Michael Ballantine and Lisa Ballantine v. The Dominican Republic
PCA · Investment (ICSID and treaty) · Dominican Republic · 3 Sep 2019
Why it matters
This case is significant for its detailed application of the 'dominant and effective nationality' standard in the context of dual nationals under DR-CAFTA. It clarifies that a dual national investor cannot bring a claim against a state of which they are a national if that nationality is dominant and effective. The award also addresses the interplay between environmental protection and investment obligations, though jurisdiction was declined.
Summary
Michael and Lisa Ballantine, U.S. citizens who also acquired Dominican nationality, invested in a luxury residential project called Jamaca de Dios in the Dominican Republic. They faced difficulties obtaining environmental permits for Phase 2 of the project, leading to a dispute under DR-CAFTA. The Dominican Republic objected to jurisdiction, arguing that the Ballantines were not 'investors of a Party' because their Dominican nationality was dominant and effective. The Tribunal agreed, applying a multi-factor test including habitual residence, personal attachment, center of economic/social/family life, naturalization reasons, and conduct. It found that the Ballantines' Dominican nationality was dominant and effective, thus they could not bring a claim against the Dominican Republic under DR-CAFTA. The Tribunal did not reach the merits. A partial dissent on costs argued that the unsuccessful party (Claimants) should bear all arbitration costs, but the majority ordered each party to bear its own costs and split the arbitration costs equally.
The detail
Parties: Michael Ballantine and Lisa Ballantine v. The Dominican Republic
Case number: PCA Case No. 2016-17
Outcome: The Tribunal declined jurisdiction because the Claimants were not investors of a Party under DR-CAFTA due to their Dominican nationality being dominant and effective. No damages awarded.
Applicable law: DR-CAFTA (Articles 10.1-10.14), UNCITRAL Arbitration Rules (2013), Vienna Convention on the Law of Treaties
Issues in play: The key issue was whether the Ballantines, who held both U.S. and Dominican nationality, could bring a claim under DR-CAFTA. The Tribunal applied the 'dominant and effective nationality' test to determine that their Dominican nationality prevailed, thus barring jurisdiction.
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.