Admissibility of claims for reflective loss raised by the shareholders in local companies in investment treaty arbitration

demirkol, eda cosar;

Foreign shareholders� claims seeking reflective loss that arises from the host State�s violation against the rights of the local company has been recently challenged in academic literature on investment treaty arbitration. The standing of shareholders in such investment treaty claims is an issue of admissibility of the claim rather than jurisdiction of the arbitral tribunal. This article discusses the admissibility of shareholder claims for reflective loss under general principles of international law and especially under the separate legal personality principle. For this purpose, while acknowledging that such claims are in general inadmissible, it explores the specific circumstances where these claims can be found admissible. This article also suggests the inclusion of explicit substantive protection in international investment treaties to provide a legal basis for some of these specific circumstances.