Terms of investment treaty definitive in determining ICSID jurisdiction

The decision in The Rompetrol Group NV v Romania (ICSID Case No. ARB/06/3) relates to a preliminary objection to the jurisdiction of an ICSID tribunal in relation to a claim arising under a bilateral investment treaty (BIT). The respondent claimed that the claimant company was, in effect, owned and controlled by a domestic national and that the investment funds were from a domestic source. Accordingly, although the claimant was incorporated under Dutch law, its "real and effective" nationality was Romanian. Therefore the matter did not fall within the scope of the ICSID Convention.

The tribunal dismissed this objection. The ICSID Convention allowed contracting parties wide latitude to agree the criteria on which nationality would be determined. When interpreting a treaty, Article 31 of the Vienna Convention requires the terms to be given their "ordinary meaning". In this case, the BIT provided that nationality of a company could be determined solely by the law under which it was constituted. The terms of the BIT were clear and unambiguous and there was no principle of international law that would override them.