISDS) between Canada and the United States in the Canada–United States–Mexico Agreement (CUSMA) is likely to renew the interest for corporate strategies aiming to take advantage of the protection of investment agreements concluded with third states. Treaty shopping and the problem of free riding by third country investors is certainly not a new feature of foreign investment. This problem is specifically addressed by denial of benefits (DoB) clauses in many investment agreements. DoB clauses allow a host state to pierce the corporate veil in order to deny treaty protection to foreign investors that have no economic connection to the state of incorporation. This paper explores the problems of form and the problems of substance of the DoB clause raised in arbitral decisions, with some concluding remarks.

Keywords: ISDS, international investment law, corporation

Suggested Citation

Côté, Charles-Emmanuel, Piercing the Corporate Veil in International Investment Law: Problems with the Denial of Benefits Clause (January 21, 2020). Oonagh Fitzgerald (ed), The Corporation in International Law and Governance. Perspectives on Globalized Rule of Law (Waterloo, ON: CIGI, 2020 Forthcoming), Available at SSRN: https://ssrn.com/abstract=3523769 or http://dx.doi.org/10.2139/ssrn.3523769

Charles-Emmanuel Côté (Contact Author)

Université Laval - Faculty of Law ( email )

1030, avenue des Sciences-Humaines
Quebec City, Quebec G1S 2C4
Canada
418 656-2131 #405352 (Phone)

HOME PAGE: http://www.fd.ulaval.ca

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