GAMI INVESTMENTS, INC. - NAFTAClaims

the following reasons. First, the case does not stand for what Mexico
purports. The central legal issue in Barcelona Traction has to do with
the right to diplomatic protection of a corporate entity.
The court followed the traditional customary international
law rule that attributes the right of diplomatic protection to the state
of incorporation, Canada, rather the state of nationality of its
shareholders, Belgium.
Second, the ICJ specifically stated that it was not deciding
whether shareholders could bring a claim for losses to their interest,
since the only claim made was for losses to the enterprise. This would
be at paragraph 16, footnote 9 of Claimant's first brief. In other
words, Barcelona Traction did not examine whether international law
provided an independent source of rights and protection for shareholders.
Third, as Barcelona Traction itself recognized, however,
states can and have by treaty established different rules that supersede
customary international law. Most recently again in CMS Gas Transmission
Company v. the Republic of Argentina, decision is of 17 July 2003 and
Claimant's drew the attention of counsel and the Tribunal to this, the
Tribunal in Barcelona Traction recognized this reality by indicating at
paragraph 43 of the decision that Barcelona Traction did not rule out the
possibility of extending protection to shareholders in a corporation in
different contexts.
Of course, claims by shareholders are recognized by
international law and most immediately by decisions of Tribunals
operating under the substantive rules of the NAFTA in at least three
decisions, Pope & Talbot, Mondev and S.D. Myers. The Tribunal was
concerned not with the question of controlling majorities. Rather, the
arbitrators were concerned with the possibility of protecting
shareholders independently from the affected corporation.
In S.D. Myers the Tribunal recalled the objectives of the
NAFTA and the obligation of the parties to interpret and apply its
provisions in light of its objectives, and it indicated, and I quote,
"The Tribunal does not accept that an otherwise meritorious claim should
fail solely by reason of the corporate structure adopted by the Claimant
in order to organize the way in which it conducts its business affairs."
And this would be at paragraph 229, Exhibit C-87.
In Pope & Talbot the Tribunal noted, and I quote, "It could
scarcely be clearer that claims may be brought under Article 1116 by an
investor who is claiming for loss or damage to its interest in the
relevant enterprise." And this would be at paragraphs 79 and 80 of
Exhibit C-88.
In Mondev, finally, in the Tribunal's view, and I quote, "It
is certainly open to Mondev to show that it has suffered loss or damage
by reason of the decisions it complains of even if loss or damage was
also suffered by the enterprise itself." And that would be at paragraph
82, Exhibit C-44.
Now the CMS decision also cites with approval the decision
Goetz v. Republic of Burundi where the Tribunal noted and observed that
prior ICSID jurisprudence does not hold that only the legal persons
directly concerned by the matters at issue have the capacity to act as
Claimant. Rather, the Tribunal noted it extends this capacity to the
shareholders of these legal persons who are the real investors. In part,
on the basis of the decision in Lanco v. Argentina and on the annulment
decision in Vivendi, the CMS Tribunal concluded that Claimant in that
matter has jus standi under the U.S./Argentina bilateral investment
treaty, a blueprint of the NAFTA, I may add international law in the
ICSID Convention.