Just ten years after the International Court of Justice issued the Nottebohm decision, the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID Convention) adopted a clear demarcation that only foreign investors may bring an investment claim against a state. While ICSID arbitral tribunals are left with the difficult task of interpreting the nationality laws of individual states, the same tribunals have not applied Nottebohm's "effective nationality" to review contentious facts where a genuine connection with a state is lacking. This article analyzes the troublesome relationship between Nottebohm's "effective nationality" and Article 25(2)(a) of the ICSID Convention. The article deduces that the current position is reconcilable with the Nottebohm decision: tribunals may undertake a limited inquiry into the genuine ties that the investor has with an ICSID contracting state but not into the investor's ties with the respondent state.
Journal of International Arbitration