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This article examines the application of the piercing the corporate veil concept in international arbitration. Interpretation of this concept is inconsistent even within one domestic legal system, and it is even less predictable in international arbitration when several legal systems come into play. Piercing the corporate veil may help to give a concrete practical meaning to the purpose of an arbitration agreement or a bilateral investment treaty. However, there are downsides of such piercing because it negates many of the benefits which the corporate form offers. Domestic courts are likely not to recognize and enforce an arbitration award piercing the corporate veil in the absence of a written arbitration agreement. Jurisprudence under the International Centre for Settlement of Investment Disputes (“ICSID”) Convention allows one to avoid the enforcement problem. However, the approaches of ICSID tribunals are inconsistent. This article identifies three major conceptual approaches ICSID tribunals took in the past, namely: (1) declining jurisdiction in the absence of an explicit arbitration agreement, (2) piercing the veil by looking into the issue of foreign control, and (3) piercing the veil on the basis of interpretation of the concept of “investment” in accordance with the intent of parties to the arbitration agreement or purpose of an international treaty. The practical advice offered by this article is to make written arbitration clauses as inclusive as possible, to avoid dealing with piercing the corporate veil altogether.

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