Soufraki v. United Arab Emirates, ICSID Case No. ARB/02/7, Award b.
b. “National of another Contracting State” - any natural person
dated 7 July 2004
Claimant: Hussein Nuaman Soufraki
Respondent: United Arab Emirates
PROCEDURAL FACTS:
Soufraki requested for an arbitration against UAE before the ICSID Tribunal
about a Concession Agreement between him and Dubai Department of Ports
and Customs in 2000. Under this agreement, Soufraki was awarded a
concession for 30 years to develop, manage, and operate the Port of Al
Hamriya and its surrounding area. After which, it shall be reverted to the
Dubai Department of Ports and Customs. In that agreement, he was referred
to as a Canadian national.
However, he describes himself as an Italian national and invokes the Bilateral
Investment Treaty (BIT) between Italy and UAE, which he claims that UAE
breached. He claims damages for such breach.
During the first session, UAE challenged the jurisdiction of the ICSID Arbitral
Tribunal (International Centre for Settlement of Investment Disputes) on the
ground that Soufraki was not an Italian under Italian law so as to entitle him
to invoke the BIT.
ISSUES: WON the dispute falls within the jurisdiction of the ICSID:
a) WON Soufraki is an Italian national according to Art. 25(2)(a) of the
Convention on the Settlement of Investment Disputes Between
States and Nationals of Other States (Convention)
b) WON Soufraki belongs to the class of investors whom UAE has
offered consent to ICSID arbitration pursuant to BIT.
RELEVANT LAWS:
1. As to the nationality requirement, the Convention states that:
a. Jurisdiction of the CSID shall extend to any legal dispute
arising directly out of an investment between a Contracting
State and a national of another Contracting State, which they
must consent in writing to submit to ICSID. Once they have
given their consent, no party may withdraw unilaterally.
who had the nationality of a Contracting State other than the
State party to the dispute
c. “Investor of the other Contracting State” - a natural person
holding the nationality of that State (Italy) in accordance with
its law.
2. Italian law requirements of a national:
a. An Italian national loses his Italian citizenship when he
spontaneously acquires a foreign citizenship and establishes
his residence abroad.
b. However, one who lost his citizenship though such
acquisition may reacquire his Italian citizenship if he/she
submits a relevant declaration w/in 2 years from the entry
into force of the Italian Law No. 91.
c. Italian Law No. 91 of 1992: whoever lost his Italian
citizenship shall reacquire it one year after the date at which
he established his residence in the territory of Italy, save in
the case of explicit renunciation within the same time-limit.
POSITION OF THE PARTIES:
AS TO SOUFRAKI’S NATIONALITY
1. Both parties agree Soufraki was or became an Italian national before
1991
2. UAE: Soufraki lost his Italian nationality when he reacquired
Canadian nationality and took up residence in Canada in or about
1991.
3. Soufraki: Considers himself Italian as of right and choice and he
never intended to relinquish it.
4. Both parties agree that Soufraki could have reacquired automatically
his Italian nationality after 1992 by timely application or taking up
residence in Italy for less than a year but no application to reacquire
was ever made.
5. Soufraki: in order to reacquire his citizenship after 1992, he
personally saw the renovation of a hotel in Viareggio which his
company acquired. He moved in Feb. 1993, rented an office for 2
years and resided in Italy from March 1993 to April 1994.
6. UAE: evidence of Soufraki does not constitute substantial evidence
necessary under Italian law to establish that he became a resident
after 1992:
a. He could not show that he stayed in his 1993-1994 office;
b. He did not possess an Italian tax number before Jan. 2003;
c. He extensively traveled overseas during such period
 d. He was not registered as a resident with Italian local
authorities during such period but rather remained on the
register of Italians living overseas (“AIRE” register)
AS TO THE CERTIFICATES OF NATIONALITY
1. UAE’s contentions:
a. Questions of nationality are not within the exclusive
competence of the Italy
b. ICSID Tribunal has the power to determine disputed issues
of nationality and that it must look behind the Certificates of
Italian nationality which Soufraki produced since these
certificates merely constitute, at best, prima facie evidence
of nationality
c. The only Certificate which supports Soufraki’s claim is the
Certificate issued by the Italian Consulate General in
Istanbul in 2003. However, this cannot be relied upon since it
was issued w/o knowledge by the Italian authorities that
Soufraki lost his Italian nationality in 1991.
2. Soufraki:
a. Citing BIT between Italy and UAE, a “natural person” is a
natural person considered by one of the Contracting States
under its laws. Thus, it follows that the possession of Italian
nationality is a matter of Italian law, within the exclusive
