Abuse of Process in International Investment Arbitration and Evaluation of Cascade v Türkiye ICSID Award

Ahmet Dülger

Article Details

Abuse of Process in International Investment Arbitration and Evaluation of Cascade v Türkiye ICSID Award

Authors:

Ahmet Dülger

Publisher:

Sakarya University

Main Topics:

Hukuk (Diğer)

Journal:

Sakarya Üniversitesi Hukuk Fakültesi Dergisi Vol.13 Issue 1, pp.210-244

Document Type:

Article

Publication Date:

10/2025

Document Language:

Turkish

Document ID (Org No.):

2001340579

pISSN:

2147-768X

Keywords:

Abstract:

 International investment arbitration usually takes place between the foreign investor and the host state, according to the BITs. These cases may be ad hoc or before arbitration centers such as ICSID, PCA. Investors who do not meet the requirements of the BITs cannot benefit from the foreign investment protection provisions. It is possible for a domestic investor to create the appearance of the existence of an international investment for the sole purpose of benefiting from BITs and ICSID. Since this constitutes an abuse of process in international investment arbitration, the jurisdiction of the arbitrators may be declined. Investments that are not intended to be protected by the BITs and the ICSID Convention may be prevented from benefiting from these agreements. In Cascade v. Türkiye ICSID case, the Arbitral Tribunal dismissed the case on jurisdictional grounds, finding that the Claimant was not a genuine foreign investor. It was held that the fact that Cascade took over the investment and carried out transactions that may constitute an investment in Türkiye after the domestic investor was in a position to foresee a state intervention against it did not fulfill the jurisdiction requirements for ICSID arbitration. It is stated in the decision that the abuse of process may be in question not only in cases of restructuring, but also in cases of acquisition. This article analyzes many international investment arbitration decisions, including the Cascade decision, and evaluates the elements of the issues, including foreseeability, in the context of abuse of process.

 International investment arbitration usually takes place between the foreign investor and the host state, according to the BITs. These cases may be ad hoc or before arbitration centers such as ICSID, PCA. Investors who do not meet the requirements of the BITs cannot benefit from the foreign investment protection provisions. It is possible for a domestic investor to create the appearance of the existence of an international investment for the sole purpose of benefiting from BITs and ICSID. Since this constitutes an abuse of process in international investment arbitration, the jurisdiction of the arbitrators may be declined. Investments that are not intended to be protected by the BITs and the ICSID Convention may be prevented from benefiting from these agreements. In Cascade v. Türkiye ICSID case, the Arbitral Tribunal dismissed the case on jurisdictional grounds, finding that the Claimant was not a genuine foreign investor. It was held that the fact that Cascade took over the investment and carried out transactions that may constitute an investment in Türkiye after the domestic investor was in a position to foresee a state intervention against it did not fulfill the jurisdiction requirements for ICSID arbitration. It is stated in the decision that the abuse of process may be in question not only in cases of restructuring, but also in cases of acquisition. This article analyzes many international investment arbitration decisions, including the Cascade decision, and evaluates the elements of the issues, including foreseeability, in the context of abuse of process.

 International investment arbitration usually takes place between the foreign investor and the host state, according to the BITs. These cases may be ad hoc or before arbitration centers such as ICSID, PCA. Investors who do not meet the requirements of the BITs cannot benefit from the foreign investment protection provisions. It is possible for a domestic investor to create the appearance of the existence of an international investment for the sole purpose of benefiting from BITs and ICSID. Since this constitutes an abuse of process in international investment arbitration, the jurisdiction of the arbitrators may be declined. Investments that are not intended to be protected by the BITs and the ICSID Convention may be prevented from benefiting from these agreements. In Cascade v. Türkiye ICSID case, the Arbitral Tribunal dismissed the case on jurisdictional grounds, finding that the Claimant was not a genuine foreign investor. It was held that the fact that Cascade took over the investment and carried out transactions that may constitute an investment in Türkiye after the domestic investor was in a position to foresee a state intervention against it did not fulfill the jurisdiction requirements for ICSID arbitration. It is stated in the decision that the abuse of process may be in question not only in cases of restructuring, but also in cases of acquisition. This article analyzes many international investment arbitration decisions, including the Cascade decision, and evaluates the elements of the issues, including foreseeability, in the context of abuse of process.

