Raimundo J. Santamarta Devis v. Venezuela
PCA · Investment (ICSID and treaty) · Venezuela · 26 Jul 2023
Why it matters
This award is significant because it addresses the treatment of dual nationals under the Spain-Venezuela BIT, a recurring issue in investment arbitration. The tribunal held that the BIT does not extend protection to dual nationals who also hold the nationality of the host state, rejecting the claimant's argument that the BIT's broad definition of 'investor' includes dual nationals. The decision clarifies the application of the dominant and effective nationality principle in the context of bilateral investment treaties and may influence future cases involving dual nationals.
Summary
The case concerns a claim by Raimundo J. Santamarta Devis, a dual national of Spain and Venezuela, against Venezuela under the Spain-Venezuela BIT. Santamarta alleged that Venezuela's measures between 2015 and 2018 destroyed his investments in pharmaceutical companies SM Pharma and Grupo SM, amounting to expropriation and treaty breaches. Venezuela objected to jurisdiction on the ground that Santamarta, as a Venezuelan national, could not be considered an 'investor' under the BIT. The tribunal, constituted under UNCITRAL Rules with seat in Geneva, had to interpret the BIT's definition of 'investor' in Article 1, which refers to 'nationals' of a Contracting Party. Applying the VCLT, the tribunal examined the text, context, object and purpose, and supplementary means. It found that the BIT's preamble and other provisions, including the dispute resolution clause, did not clearly include dual nationals. The tribunal also considered the 1992 Treaty of Friendship between Spain and Venezuela, which excluded dual nationals from diplomatic protection. Applying principles of international law, including sovereign equality and non-responsibility, the tribunal concluded that dual nationals cannot invoke the BIT against their own state. It also applied the dominant and effective nationality test, finding that Santamarta's Venezuelan nationality was dominant given his long residence and business ties. The tribunal upheld Venezuela's objection, declining jurisdiction. It ordered each party to bear its own legal costs, with claimant bearing common costs, noting the complexity and good faith of the claim.
The detail
Parties: Raimundo J. Santamarta Devis v. Venezuela
Case number: PCA Case No. 2020-56
Outcome: Tribunal upheld Venezuela's objection to jurisdiction ratione personae, finding it lacked jurisdiction; each party bears its own legal costs, claimant bears common costs.
Applicable law: Spain-Venezuela BIT (1995); UNCITRAL Rules (1976); VCLT; international law; Venezuelan law
Issues in play: Interpretation of 'investor' under the BIT: whether a dual national (Spanish and Venezuelan) can bring a claim against Venezuela. Venezuela argued that the BIT excludes dual nationals; claimant argued it does not. The tribunal applied VCLT Article 31 and principles of international law, including dominant and effective nationality.
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