Investors initiating
investment arbitration against a host state must satisfy a series of
prerequisite conditions, one of which includes being a qualified investor
protected under the investment treaty. In cases of dual nationality,
determining which nationality is applicable in investment arbitration can be
highly complex. This complexity arises because most international investment
agreements (IIAs) need to clearly define whether individuals with dual
nationality are eligible to qualify as investors. A significant issue is
balancing protecting investors’ rights and respecting states’ sovereignty.
Principles such as the‘effective nationality’exemplified in the Nottebohm case
play a crucial role in addressing dual nationality issues by highlighting the
importance of the tangible connection between individuals and their countries
of nationality. This article takes the dispute points in the International
Centre for Settlement of Investment Disputes (ICSID) case of Hussein Nuaman
Soufraki v. The United Arab Emirates (UAE) as an example. It discusses the
different cases of different arbitral institutions and recent cases. These
results suggest the need for more precise guidelines and more consistent
application of principles to address dual nationality issues in the future.
Future research should focus on developing unified criteria for nationality
determination and exploring the implications of nationality issues in emerging
investment scenarios.