 Uluslararası yatırım tahkimi genellikle devletler arasında yapılmış yatırımların teşviki ve korunması anlaşmalarının YKTK kabul ettiği usulde yabancı yatırımcı ve ev sahibi devlet arasında gerçekleşir. Bu davalar ad hoc olabileceği gibi ICSID, PCA gibi kurumsal tahkim merkezleri nezdinde de görülebilir. YKTK anlaşmalarının gerektirdiği şartları sağlamayan yatırım ve yatırımcılar bu anlaşmalardaki esas ve usule dair yabancı yatırımın korunmasına dair hükümlerden faydalanamazlar. Ancak, yerli bir yatırımcının yalnızca YKTK anlaşmalarındaki uluslararası yatırım tahkimi korumasından faydalanmak amacıyla görünüşte bir yabancı yatırımcı olduğu ve uluslararası yatırım yaptığı izlenimi oluşturması mümkündür. Yerli yatırımdaki hisselerin muvazaalı olarak yabancı kişilere devredilmesi, gerçek bir yatırım maksadıyla yapılmayan ev sahibi ülkeye yönelik para transferleri gibi birçok yöntemle bu izlenim oluşturulabilir. Ancak bunun uluslararası yatırım tahkiminde dava hakkının kötüye kullanılması teşkil etmesi nedeniyle hakemlerin yetkisinin doğması engellenebilir. Böylece, YKTK Anlaşmaları ve ICSID Konvansiyonu gibi anlaşmalarla kendisine koruma sağlanması amaçlanmayan yatırımların uluslararası yatırım tahkimi korumasından faydalanması engellenmiş olabilir. Dava hakkının kötüye kullanılmasının söz konusu olduğu davalardan biri olarak Cascade v Türkiye ICSID davasında Hakem Heyeti Davacının gerçek bir yabancı yatırımcı olmadığından bahisle dava hakkının kötüye kullanılması tespitinde bulunarak davayı yetki yönünden reddetmiştir. Yerli yatırımcının kendisine yönelik bir devlet müdahalesini öngörebilecek durumda olmasının akabinde Cascadeın yatırımı devralması ve Türkiyede yatırım teşkil edecek işlemler yapmasının ICSID tahkimine yönelik hakemlere geçerli bir yetki vermediği kabul edilmiştir. Dava hakkının kötüye kullanılmasının yalnızca yeniden yapılandırma hallerinde değil, şirket hisselerini devralma halinde dahi söz konusu olabileceği kararda belirtilmiştir. Makalemizde Cascade v Türkiye kararı dahil birçok uluslararası yatırım tahkimi kararı incelenerek dava hakkının kötüye kullanılması bağlamında öngörülebilirlik dahil meselelerin unsurları değerlendirilmiştir.

Article Details

Abuse of Process in International Investment Arbitration and Evaluation of Cascade v Türkiye ICSID Award

Authors:

Ahmet Dülger

Publisher:

Sakarya University

Main Topics:

Hukuk (Diğer)

Journal:

Sakarya Üniversitesi Hukuk Fakültesi Dergisi Vol.13 Issue 1, pp.210-244

Document Type:

Article

Publication Date:

10/2025

Document Language:

Turkish

Document ID (Org No.):

2001340579

pISSN:

2147-768X

Investment

Arbitration

ICSID

Abuse of Process

Bilateral Investment TreatyYatırım

Tahkim

ICSID

Dava Hakkının Kötüye Kullanılması

Yatırımların Karşılıklı Teşviki ve Korunması Anlaşması

Issues

Article Details

Authors: Ahmet Dülger

Publisher: Sakarya University

Main Topics: Hukuk (Diğer)

Journal: Sakarya Üniversitesi Hukuk Fakültesi Dergisi Vol.13 Issue 1, pp.210-244

Document Type: Article

Publication Date: 10/2025

Document Language: Turkish

Document ID (Org No.): 2001340579

pISSN: 2147-768X

Issues

Authors:

Ahmet Dülger

Publisher:

Sakarya University

Main Topics:

Hukuk (Diğer)

Journal:

Sakarya Üniversitesi Hukuk Fakültesi Dergisi Vol.13 Issue 1, pp.210-244

Document Type:

Article

Publication Date:

10/2025

Document Language:

Turkish

Document ID (Org No.):

2001340579

pISSN:

2147-768X