competence of Italy. ICSID therefore is not competent to look
behind the Certificates to conclude that he is an Italian
national. He also claims that the Certificate he acquired in
Istanbul is conclusive evidence of his Italian nationality and
confirms his right to recourse to ICSID or the BIT
3. UAE:
a. Questioned whether the Consulate General in Istanbul is
aware of the loss of Mr. Soufraki’s Italian nationality by
reason of his naturalization as a Canadian and that there
was no evidence that the Consulate General was informed.
Soufraki countered by saying that he had revealed all that
the Ministry needed to know.
b. By describing himself in the Concession as a Canadian
national, he made a clear agreement on his nationality. The
reference as to his nationality was unobjectionable since it
was accurate since it could have merely referred to him as
an Italian national had UAE was informed and had it
recognized such fact.
AS TO THE REQUIREMENT OF EFFECTIVE NATIONALITY
1. UAE:
a. Even if Soufraki should be found to have been an Italian
national in 1991 or after 1992, his dominant nationality was
not Italian but Canadian
2. Soufraki:
a. Dominant or effective nationality is not today accepted as a
rule of customary international law and in any event finds no
support in the provisions of BIT or Convention
b. Even if considerations of dominant or effective nationality
were to be applied in this case, his connections with Italy
greatly outweighed his connections with Canada. UAE had
recognized his Italian nationality in entry and residence
permits, passport entries and like documents.
c. He could not possibly be said to have acquired Italian
nationality just to come within the protection of BIT between
Italy and UAE. His nationality was not a nationality of
convenience, bestowed, as in the Nottebohm case, in
circumstances of speed and accommodation.
d. Thus, it is unnecessary for ICSID Tribunal to pass upon the
question of dominant or effective nationality.
ISSUES w/ RULING:
1. Whether Soufraki, prior to 1991, was an Italian national - YES
Both parties agree that prior to acquiring his Canadian nationality in 1991,
Soufraki was or became an Italian national.
2. If Soufraki was an Italian national prior to 1991, whether he lost
his Italian nationality when he acquired Canadian nationality
and took up residence in Canada in 1991 - YES
Italian Law No. 555 is clear and leave no room for interpretation. As a
consequence of his acquisition of Canadian nationality and residence in
Canada, Soufraki lost his Italian nationality in 1991 by operation of Italian
law. It appears from the evidence that Soufraki was unaware that he had lost
his Italian nationality at the time and became aware of it only in these
proceedings.
3. Whether Soufraki reacquired automatically his Italian nationality
according to Italian law in 1992
In accordance with accepted international and general national practice, a
party bears the burden of proving to the satisfaction of the Tribunal that he
was a resident for more than one year in 1993-1994 and that he was an
Italian national and therefore belongs to the class of investors of whom UAE
consented to ICSID jurisdiction.
Although residence does not imply continuous presence and does not
disallow travel, the Tribunal held that proof of some continuity of residence
during his one year of actual residence during such duration was required.
However, considering the totality of evidence, the Tribunal held that Soufraki
failed to discharge such burden of proof since he failed to demonstrate that
he established and maintained his residence in Italy during the period of
March 1993 to April 1994.

4. Whether the questions of nationality are within the exclusive

and dispositive competence of Italy or whether the CSID
Tribunal is entitled to look behind the passports etc. issued by
Italian authorities certifying Soufraki’s Italian nationality - YES

When, in international arbitral or judicial proceedings the nationality of a

person is challenged, the international tribunal is competent to pass upon
that challenge. It will accord great weight to the nationality of the State in
question and to the interpretation and application of that law by its
authorities. But it will in the end decide for itself whether, on the facts and law
before it, the person whose nationality is at issue was or was not a national.
In this case, the tribunal is empowered and bound to decide such issue.

However, the Tribunal is not bound by rules of evidence in Italian civil

procedure which requires “substantial” evidence. The Tribunal must consider
the totality of evidence and determine whether it leads to the conclusion that
Soufraki has discharged such burden of proof. Tribunal holds that Soufraki
cannot rely on the pleaded Certificates since he failed to prove that the
officers at Istanbul knew that he lost his Italian nationality when he acquired
his Canadian nationality.

VERDICT: since Soufraki was not an Italian national under the law of Italy
ICSID Tribunal has no jurisdiction to hear the dispute.