Investor-State arbitration is intended to protect foreign investors while preserving the regulatory autonomy of host states. The tension between these two objectives becomes most visible when the nationality of a corporate investor is determined by formal incorporation rather than by ultimate control or the economic origin of capital. Tokios Tokelés v. Ukraine

ICSID Case No. ARB/02/18

is a leading case in this debate. The tribunal accepted jurisdiction over a Lithuanian company although Ukrainian nationals held an overwhelming majority of its shares

because the Ukraine-Lithuania bilateral investment treaty defined corporate nationality by reference to incorporation under the law of a contracting party. The decision therefore illustrates the value of textual certainty

but it also exposes the risk that investment treaties may be used by mailbox companies

round-tripping capital

or investors seeking treaty protection without a genuine cross-border economic connection. This article examines the case from three perspectives: the conflict between textual and purposive interpretation

the boundary between corporate personality and abuse of rights

and the tension between host-state sovereignty and pacta sunt servanda. It argues that future treaty practice should combine the predictability of the place-of-incorporation test with clearly defined substance

control

and anti-abuse inquiries. Such an approach can protect treaty certainty while preventing investment arbitration from becoming a channel for nationality laundering or circumvention of legitimate regulation.