Originally from State Entities in International Arbitration

Preview Page

 

The question before us is at the same time very classic and very current. For a long time, States have been operating in the arena of international economic relations, especially when it comes to investment, through entities distinct from the States but that they continue to control, either more or less directly depending on the case. They may act through the organs of public authorities, either central or decentralized; they may also do so through entities to which they have conferred elements of governmental authority; finally, they may operate through private entities or persons who in fact act on behalf of the State. Thus, it is immediately clear that the concept of instrumentality (“émanation”) is extremely broad. It applies just as easily to federated states, provinces and public institutions as to private law companies. Under such conditions, one may question the intellectual rigor, if not the practical effectiveness, of relying on a notion that is so imprecise; but perhaps it is precisely the malleability of the concept of instrumentality that has caused its success.

In fact, in each of the cases concerned with this issue, as Professor Fadlallah noted at the outset, these different entities share a common characteristic, which is a significant element of identification, if not of autonomy: they all have their own legal personality. This legal personality, in principle or on the surface, in law and in fact, works to confer upon these instrumentalities an identity distinct from the State: these entities are not the State, which is indeed often why they were created as such!