In <span class="news-text_italic-underline">Decision 4A_466/2023</span>, the Swiss Supreme Court upheld an arbitral award in which the tribunal declined jurisdiction over a Spanish-Venezuelan investor's claim against Venezuela under the Spain-Venezuela Bilateral Investment Treaty (“<span class="news-text_medium">BIT</span>”). The Court affirmed the tribunal's decision, determining that the claimant's dominant and effective nationality was that of Venezuela, as the BIT did not address the issue of dual nationality.
The case involved Raimundo Santamarta, a dual national of Spain and Venezuela, who sought damages for the expropriation of his family's pharmaceutical businesses. The Geneva-seated UNCITRAL tribunal declined jurisdiction, concluding that Santamarta’s dominant nationality was Venezuelan, making him ineligible to bring a claim against Venezuela under the BIT. Santamarta challenged the award, arguing that the tribunal had improperly added a condition not present in the BIT, asserting that Spain and Venezuela could have excluded dual nationals from BIT protection if that had been their intention.
The Swiss Supreme Court addressed this issue by emphasising that the BIT’s silence on dual nationality could not be interpreted as permitting or excluding claims by dual nationals. The Court highlighted the importance of applying the principles of international law in the absence of specific treaty provisions. It confirmed the arbitral tribunal’s interpretation, which found that customary international law on diplomatic protection, including the principle of dominant and effective nationality, was relevant to fill the gap in the BIT regarding dual nationals.
The Court also underscored that the BIT’s dispute resolution mechanism, allowing for arbitration under UNCITRAL rules when ICSID arbitration was unavailable, did not imply that dual nationals were excluded from arbitration under these rules. Importantly, the Court noted that the issue of dual nationality should be resolved based on international law principles, with the tribunal’s findings on the claimant's effective nationality being a matter of law that could be reviewed by the Court.
In its decision, the Court provided general guidance on how treaties should be interpreted when silent on dual nationality, confirming that the principle of dominant and effective nationality is a recognised international law rule applicable in investment protection cases.
This decision marks the Swiss Supreme Court’s first ruling on the contentious issue of whether dual nationals are entitled to sue their home state under an investment treaty when the treaty is silent on the matter. It emphasises the role of international law in filling gaps within bilateral treaties, especially in cases involving dual nationals.
