Source: https://iclg.com/practice-areas/investor-state-arbitration-laws-and-regulations/6-assignment-of-investment-treaty-claims
Timestamp: 2019-04-23 18:23:55+00:00

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However, such provisions do not settle the broader question, which is whether an assignment of investment treaty rights is generally permissible.
Amco thus supports the proposition that in contract cases, a prospective claimant will be required to demonstrate the host State’s consent to the assignment. Further, when a claim is brought under the ICSID Convention, an assignment to a third person who does not have the nationality of a Contracting State will not suffice to establish jurisdiction over the assignee.
However, such contract-based cases as Amco do not necessarily address all the issues that arise in the context of assignment of investment treaty claims.
Investment treaties typically set out specific nationality requirements. Unlike contracts, the investor-State arbitration clause found in most investment treaties actually constitutes an open offer. Once that offer is accepted, the arbitration agreement is perfected.
When the assignor is a national of a non-ICSID Contracting State or a person or entity that is not otherwise covered under an investment treaty, yet the assignee is a national of an ICSID Contracting State or a national who would satisfy an investment treaty’s nationality requirements, several tribunals have considered that this is not sufficient to establish jurisdiction. In effect, the assignor cannot assign a right she does not have (nemo dat quod non habet).
Interesting questions may also arise in respect of co-nationals as well as other nationals who were equally covered under other investment treaties at the time the act occurred.17 Likewise, whether the breach complained of, was continuous or is the result of a composite act could also impact on any determination on these issues.
Nafcanco was not a claimant and the tribunal did not explain whether its findings would have been any different had Nafcanco been joined in the proceedings as a claimant or had filed a separate claim.
The cases discussed above indicate that the issues regarding the assignment of investment treaty claims are complex and not entirely settled. Arbitral practice shows that transferring an investment is not necessarily the same as assigning an investment treaty claim. However, whether the assignment of the investment treaty claim (as opposed to the assignment/transfer of the investment) will be effective, will depend on several factors, including timing, nationality requirements and the nature of the dispute.
See Stephen Jagusch and Anthony C. Sinclair, ‘The Impact of Third Parties on International Arbitration – Issues of Assignment’, in Loukas A. Mistelis and Julian D. M. Lew (eds), Pervasive Problems in International Arbitration (Kluwer Law International 2006) 291.
the debtor and any question whether the debtors obligations have been discharged”); Emmanuel Gaillard and John Savage (eds), Fouchard Gaillard Goldman on International Commercial Arbitration (Kluwer Law International, 1999) para. 698 (“[t]he law governing the arbitration agreement determines the assignability of the agreement, the conditions to which the assignment is subject, and the consequences of the assignment, at least as far as relations between the assignor and its initial co-contractor are concerned … By contrast, relations between assignor and assignee are governed by the law chosen by those parties for that purpose”).
Jagusch and Sinclair (n 1) 291-2; Daniel Girsberger and Christian Hausmaninger, ‘Assignment of Rights and Agreement to Arbitrate’, 8 Arb. Int’l 121 (1992); V. V. Veeder, ‘Towards a Possible Solution: Limitation, Interest and Assignment in London and Paris’, Albert Jan van den Berg (ed), Planning Efficient Arbitration Proceedings: The Law Applicable to Arbitration (ICCA Congress Series No. 7, Kluwer Law International, 1996) 268.
See generally Jagusch and Sinclair (n 1) 291–319; William Lawton Kirtley, ‘The Transfer of Treaty Claims and Treaty-Shopping in Investor-State Disputes’, 10(3) J. World Inv. & Trade 427 (2009); Hanno Wehland, ‘The Transfer of Investments and Rights of Investors under International Investment Agreements – Some Unresolved Issues’, 30(3) Arb. Int’l 565 (2014); Pierre Lalive, ‘Some Objections to Jurisdiction in Investor-State Arbitration’, Albert Jan van den Berg (ed), International Commercial Arbitration: Important Contemporary Questions (ICCA Congress Series No. 11, Kluwer Law International, 2003) 376, 385–387; Mauro Rubino-Sammartano, ‘Are All Transfers of an Investment Protected by the Treaty Which Deals with the Original Investment?’, 31(1) Journal of International Arbitration 97 (2014); Christoph Schreuer, Loretta Malintoppi, August Reinisch and Anthony Sinclair, The ICSID Convention: A Commentary (Cambridge University Press 2009), Art. 25, paras 39–40, 336–373.
