10 J. World Investment & Trade 39 (2009)
The Nationality Rules under the Energy Charter Treaty: Practical Considerations

handle is hein.journals/jworldit10 and id is 39 raw text is: The Nationality Rules under the Energy Charter
Treaty: Practical Considerations
Dominique D'ALLAIRE1
This article is dedicated in memoriam of Professor Thomas Willde whose enthusiasm
for the Energy Charter Treaty and whose personal invitation to write this article have
contributed to its completion.
The Energy Charter Treaty (ECT or Treaty) is a multilateral investment protection
treaty dedicated to the energy sector. The Treaty came into force in 1998, yet it is still
in its infancy. Only 20 arbitration cases have been reported and membership in the
Treaty is still relatively small.
Preparing and arguing ECT cases is pioneering work; however, it is of critical
importance in shaping both the interpretation and the scope of some of the Treaty's
provisions. Perhaps because they realise the importance of that work, commentators
have been particularly active and have expressed opinions on a variety of aspects of the
ECT. However, key aspects of the nationality of the investors under the ECT have not
been considered at length by commentators. Nationality is important both to establish
the jurisdiction of the arbitration tribunal constituted under the ECT as well as to
determine investors' rights and obligations under the ECT.
This paper outlines the approach taken by various tribunals concerning the
nationality determination and proposes various criteria that may lead to a more
consistent and predictable exercise of the discretionary power of states concerning the
denial of the benefits of nationality.
The analysis will be limited to the criteria relating to the nationality of the claimant
seeking to use the settlement of dispute mechanism of article 26(1) of the ECT. The
paper is organized as follows: Part 1 covers the requirements of the ECT in relation to
the definition of investor. Part 2 covers the main requirements commonly found under
investment treaties for the determination of nationality and the interpretation given to
those nationality tests. The denial of national status for reasons of lack of substantial
business activities will be reviewed in Part 3 and possible criteria for its application will
be explored in Part 4.
I Dominique D'Allaire B.A. (Honours) York University, LL.B. University de Sherbrooke, M.Fisc.
Universit6 de Sherbrooke, is an associate at Freshfields Bruckhaus Deringer LLP in Frankfurt. He spent several years
working for the government of Canada principally in international and treaty negotiations. He can be reached at
dominique.dallaire@freshfields.com. The author wishes to thank Ray Boomgaardt from the Department of
International Trade Canada for his thoughtful comments on soume issues addressed in this paper.

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