In <span class="news-text_italic-underline">Santiago Romero Barst and Maria Auxiliadora Rodriguez v Republic of Ecuador (PCA Case No 2023-23)</span>, a majority UNCITRAL tribunal declined jurisdiction over claims brought by investors holding both Italian and Ecuadorian nationality. Applying the principle of dominant and effective nationality, the tribunal held that Ecuador had not consented under the Ecuador–Italy bilateral investment treaty (“<span class="news-text_medium">BIT</span>”) to arbitrate disputes with dual nationals whose predominant nationality was Ecuadorian. The decision also addresses the relevance of international law principles and abuse of rights in the context of investment treaty arbitration.
In <span class="news-text_italic-underline">Santiago Romero Barst and Maria Auxiliadora Rodriguez v Republic of Ecuador (PCA Case No 2023-23)</span>, a majority of an ad hoc UNCITRAL tribunal declined jurisdiction over claims brought against Ecuador by investors holding dual Italian and Ecuadorian nationality under the BIT.
The arbitration was seated in Paris and conducted under the <span class="news-text_italic-underline">UNCITRAL Rules 1976</span>. The dispute concerned alleged breaches of the BIT in connection with the claimants’ investment in Ecuador’s gaming industry. Article 9 of the BIT provides that disputes between one Contracting Party and investors of the other Contracting Party may, at the investor’s election, be submitted to arbitration, including under the <span class="news-text_italic-underline">UNCITRAL Rules</span>. Where UNCITRAL arbitration is chosen, the tribunal is required to decide the dispute by reference to the BIT and, in any event, to apply the principles of international law recognised by the Contracting Parties (the “<span class="news-text_medium">PIL Provision</span>”).
It was not disputed that, while the claimants held Italian nationality and passports, their effective and predominant nationality was Ecuadorian. The claimants had no meaningful ties to Italy beyond their formal nationality. By a majority, the tribunal held that Ecuador had not consented to submit disputes to UNCITRAL arbitration where the claimants were dual nationals whose dominant and effective nationality was that of the host state. The tribunal found that the investors’ election of UNCITRAL arbitration engaged the PIL Provision, which was sufficiently broad to extend to questions of jurisdiction.
Applying the interpretative principles set out in the <span class="news-text_italic-underline">Vienna Convention on the Law of Treaties</span>, the tribunal concluded that the BIT did not clearly address whether claims brought by dual nationals of both the home and host states were excluded from treaty protection. In those circumstances and as required by the PIL Provision, the tribunal turned to principles of international law. It accepted Ecuador’s argument that the principle of dominant and effective nationality formed part of international law recognised by both Ecuador and Italy. Under that principle, where a person holds dual nationality, tribunals may assess which nationality is predominant when determining standing to bring a claim.
Although the tribunal acknowledged that there is no settled consensus on the application of this principle in the context of investment treaty arbitration, it held that the wording of the PIL Provision mandated its application in this case. Applying the principle, the tribunal concluded that the claimants lacked standing to bring claims under the BIT.
The majority further held that the claimants’ conduct provided an additional basis for dismissing the claims. Having officially registered their investment in Ecuador as a national investment, their subsequent attempt to seek treaty protection by presenting themselves as Italian nationals making a foreign investment was characterised as an abuse of rights.
The dissenting arbitrator disagreed with both grounds on which the majority declined jurisdiction.
<span class="news-text_medium">Case:</span> <span class="news-text_italic-underline">Santiago Romero Barst and Maria Auxiliadora Rodriguez v Republic of Ecuador (PCA Case No 2023-23)</span>, award dated 3 December 2025 (Tribunal: Professor Juan Fernández-Armesto (President), Professor Laurence Boisson de Chazournes and Mr Luis O’Naghten (dissenting)).
