Dominant and Effective Nationality

The investor-State dispute regime is "based on the principle that [investment] protections extend to investors who are nationals of a contracting State other than the host State in which the investment is made."

Consequently, the diversity of nationality between the parties is one of the pre-requisites an investment tribunal must verify in order to uphold jurisdiction over a claim. In order to assess such diversity, and after having established that the investor holds more than one nationality, tribunals may resort to the dominant and effective nationality test, which empowers them to analyze several factual elements to determine the genuine nationality of an individual. A broader application of this test has also been suggested in investor-State disputes, under certain circumstances, in the absence of dual nationals.

See complete article at: Jus Mundi, Wiki Notes - Last updated: 5 December 2023.