Barcelona Traction, Spanish Civil War, Spanish government, ICJ International Court of Justice, Singapore-UK treaty, multilateral investment treaty, UK United Kingdom, Belgium, Spain, Bilcon case, NAFTA North American Free Trade Agreement, Canada
The Court examined the question: "Can a State provide diplomatic protection to its citizens who hold shares in a company incorporated in a different country when shareholders' interests are impacted by actions against the company?"
[...] The Belgian Government acknowledged that it had not anchored its claim on a breach of the shareholders' direct rights. Any harm to the shareholders' interests stemming from an infringement upon the company's rights was deemed inadequate as a basis for a claim. Barcelona Traction When an unlawful act is committed against a company representing foreign investment, the standard principle of international law permits only the company's home state to exercise diplomatic protection. There exists no explicit international law granting such a right to the shareholder's home state. [...]
[...] Therefore, the Court dismissed Belgium's claim. Barcelona Traction Shareholder protection in foreign companies After Barcelona Traction Case During the 1970s, there was a significant rise in the quantity of bilateral or multilateral investment treaties. Certain bilateral treaties aim to establish alternative criteria for determining the nationality of companies eligible for protection under the treaty. For instance, the Singapore-United Kingdom treaty . Investor arbitration provides foreign investors with the opportunity to settle disputes without relying on national legal systems, which could be perceived as biased or lacking impartiality. [...]
[...] Facts: Barcelona Traction is registered or established in Toronto. The ownership of the company's shares was transferred to shareholders based in Belgium The Spanish judge pronounces the company's bankruptcy, leading to the sale of its assets within Spanish territory Barcelona Traction's assets are confiscated by the Spanish government Belgium takes the case to the International Court of Justice (ICJ) The International Court of Justice (ICJ) delivers its verdict. Barcelona Traction The parties' arguments Belgium pursued reparation for the harm inflicted upon the Belgian shareholders of Barcelona Traction. [...]
[...] Barcelona Traction The Bilcon case Bilcon aimed to safeguard its interests as a foreign investor by invoking the provisions of the North American Free Trade Agreement (NAFTA). Asserting that the Canadian government's denial of permission for the construction of the aggregate quarry had infringed upon its rights as outlined in the agreement. The arbitration tribunal sided with Bilcon, granting substantial financial compensation, demonstrating that foreign investors can access legal and financial safeguards when engaged in disputes with foreign governments. Barcelona Traction Any questions? [...]
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