When there is a succession in title by merger or otherwise, there will be a threshold question in the case where, under the law of the home State, the merger was valid and if so, what rights it could transfer to the claimant entity. This issue arose in EuroGas v. Slovakia, where the tribunal held that it did not have jurisdiction as no valid assignment could have happened by way of merger under the applicable domestic law. See EuroGas Inc. and Belmont Resources Inc. v. Slovak Republic, ICSID Case No. ARB/14/14, Award, 18 August 2017, paras 206, 420–424.
Amco Asia Corporation, Pan American Development Ltd and PT Amco Indonesia v. The Republic of Indonesia, Decision on Jurisdiction, 25 Sept. 1983, 1 ICSID Rep 377 (1993) para. 31. See also Autopista Concesionada de Venezuela, C.A. v. Bolivarian Republic of Venezuela, ICSID Case No. ARB/00/5, 27 Sept. 2001, Decision on Jurisdiction, para. 129.
Mihaly International Corporation v. Democratic Socialist Republic of Sri Lanka, ICSID Case No. ARB/00/2, Award, 15 Mar. 2002, para. 24. See also the contract case of Banro v. Congo DR, where the tribunal denied jurisdiction on the basis that the assignor (the claimant’s Canadian parent company) had assigned its shares in its Congolese investment to its subsidiary, Banro American (a US corporation). Banro American Resources, Inc. and Société Aurifère du Kivu et du Maniema S.A.R.L. v. Democratic Republic of the Congo, ICSID Case No. ARB/98/7, Award, 1 Sept. 2000, para. 14 (“What is at stake here, is not the question of relationship among companies of the same group, that is to say a question of private law, but rather a question of international law: the conditions required under the ICSID Convention for a State to be considered as a Contracting State will or will not be fulfilled depending on which company of the group files the request for arbitration”).
See Phoenix Action, Ltd. v. Czech Republic, ICSID Case No. ARB/06/5, Award, 15 Apr. 2009, paras 89–92, 100, 136, 144; Philip Morris Asia Limited v. The Commonwealth of Australia, UNCITRAL, PCA Case No. 2012-12, Award on Jurisdiction and Admissibility, 17 Dec. 2015, para. 535 ff. See also Pac Rim Cayman LLC v. Republic of El Salvador, ICSID Case No. ARB/09/12, Decision on the Respondent’s Jurisdictional Objections, 1 Jun. 2012, para. 2.99 (“in the Tribunal’s view, the dividing-line occurs when the relevant party can see an actual dispute or can foresee a specific future dispute as a very high probability and not merely as a possible controversy. In the Tribunal’s view, before that dividing-line is reached, there will be ordinarily no abuse of process; but after that dividing-line is passed, there ordinarily will be. The answer in each case will, however, depend upon its particular facts and circumstances, as in this case. As already indicated above, the Tribunal is more concerned here with substance than semantics; and it recognises that, as a matter of practical reality, this dividing-line will rarely be a thin red line, but will include a significant grey area”).
Société Générale in respect of DR Energy Holdings Limited and Empresa Distribuidora de Electricidad del Este, S.A. v. The Dominican Republic, LCIA Case No. UN 7927, Award on Preliminary Objections to Jurisdiction, 19 Sept. 2008, para. 44.
Compañía de Aguas del Aconquija SA and Vivendi Universal (formerly Compagnie Générale des Eaux) v. Argentine Republic, Decision of ad hoc Committee on Annulment, 3 Jul. 2002, 6 ICSID Rep 340 (2004), para. 50.
International Law Commission, Articles on Responsibility of States for Internationally Wrongful Acts, with commentaries (2001), Art. 13.
Fedax N.V. v. The Republic of Venezuela, ICSID Case No. ARB/96/3, Decision of the Tribunal on Objections to Jurisdiction, 11 Jul. 1997.
