3 Good Faith and Treaty Shopping: Timing, Piercing the Corporate Veil, and Issues of Nationality

Subject(s):

Good faith — General principles of international law — Treaty provisions

This chapter examines the role of good faith in treaty shopping in investment arbitration, with particular emphasis on the issues of corporate structure, timing in tribunal decisions, and nationality. It first considers how investment tribunals address issues of good faith from the jurisdictional phase of an investment dispute before defining ‘nationality’ in international law and by investment tribunals. It then discusses the concept of treaty shopping in domestic legislation and in international law and goes on to review a number of cases that illustrate how tribunals have dealt with treaty shopping. It also looks at disputes arising from forum selection in good faith in the European Union and concludes with an analysis of whether applying a standard of good faith to allegations of treaty shopping allows tribunals to concretely assess the situation, and whether such application allows investors to adequately plan and anticipate the results of securing the desired jurisdiction.