Tribunal upheld Colombia’s objection to jurisdiction ratione personae considering double-nationality claimants to be predominantly Colombian

Alberto Carrizosa Gelzis and others v. Colombia, PCA Case No. 2018-56

The tribunal accepted the jurisdictional objection raised by Colombia (“respondent”) and awarded it USD 1.5 million for legal costs and expenses in its dispute against Alberto Carrizosa Gelzis, Felipe Carrizosa Gelzis, and Enrique Carrizosa Gelzis (collectively, “claimants”). Moreover, the claimants shall also bear the fees and expenses of the Permanent Court of Arbitration, the Arbitral Tribunal, and the Assistant to the Tribunal in the sum of USD 700,000.

The arbitration was conducted under the United States–Colombia Trade Promotion Agreement, which came into effect on May 15, 2012 (“TPA”) and the 2013 Arbitration Rules of the United Nations Commission on International Trade Law (“UNCITRAL Rules”).

Background

The dispute arose from a series of measures adopted in 1998 by three Colombian institutions directed at Granahorrar, a Colombian bank in which the claimants had invested. Claimants described such measures as a continuous discriminatory treatment that placed Granahorrar in a fictitious state of insolvency.

Claims and jurisdictional objection

On January 24, 2018, the claimants initiated arbitration proceedings against the respondent by their notice of and request for arbitration, in which they requested, inter alia, a tribunal declaration that Colombia had violated the treaties, customary international law, and Colombian law concerning their investments. In response, the respondent challenged the jurisdiction ratione personae of the tribunal since it found that the claimants’ claims “are not asserted by foreign investors as required by the TPA, as a result of which there is an absence of jurisdiction ratione personae.”

Based on the parties’ submissions, the tribunal summarized that the parties did not dispute the fact that the claimants were dual national citizens of the United States and Colombia, but they disagreed on the claimants’ dominant nationality and, consequently, on whether the tribunal has jurisdiction ratione personae under the TPA to hear the claimants’ claims.

Tribunal’s findings and analysis

To address the claimants’ dominant nationality question, the tribunal has adopted a “one-divided-by-four test,” whereby the permanent and habitual place of residence is divided into (i) the location of permanent or habitual residence; (ii) the centre of the claimants’ family’s social, personal, and political lives; (iii) the centre of their economic lives; and (iv) how claimants identify themselves in terms of nationality. The tribunal applied this four-prong test as follows.

Born in Colombia, studied abroad, and repatriated for work purposes.

All three claimants were born and raised in Colombia. Each of them made his permanent home in Bogotá in 1994 (Felipe), 2004 (Enrique), and 2007 (Alberto). None has maintained a permanent home or habitual residence elsewhere, including in the United States, where they keep what they describe as a vacation home which is used for occasional visits.

Tellingly, all three claimants spoke in terms of coming back to or returning to Colombia. They all did so at the behest of their father, a prominent Colombian businessman, to allow him to entrust the management of a long-established and successful business to his three sons.

The tribunal opined that it is unarguable on the evidence before it that Colombia is the focal point of the Carrizosa family’s business activities and claimants’ professional lives. All three claimants are employed in Bogotá in senior positions by family-owned entities. They have offices in the same building in Bogotá. All three claimants attributed the principal reason for their return to Colombia to their assumption of senior management roles in their father’s numerous significant family business interests.

Bogotá is much more than merely the centre of claimants’ business and professional lives

Enrique Carrizosa and his wife have made the city their home. Their two daughters were born in Bogotá (in 2007 and 2009) and are being raised and educated there. Felipe Carrizosa’s two daughters (aged 8 and 18) were born in Bogotá. They have been raised and educated there, and they live there with their mother, whom Carrizosa divorced 6 or 7 years ago. The daughter of Alberto Carrizosa’s former Colombian partner, whom he raised as his own, still lives in Bogotá, as does her mother. The claimants’ mother, now widowed, is also resident in Bogotá. The claimants’ social lives are centred around their homes, shared country residence, city, and country club memberships.

In the hearing, the claimants said that: “The family matrix constitutes an important consideration that is deeply intertwined with cultural affinity, language, and education.” They also suggested that: “sustained analysis of this factor … compellingly demonstrates the claimants’ dominant and effective nationality is that of the United States.” The tribunal argued that it might be that claimants placed considerable weight upon their own subjective feelings of being American, but they were not matters that the tribunal could begin to evaluate on any objective basis and for which, in any event, there was no extrinsic evidentiary support.

