In <span class="news-text_italic-underline">Fernando Paiz Andrade and Anabella Schloesser de León de Paiz v Republic of Honduras (ICSID Case No ARB/23/43)</span>, the tribunal considered five jurisdictional objections raised by Honduras in bifurcated proceedings. Mr Paiz Andrade and Mrs Schloesser de León de Paiz, both Guatemalan nationals, claimed to own the Honduran solar energy company Pacific Solar Energy, SA de CV through a chain of corporations.
Pacific Solar’s shares and assets had been placed in trust with a Honduran bank to secure project finance loans from two European development banks. The lenders were first-ranking beneficiaries. The claimants’ corporations held lower-ranking beneficial interests and could recover the shares and assets only after the loans had been repaid in full. Honduras argued that the claimants therefore neither owned nor controlled the investment within article 10.28 of CAFTA-DR, which defines an investment by reference to assets an investor owns or controls, directly or indirectly.
The tribunal held that ownership depended on the rights retained under the trust arrangements and the relief sought. Under Honduran law, the trustee held nominal ownership without an economic interest, while beneficial ownership was divided between the lenders and the settlors.
By a majority comprising Professor Angelet and Mr Drymer, the tribunal found that the claimants had standing under article 10.16.1(b) to seek reparation on behalf of Pacific Solar for loss allegedly suffered directly by the company. A different majority, comprising Professor Angelet and Professor Stern, held that the claimants could not seek reparation on their own behalf under article 10.16.1(a): their prospect of recovering the shares and assets after full repayment of the loans was “too hypothetical”.
The tribunal also decided objections concerning exhaustion of local remedies, prior consultation, most-favoured-nation treatment and the existence of an investment agreement; those rulings are not addressed here. The decision illustrates how trust and security arrangements may affect an investor’s standing differently depending on whether it claims for its own loss or on behalf of a locally incorporated company.
<span class="news-text_medium">Case:</span> <span class="news-text_italic-underline">Fernando Paiz Andrade and Anabella Schloesser de León de Paiz v Republic of Honduras (ICSID Case No ARB/23/43)</span>, Decision on the Bifurcated Jurisdictional Objections, 20 July 2026. The tribunal comprised Professor Angelet (President), Mr Drymer (claimants’ appointee) and Professor Stern (respondent’s appointee).
