Transban Investments Corp. v. Bolivarian Republic of Venezuela
ICSID · Investment (ICSID and treaty) · Venezuela · 22 Nov 2017
Why it matters
This case is significant for its interpretation of corporate nationality in investment treaty arbitration, particularly regarding continued companies. The Tribunal held that a company continued from another jurisdiction into Barbados was not 'incorporated or constituted' under Barbados law for BIT purposes, rejecting the notion that continuance creates a new legal entity. The decision clarifies the distinction between incorporation and continuation and underscores the importance of the original incorporation jurisdiction. It also addresses the effect of ICSID denunciation on pending claims, though the Tribunal did not need to decide that issue.
Summary
Transban Investments Corp., a company originally incorporated in Venezuela, was continued into Barbados in 2001 under the Barbados Companies Act. It claimed to be a Barbadian investor under the Barbados-Venezuela BIT and initiated ICSID arbitration against Venezuela in July 2012, shortly after Venezuela denounced the ICSID Convention. Venezuela raised two preliminary objections: (1) lack of jurisdiction ratione temporis because Venezuela had withdrawn from ICSID before the request was registered, and (2) lack of jurisdiction ratione personae because Transban was not a protected investor under the BIT. The Tribunal bifurcated the proceedings and addressed both objections. On the temporal objection, the Tribunal noted that the critical date for consent was the date of registration of the request, but did not need to decide because it upheld the personal objection. On the personal objection, the Tribunal examined whether Transban was 'incorporated or constituted under the law in force' in Barbados. It found that Transban was continued, not incorporated, under Barbados law, and that continuance does not constitute a new company. Therefore, Transban did not meet the BIT's definition of a company and was not a protected investor. The Tribunal dismissed the claim for lack of jurisdiction. One arbitrator dissented, arguing that continuance does constitute a new legal entity under Barbados law and that the certificate of continuance should be presumptive proof of nationality.
The detail
Parties: Transban Investments Corp. v. Bolivarian Republic of Venezuela
Case number: ICSID Case No. ARB/12/24
Outcome: The Tribunal upheld Venezuela's objection to jurisdiction ratione personae, finding that Transban was not a protected investor under the BIT because it was not 'incorporated or constituted' under the laws of Barbados. The claim was dismissed for lack of jurisdiction.
Applicable law: ICSID Convention; Agreement between the Government of Barbados and the Government of the Republic of Venezuela for the Promotion and Protection of Investments (BIT); Barbados Companies Act; customary international law on treaty interpretation (VCLT Articles 31-32).
Issues in play: The definition of 'company' under Article 1(d) of the BIT required the investor to be 'incorporated or constituted under the law in force' in Barbados. The Tribunal interpreted 'incorporated' and 'constituted' under Barbados law, distinguishing between incorporation and continuation, and held that a continued company is not 'incorporated' and that continuance does not 'constitute' a new company.
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