Originally from State Entities in International Arbitration

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The question of the relationship between a State and its instrumentalities is not a recent one in international law. This issue arises in investment arbitration each time a foreign investor submits a claim against a host State to an international tribunal for the compensation of damages incurred as a result of the conduct of a State instrumentality.

There is plentiful and longstanding jurisprudence on this matter, with decisions dating back to the beginning of the twentieth century.1 For instance, in the award rendered in 1903 in the Davy case (involving injuries incurred by a British subject because of the acts of a civil officer appointed by the State of Bolivar, Venezuela), the umpire held that: