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International Arbitration Forum

Raimundo J. Santamarta Devis v. Venezuela, PCA Case No. 2020-56

Case summary

At a glance

Parties
Raimundo J. Santamarta Devis (Spanish and Venezuelan dual national) v. the Bolivarian Republic of Venezuela
Case no.
PCA Case No. 2020-56; Swiss Federal Tribunal 4A_466/2023
Forum and rules
Ad hoc arbitration under the UNCITRAL Arbitration Rules, administered by the PCA, seat Geneva; challenge before the Swiss Federal Tribunal under Article 190(2)(b) PILA
Treaty
Spain–Venezuela BIT of 2 November 1995
Court
Swiss Federal Tribunal, First Civil Law Court: Hurni (President), Kiss, Denys, Rüedi, May Canellas
Underlying award(s)
Award of 26 July 2023 (PCA Case No. 2020-56), declining jurisdiction ratione personae
Sector
Pharmaceuticals
Outcome
The Swiss Federal Tribunal dismissed the challenge to the award, insofar as it was admissible, on 6 February 2025. The arbitral tribunal's decision that it lacked jurisdiction stands.
Amount
Claimed in the arbitration: at least USD 200,000,000. Court costs of CHF 200,000 and party costs of CHF 250,000 were imposed on the claimant. The party costs are paid from the CHF 250,000 security he had deposited.

The dispute

The claimant was born in Venezuela in 1954. He lost his Spanish nationality in 1959, regained it in June 1999 while keeping his Venezuelan nationality, and has lived in the United States since 1989. He says he became the sole shareholder of two Venezuelan pharmaceutical companies founded by his family in 1977. On 17 January 2020 he started arbitration under the Spain–Venezuela BIT and claimed at least USD 200,000,000. He argued that measures taken by Venezuela between 2015 and 2018 destroyed the companies' production capacity and unlawfully confiscated their assets. Venezuela objected to jurisdiction ratione personae: it argued that the BIT does not protect Spanish–Venezuelan dual nationals, and in the alternative that the claimant was only Venezuelan when he made his investments.

Key holdings

  1. The arbitral tribunal declined jurisdiction ratione personae because the claimant's dominant and effective nationality was Venezuelan. It held that Venezuela's alternative objection did not need to be examined. Award ¶¶ 520–521 (as summarised in the judgment, consid. 5.2.8)
  2. Article I(1)(a) of the BIT, read under Article 31 of the Vienna Convention, is silent on dual nationals. The word "one" is an indefinite article that sets a minimum requirement, not a bar on holding both nationalities. But the silence cannot be read as either granting or denying dual nationals full protection. The Court accepted the arbitrators' finding of fact that, when the BIT was concluded, there was no widespread or emerging practice of granting full protection to dual nationals absent an express exclusion. Judgment, consid. 5.4.5
  3. Article XI of the BIT offers a menu of options with no hierarchy. A dual national who is excluded from ICSID by Article 25(2)(a) of the ICSID Convention may still bring an UNCITRAL arbitration under Article XI(3). The ICSID exclusion does not carry over to that arbitration, so dual nationality is not in itself a bar to protection under the BIT. Judgment, consid. 5.4.5
  4. The case differs from ATF 146 III 142 (on the notion of investment under the same BIT). Here the tribunal did not add a condition the parties had chosen to omit. It filled a gap the Contracting States had left open. Judgment, consid. 5.4.5
  5. Under Article 31(3)(c) of the Vienna Convention, the gap may be filled with customary international law on diplomatic protection. The dominant and effective nationality rule is a relevant rule of international law between the Contracting States, including in investment protection. This is consistent with Article 17 of the ILC Draft Articles on Diplomatic Protection. The rule must be applied with particular care in investment arbitration, because of the risk of passport shopping and treaty shopping. Judgment, consid. 5.4.6–5.4.7
  6. Which nationality is dominant and effective is a question of law, but it rests on the facts found in the award. The claimant's personal, family and social life had been in the United States since 1989. In those circumstances the centre of his economic interests, which was in Venezuela when the measures were adopted, was the appropriate and decisive criterion. His dominant and effective nationality was therefore Venezuelan. Judgment, consid. 5.5
  7. The challenge was dismissed insofar as admissible. The claimant must pay court costs of CHF 200,000 and pay Venezuela CHF 250,000 in party costs, taken from his security. Judgment, consid. 6 and operative part

Procedural history

  1. 17 January 2020The claimant initiates arbitration against Venezuela under the Spain–Venezuela BIT. A three-member UNCITRAL tribunal is constituted under PCA auspices, with its seat in Geneva and Spanish as the language of the arbitration.
  2. 28–29 July 2022Hearing by videoconference on jurisdiction ratione personae, the first of three agreed phases.
  3. 26 July 2023Award: the tribunal declines jurisdiction ratione personae.
  4. 14 September 2023The claimant files a civil-law appeal to the Swiss Federal Tribunal seeking annulment of the award.
  5. 16 February 2024At Venezuela's request, the claimant is ordered to deposit CHF 250,000 as security for Venezuela's costs. He pays in time.
  6. 6 February 2025The Swiss Federal Tribunal dismisses the appeal insofar as admissible.

Tribunal, counsel and experts

Decided by
For the claimant
Xavier Favre-Bulle · Hanno Wehland
For the respondent
Sébastien Besson · Patrick Pithon

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Keywords

Summary generated with AI from the published documents — refer to the award for the authoritative text.

Country
Treaty
Spain - Venezuela BIT (1995)