Manuel García Armas and others. v. Bolivarian Republic of Venezuela
PCA · Investment (ICSID and treaty) · Netherlands · 13 Dec 2019
Why it matters
This award is significant because it addresses the controversial issue of dual nationals in investment treaty arbitration. The Tribunal held that dual nationals cannot bring claims against their state of dominant nationality under the Spain-Venezuela BIT, diverging from some earlier decisions. It reinforces the principle that investment treaties do not override the general international law rule on dual nationality, potentially affecting many pending and future claims involving dual nationals.
Summary
The case involves eight Spanish nationals (the García Armas family) who invested in Venezuela through several companies. They alleged that Venezuela expropriated their investments without compensation, violating the Spain-Venezuela BIT. Venezuela objected to the Tribunal's jurisdiction on several grounds, including that the claimants were dual Spanish-Venezuelan nationals and thus could not bring claims against Venezuela, their state of dominant nationality. The Tribunal, applying the Vienna Convention on the Law of Treaties and general international law, interpreted the BIT's definition of 'investor' to exclude dual nationals claiming against their dominant nationality state. It found that the claimants' dominant nationality was Venezuelan, based on factors such as residence, family ties, and business activities. Consequently, the Tribunal declined jurisdiction over all claims. The decision also addressed costs, ordering each party to bear its own legal costs but requiring the claimants to pay the common arbitration costs. The award is notable for its strict application of the dual nationality rule in investment arbitration, contrasting with some earlier tribunals that allowed such claims.
The detail
Parties: Manuel García Armas and others. v. Bolivarian Republic of Venezuela
Case number: PCA Case No. 2016-08
Outcome: The Tribunal upheld Venezuela's objections to jurisdiction and declined jurisdiction over the claims.
Applicable law: Spain-Venezuela BIT (1995), UNCITRAL Arbitration Rules (1976), Vienna Convention on the Law of Treaties, general international law
Issues in play: The main legal issue was whether dual nationals (Spanish-Venezuelan) could bring investment treaty claims against Venezuela, their state of dominant nationality. The Tribunal applied the rule of non-responsibility for claims by dual nationals against their dominant nationality state, derived from diplomatic protection principles.
Read the full decision at italaw ↗
Locus Standi links to the source decision and publishes its own plain-language summary. It does not reproduce the text of the award.