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A. Constituent Subdivision or Governmental Agency When the party representing the Contracting State is not the government itself but only a "constituent subdivision" or a governmental "agency," then two special requirements must be fulfilled pursuant to Article 25(l) and (3) of the Convention: a) the subdivision or agency must be designated by the Contracting State to the Centre; and b) the consent given by the subdivision or agency must be either: i) approved by the State; or ii) one as to which the State has notified the Centre that no such approval is required. While the clause suggested below does not9 directly fulfill these requirements, it constitutes a convenient reminder of the steps that should be undertaken—preferably before the effective date of the consent clause. B. Stipulation of Nationality of Investor If the investor is a natural person, the Convention requires that the investor be a national of a Contracting State other than the host State both on the date of consent and on the date of the registration of the request for conciliation or arbitration, and the investor may not on either of these two dates also have the nationality of the host State. If the investor is a juridical person then, except as noted in Section III(C) below, it must merely have the nationality of a Contracting State other than the host State on the date of consent. While the Convention does not require that nationality be specified in the consent agreement and a stipulation of nationality cannot correct an actual disability (again except as stated in Section III(C)), it may be useful to specify, by means of a clause such as the one below, the nationality of the investor. C. Agreement that a Juridical Person is Under Foreign Control If the investor is a juridical person that on the date of consent has the nationality of the host State, then Article 25(2)(b) of the Convention still permits the Centre to assume jurisdiction if the parties have agreed that "because of foreign control" the juridical person "should be treated as a national of another Contracting State for the purposes of [the] Convention." When this is the case, the parties may record their agreement as to the nationality of the investor in a clause such as the one set forth below. D. Preservation of Rights of Investor after Compensation A number of States have developed schemes for insuring their nationals, generally through governmental agencies, against losses that may be suffered in relation to foreign investments. There are also at present two intergovernmental agencies—the Multilateral Investment Guarantee Agency and the Inter-Arab Investment Guarantee Corporation—that administer similar investment insurance schemes. If such a governmental or intergovernmental agency indemnifies an investor, the agency will normally become subrogated to the investor's rights. The agency may nevertheless be unable to avail itself of such agreement providing for the resolution of disputes under the Convention as may originally have been concluded between the investor and the host State. This is so because ICSID's facilities are not available for proceedings between governmental entities or between governments and intergovernmental organizations. It may therefore be necessary that in any dispute the proceeding be conducted by the investor. The following clause may be used to cover this situation. 9 - With the exception of the alternative presented in the text accompanying infra note 10.
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