1984 Jurisdiction: The arbitration clause in the Establishment agreement conferred upon SOABI, a national of Senegal, the right to bring ICSID arbitral proceedings. The clause showed that the parties had not intended to deny SOABI’s Senegalese nationality, but, rather, that notwithstanding its nationality, they had agreed that it would be deemed a national of another contracting state by reason of it being controlled by foreign interest.
An interpretation which had the effect of limiting the protected foreign interests only to those which had immediate control over the company would be contrary to the purpose of the convention, namely, to reconcile the whish of states hosting foreign investments to see those investments carried out through companies established under local law, on the one hand, and their desire to give those companies the capacity to be parties to procedures under the auspices of ICSID, on the other.
The investors might be led, for reasons of their own, to invest their funds through intermediaries, while retaining the same degree of control over the national company as they would have been able to exercise as direct shareholders. Indirect control by nationals of contracting states of the company established under local law was, therefore, sufficient to satisfy the nationality requirements of art 25.
Accordingly, although the nationality of Flexa was Panamanian, nationals of Belgium, a Contracting State, exercised control over Flexa, and SOABI therefore met the nationality requirements of the Convention. Furthermore the Senegal government could not been misled by the declaration that the location of the dead office of Flexa was in Geneva and not in Panama, Flexa was known to be a corporation of convenience, its interests had at all times been represented by Belgian nationals.