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This article has been repurposed from Linkedin, published 10 March 2022.

The Bona Fide Investor: Corporate Nationality and Treaty Shopping in Investment Treaty Law is the first comprehensive exploration of a substantive legal basis by which to assess the bona fides of a corporate investor’s nationality.

In The Bona Fide Investor, Dr Simon Foote QC examines the degree to which manipulation of corporate nationality is consistent with the objects and purposes of the investment treaty regime and analyses its effect on the legitimacy of investor-state dispute mechanisms.


"The importance of nationality requirements for establishing jurisdiction under investment treaties and the controversy arising from treaty shopping in certain circumstances cannot be underestimated", he explains. "Such treaty shopping ultimately dictates the persons – natural and/or corporate – who may invoke the substantive protections of investment treaties. States and investors alike need to know the extent of the boundaries of coverage of a treaty."  


To identify a suitable legal test for corporate nationality under investment treaty law and a method for its implementation, Dr Foote examines relevant public international law and domestic law concepts including analogous jurisdictional concepts in investment treaty law, the law of diplomatic protection, the law of double tax treaties, the boundaries of the concept of separate legal personality, and the notion of the abuse of the corporate form. 


He concludes that throughout these inter-related fields, the common denominator of good faith claims to corporate personality and nationality is the concept of purpose. That insight leads to his test for a bona fide claim to corporate nationality in investment treaty law: a requirement that a claimant entity has a real commercial reason to exist other than to claim investment treaty protection. This is akin to the way that corporate nationality is approached in the field of double tax treaty law. 


"For reasons fully explored in my book," Dr Foote explains, "the ‘reason to exist’ test is better fit for purpose than other substantive criteria for corporate nationality such as control and substantial business activity and can be readily applied to existing investment treaties." 


In his Foreword to the book, Sir David AR Williams KNZM QC observes: “Dr Foote emerges with the insight that the fundamental factor which delineates legitimate from illegitimate use of the corporate form in many fields is the commercial purpose for which the entity exists… In my view, this work of scholarship has the potential to change the way in which the legitimacy of claims to nationality by corporates are assessed in the field of international investment law.” 


Get your copy of The Bona Fide Investor: Corporate Nationality and Treaty Shopping in Investment Treaty Law online here.

“This incomparable book will be of immense interest and use to practitioners who advise on investment treaty jurisdictional issues for clients and debate jurisdictional concepts and corporate nationality issues before international tribunals.” – Wolters Kluwer