See African Holding Company of America, Inc. and Société Africaine de Construction au Congo S.A.R.L. v. Democratic Republic of the Congo, ICSID Case No. ARB/05/21, Decision on Jurisdiction and Admissibility, 29 Jul. 2008, paras 62–63 (unofficial translation: “The Claimants have established in a convincing manner a distinction between that case and the present case, in which African Holding ‘does not seek to assert a right that SAFRICAS did not have’ and in which the assignment of claim was between a company which had the nationality of a Contracting State (SAFRICAS) and another company which also had the nationality of the same Contracting State (African Holding), that Contracting State being the United States. Whereas the situation before 2000 was different, in that SAFRICAS belonged to Belgian investors, at the time of the assignment of receivables the only relevant nationality was that of the United States … The Tribunal accordingly finds in this regard that all the rights held by SAFRICAS were transferred to African Holding, including claims and consent to arbitration, since the State whose nationals benefit from the consent expressed under the bilateral investment treaty has not changed. The situation in this case is clearly different from that of the Mihaly and Banro cases, in which a Canadian corporation was trying to assign rights it did not have”).
Loewen Group, Inc. and Raymond L. Loewen v. United States of America, ICSID Case No. ARB(AF)/98/3, Award, 26 Jun. 2003, paras 1, 9.
Ibid., para. 225 and 237 (“Such a naked entity as Nafcanco, even with its catchy name, cannot qualify as a continuing national for the purposes of this proceeding”). For the debate about the continuous nationality test see Jan Paulsson, ‘Continuous Nationality in Loewen’, 20(2) Arb. Int’l 213 (2004).
See El Paso Energy International Company v. The Argentine Republic, ICSID Case No. ARB/03/15, Decision on Jurisdiction, 27 Apr. 2006; Enron Corporation and Ponderosa Assets, L.P. v. Argentine Republic, ICSID Case No. ARB/01/3 (also known as: Enron Creditors Recovery Corp. and Ponderosa Assets, L.P. v. The Argentine Republic), Award, 22 May 2007; Gemplus, S.A., SLP, S.A. and Gemplus Industrial, S.A. de C.V. v. United Mexican States, ICSID Case No. ARB(AF)/04/3 & ARB(AF)/04/4, Award, 16 Jun. 2010; Ceskoslovenska obchodní banka, a.s. v. Slovak Republic, ICSID Case No. ARB/97/4, Decision of the Tribunal on Objections to Jurisdiction, 24 May 1999.
El Paso Energy International Company v. The Argentine Republic, ICSID Case No. ARB/03/15, Decision on Jurisdiction, 27 Apr. 2006, para. 130.
Enron Corporation and Ponderosa Assets, L.P. v. Argentine Republic, ICSID Case No. ARB/01/3 (also known as: Enron Creditors Recovery Corp. and Ponderosa Assets, L.P. v. The Argentine Republic), Award, 22 May 2007, para. 192.
Ibid., paras 196–198. Similarly in Gemplus, S.A., SLP, S.A. and Gemplus Industrial, S.A. de C.V. v. United Mexican States, ICSID Case No. ARB(AF)/04/3 & ARB(AF)/04/4, Award, 16 Jun. 2010, Part V, paras 5–33; Ceskoslovenska obchodní banka, a.s. v. Slovak Republic, ICSID Case No. ARB/97/4, Decision of the Tribunal on Objections to Jurisdiction, 24 May 1999, para. 32.
Teinver S.A., Transportes de Cercanías S.A. and Autobuses Urbanos del Sur S.A. v. Argentine Republic, ICSID Case No. ARB/09/01, Award, 21 Jul. 2017, paras 239–242; Ceskoslovenska obchodní banka, a.s. v. Slovak Republic, ICSID Case No. ARB/97/4, Decision of the Tribunal on Objections to Jurisdiction, 24 May 1999 , paras 29–32.
See, e.g., Blue Ridge Investments, LLC v. Republic of Argentina, No. 10 Civ. 153, S.D.N.Y. 30 Sept. 2012. See also Glencore Grain Ltd v. Agros Trading Co Ltd.  C.L.C. 1696. In that case, Agropol had obtained a commercial arbitration award against Glencore, which it had then assigned to Argos and notice was given to Glencore a week later. The main issue that had to be dealt with by the English Court of Appeal was whether Glencore could set-off certain debts against its liability under the award ( C.L.C. 1696, at 1697). In order to opine on this issue, the Court of Appeal had to determine whether the assignment of the award was valid in the first place. In this respect, the Court of Appeal held that it was “common ground” that “[t]he assignment of Agropol’s rights under [the] award ... is a valid legal assignment under s. 136 of the Law of Property Act 1925 and notice of the assignment was duly given to Glencore” ( C.L.C. 1696, at 1701).
The views expressed in this chapter are those of the authors alone and do not reflect the opinions of Quinn Emanuel Urquhart & Sullivan, LLP.

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