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BARCELONA Traction Case Digest

Belgium sued Spain on behalf of Belgian nationals who had invested in Barcelona Traction, a Canadian company operating utilities in Spain. Spain had banned foreign currency transfers, leading to the company's bankruptcy in 1948. The International Court of Justice rejected Belgium's request, finding that as the company was Canadian, Belgium did not have the right to diplomatic protection for shareholders of a foreign company. The harmful acts were against the company's rights, not the shareholders' individual rights. Nationality states of shareholders cannot exercise diplomatic protection on their behalf.

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4K views1 page

BARCELONA Traction Case Digest

Belgium sued Spain on behalf of Belgian nationals who had invested in Barcelona Traction, a Canadian company operating utilities in Spain. Spain had banned foreign currency transfers, leading to the company's bankruptcy in 1948. The International Court of Justice rejected Belgium's request, finding that as the company was Canadian, Belgium did not have the right to diplomatic protection for shareholders of a foreign company. The harmful acts were against the company's rights, not the shareholders' individual rights. Nationality states of shareholders cannot exercise diplomatic protection on their behalf.

Uploaded by

Beverlyn Jamison
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
  • Case Digest: Summarizes the international legal case between Belgium and Spain over Barcelona Traction, focusing on facts and Belgium's right to diplomatic protection.

BARCELONA Traction, Light and Power Company, Limited (Belgium v.

Spain) (New Application: 1962)

CASE DIGEST

Facts.

Barcelona Traction, Light and Power Company was a Canadian company that operated and provided
light and power utilities in Spain but was owned mostly by Belgian holding companies. On behalf of
Belgian nationals (P) who had invested in the company, Belgium (P) sued Spain (D) on the premise that
Spain (D) was responsible for acts in violation of international law that had caused injury to the
corporation and its Belgian shareholders (P).

What happened was that, since Barcelona Traction Light had foreign investors, the company issued
several series of bonds, principally in sterling. However, the Spanish Government later banned the
transfer of foreign currency from Spain, which led to the bankruptcy of the company in 1948.

Issue.

Does Belgium have the right to use its diplomatic protection for the Belgian shareholders of a Canadian
company and therefore stand before the ICJ.

Held.

In this case, the Court made a distinction between two separate entities: the company and the
shareholder, which are ruled by different law. The company was Canadian and the shareholders were
Belgians. The Court emphasized the fact that the harmful acts attributable to Spain aimed at the
company’s rights and not at the shareholders’ own rights.

Thus, in its judgement of 1970, the International Court of Justice rejected the request of the Belgian
government and declared Belgium as not qualified to stand before the Court as it did not have jus
standi, or recognized rights, to exercise diplomatic protection for its nationals. The Nationality State of
shareholders cannot sue diplomatic protection.

BARCELONA Traction, Light and Power Company, Limited (Belgium v. Spain) (New Application: 1962) CASE DIGEST Facts. Barcelon

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