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Investor Presentaiton

98 INVESTOR-STATE DISPUTE SETTLEMENT: A SEQUEL Under this approach, the local subsidiary may itself bring a claim against the host State as long as it is "controlled" by the foreign investor, i.e. the investor has the power to exercise decisive influence over the management and operation of the subsidiary."³ 93 Another technique used to achieve essentially the same result employed in the NAFTA and a number of subsequent IIAS is to allow foreign investors to bring claims not only on their own behalf but also on behalf of the local enterprises which they own or control, directly or indirectly. The Australia-Mexico BIT (2005) provides an example: "Article 13. Arbitration: Scope and Standing and Time Periods An Investor of a Contracting Party on its own, or on behalf of an enterprise of the other Contracting Party that the Investor owns or controls, directly or indirectly, may submit to arbitration a claim that the other Contracting Party has breached an obligation under this Agreement and that the Investor or such enterprise has incurred loss or damage by reason of, or arising out of, that breach." (Emphasis added). Article 13 effectively enables enterprises that are even partially foreign-owned (as long as they are foreign-controlled) to recover all of the damage that has been caused to the enterprise by the IIA 93 In order to add further clarity to what constitutes ownership and/or control, some IIAs specifically define these terms as it is done in Article 1(3) of the Japan-Peru BIT (2008): "An enterprise is: (a) 'owned' by an investor if more than 50 percent of the equity interest in it is owned by the investor; (b) 'controlled' by an investor if the investor has the power to name a majority of its directors or otherwise to legally direct its actions" (emphasis added). UNCTAD Series on International Investment Agreements II
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