The tribunal had considered the import of the claimants’ education elsewhere. Faced with the objective evidence that: (i) all of claimants’ present or past spouses/life partners reside or have resided in Colombia; (ii) all four of Enrique’s and Felipe’s children were born in Colombia, they have received all of their schooling in Colombia, and they have resided in Colombia all their lives (as has the daughter of Alberto Carrizosa’s former Colombian partner); (iii) claimants’ parents/surviving parent resided in Colombia at the critical dates; and (iv) one of the claimants’ aunts lives in Colombia and, of the seven of nine first cousins who are Colombian, five have lived in Colombia for many years; the tribunal stated that they could not agree that a compelling case had been made for a finding that the dominant and effective nationality of claimants was that of the United States.

The evidence is indicative of the claimants’ active participation in the Colombian elections but not those in the United States

In terms of commitment to public life, all three claimants voted in Colombian presidential and congressional elections in 2014 and 2018, and all three have contributed either individually or through their family businesses to political campaigns in Colombia. Only Enrique voted (by mail) in the 2020 U.S. election; Felipe stated unequivocally that he had never exercised a vote in the United States, and there is no evidence as to whether Alberto had participated in a U.S. election beyond a suggestion in oral evidence that he had contributed to a congressional seat campaign in 2000.

Taking claimants’ submission that voting and participation in elections are “critical components of an individual’s social matrix” entirely at face value, the evidence is indicative of claimants’ active participation in the Colombian elections, but not those in the United States.

Claimants identified themselves as Colombians

The tribunal further notes that at the critical dates, claimants were holding themselves out as Colombian nationals, citing their Colombian ID numbers, for the proceedings against Colombia before the Inter-American Commission on Human Rights. No mention is made of their dual U.S. nationality.

Treatment of past dual-nationality ISDS cases

The claimants requested that the tribunal consider the dissenting opinion in Ballantine v. Dominican Republic.^[1] The dissenting opinion suggested that based on Ballantine’s habitual residence during her lifetime, the centre of her personal and professional interests, her family life, and her maintenance of significant ties to the United States, her dominant and effective nationality under customary international law should be considered that of the United States. The dissenting arbitrator wrote:

Claimants said that what they described as the similar narrow imperatives commanding claimants to live in Colombia support a finding that claimants’ dominant and effective nationality is that of the United States.

The tribunal did not accept that submission. First, and self-evidently, there were no “narrow imperatives” in play in the claimants’ acquisition of dual nationality. Second, the suggestion that there were narrow imperatives akin to those weighing on Ballantine, which commanded claimants to live in Colombia, is misconceived. Claimants did not go to Colombia; they returned to Colombia. They did so to assume responsibilities in a long-established and successful business created by their father.

Once back, they stayed—for decades. They raised their families in Bogotá and established no habitual or permanent residence anywhere else in the world. For all the tribunal knows, their lives behind their front doors may be the embodiment of modern American family life, but as to that, the tribunal has only the claimants’ words and expressions of subjective feeling.

The tribunal has adopted a holistic approach to its analysis, albeit with the requisite emphasis on the period of the critical dates. Faced with irrefutable evidence of claimants’ long and deep-rooted connections with Colombia over many years, it would be a leap to conclude that, all of the evidence susceptible to objective review to the contrary, Claimants’ dominant nationality was that of the United States. There is, in the tribunal’s opinion (and to adopt the language of respondent’s submission): “no way anyone could reasonably conclude from all this that [claimants] were predominantly U.S. [nationals]” (Award, para. 252).

Tribunal’s conclusion on the matter

The tribunal accepted the respondent’s contention that this is a Colombian family suing Colombia in an international forum, which runs counter to “one of the most long-standing and time-honored principles of international law, which is you cannot sue the State of your nationality in an international forum” (Award, para. 253). As a consequence, the tribunal upheld the respondent’s objection to the tribunal’s jurisdiction ratione personae. Given that conclusion, it was unnecessary to consider any of the other grounds of objection raised by the claimants to the tribunal’s jurisdiction over their claims.

The present case, while factually specific, provides a useful reference point in the analysis of dominant nationality for further ISDS cases.

Thao-Ngan Ngo is an LL.M. candidate at Europa-Institut at Saarland University, specializing in foreign trade and investment law.

[1] Michael Ballantine and Lisa Ballantine v. The Dominican Republic, PCA Case No. 2016-17, Partial Dissent of Ms. Cheek on Jurisdiction (03.09.2019).