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ICSID Case Law - Part 1, Chapter 2 - State Entities in International Arbitration

Author(s): 
Ibrahim Fadlallah
Page Count: 
12 pages
Media Description: 
PDF from "State Entities in International Arbitration"
Published: 
June, 2008
Jurisdictions: 
International
Practice Areas: 
Investment Disputes,
International Institutions and Rules,
ICSID,
States as Parties
Author Detail: 

Ibrahim Fadlallah, Emeritus Professor of Law, University of Paris X; Professor Fadlallah has acted as arbitrator or counsel in numerous arbitration proceedings, ad hoc and under the Rules of the ICC, ICSID, the French Arbitration Association, and the European Development Fund. He is a former Member of the ICC International Court of Arbitration and a Member of the Council of the ICC Institute of World Business Law. He is also a Founding Member of the Euro-Arab Forum on Arbitration and a member of the International Law Institute.

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Originally from State Entities in International Arbitration

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An instrumentality of a State is not the State itself, but parties often seek to treat it as the State and merge it with the State in order to hold the State liable for its acts. An instrumentality is distinct from the State because it has its own legal personality, but this thin veneer cannot disguise the fact that the entity is a creature of the State. This definition of State instrumentalities excludes State organs and agencies that do not enjoy their own legal personality. Legal personality is the condition underlying the emergence of the concept of instrumentality (“émanation”). In its absence, there is identity: a State cannot be distinguished from its Government, its ministries, and its various agencies and organs (legislative, executive, and judicial). The State is directly concerned and therefore responsible for such entities. However, as soon as an entity has a distinct legal personality, the question of instrumentality may arise. The issue covers a broad range of entities, with uncontrollable variations in terminology (instrumentality, alter ego, para-statal entity): political subdivisions, territories (federated States, provinces, territorial communities), State banks, public services or agencies endowed with legal personality, and public companies, which, often as a legacy of socialist experiments, particularly in developing countries, are called “national” companies.