Santiago Romero Barst and María Auxiliadora Rodríguez v. Republic of Ecuador

Case summary

At a glance

Parties: Santiago Romero Barst and María Auxiliadora Rodríguez (Ecuadorian-Italian dual nationals) v. Republic of Ecuador
Case no.: PCA Case No. 2023-23
Forum and rules: Ad hoc arbitration under the UNCITRAL Arbitration Rules 1976, administered by the PCA; seat Paris
Treaty: Italy–Ecuador BIT of 25 October 2001, with its Protocol
Tribunal: Prof. Juan Fernández-Armesto (Presiding Arbitrator), Prof. Laurence Boisson de Chazournes, Mr. Luis O'Naghten (dissenting)
Sector: Gaming; casinos
Outcome: Award on Jurisdiction (3 December 2025): the majority declined jurisdiction because the claimants' dominant and effective nationality is Ecuadorian and because their claim was an abuse of rights. Luis O'Naghten dissented.
Amount: Costs claimed: Ecuador USD 1,112,916; claimants USD 1,131,513. Arbitration costs of USD 550,000 were covered by equal deposits. Each party bears its own costs (unanimous).

The dispute

The claimants, a married couple born in Ecuador, held interests through the Romero Companies in seven casinos founded by Mr. Romero's father. Ms. Rodríguez's Italian nationality was recognised in 2002 (jure sanguinis); Mr. Romero obtained Italian nationality in 2007 (jure matrimonii). After the referendum of 7 May 2011, President Correa's Executive Order of 9 September 2011 ordered all gaming establishments to close, and the claimants shut their casinos. Relying on their Italian nationality, they claimed that Ecuador had breached fair and equitable treatment and the ban on expropriation in the Italy–Ecuador BIT. In a bifurcated phase, Ecuador objected to jurisdiction ratione personae and ratione voluntatis. It argued that the claimants' dominant and effective nationality is Ecuadorian and that relying on their Italian nationality was an abuse of rights.

Key holdings

The Treaty is silent on dual nationals of both the home and host State. Read in their context and in light of the Treaty's object and purpose, Arts. 1(2) and 9 require diversity of nationality between the investor and the host State, but they neither include nor exclude such dual nationals. Award ¶¶ 195–218
Art. 5(b) of the Protocol obliges a UNCITRAL tribunal to apply, in any decision including one on jurisdiction, the principles of international law recognised by both Contracting Parties. Dominant and effective nationality is customary international law. Neither Ecuador nor Italy was a persistent objector, so both must be regarded as recognising it, and the principle applies here. Award ¶¶ 183, 236–256
The claimants accepted that their dominant and effective nationality is Ecuadorian, and their only ties to Italy are their nationality and passports. They therefore lack standing under the Treaty, and the Tribunal lacks jurisdiction. Award ¶¶ 257–260, 348
The Tribunal distinguished Okuashvili, Bahgat and the Paris Court of Appeal decisions (Aboukhalil, Serafín García Armas, Dangelas). It held that Ecuador's other BITs, which set residency rules, and the CAITISA Report do not show an intent to protect dual nationals of both States. Under the COPCI, Ecuadorian dual nationals count as national investors. Award ¶¶ 281–343
As a second ground, the claim is an abuse of rights. After acquiring Italian nationality, the claimants registered their investments with the Superintendencia as Ecuadorian national investments, while Mr. Romero's Argentinian father had registered his as foreign. The maxims allegans contraria non est audiendus and venire contra factum proprium therefore bar them from invoking the Treaty's protection for foreign investors. Award ¶¶ 399–418
Costs lie where they fall. The question was legitimately arguable, and the abuse of rights was not committed in bad faith. This decision was unanimous. Award ¶¶ 433–438
Luis O'Naghten dissented on three main points. First, dominant and effective nationality is neither customary international law nor a principle of international law, and Italy and Ecuador did not recognise it. Second, the BIT protects any national of the other Party unless it expressly excludes dual nationals. Third, there was no abuse because the claimants acquired Italian nationality in 2002 and 2007, before the dispute became foreseeable in 2011. Dissenting Opinion ¶¶ 2–4, 88, 94, 119

Procedural history

6 September 2022The claimants file their Notice of Arbitration under Art. 9(3)(b) of the Treaty.
7 March 2023The co-arbitrators appoint Prof. Juan Fernández-Armesto as Presiding Arbitrator.
26 July 2023Terms of Appointment signed; the place of arbitration is fixed in Paris.
22 December 2023The claimants file their Statement of Claim.
3 June 2024Procedural Order No. 3 bifurcates the objections ratione personae and ratione voluntatis.
31 March – 1 April 2025Virtual hearing on jurisdiction.
3 December 2025Award on Jurisdiction: the majority declines jurisdiction, and each party bears its own costs.
3 December 2025Dissenting Opinion of Luis O'Naghten.