Originally from State Entities in International Arbitration

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I. INTRODUCTION

Given the extent to which States operate through instrumentalities, and permit them to ‘own’ what would otherwise be regarded as the State’s assets, it is hardly surprising that in the context of enforcement attention turns to holding the instrumentalities accountable for the State’s obligations, or ‘lifting the veil’ to use the familiar expression of English law. Unlike the more common question whether a ‘parent’ may be responsible for the liabilities of its ‘subsidiaries’, this paper asks the reverse, namely, whether a party, having obtained an arbitration award against a State, may seek enforcement against assets held by an instrument of that State. Given the increase in investor-State arbitration in recent years, this is likely to be an  increasingly important subject. The proliferation of bilateral investment treaties creates the environment for investors to claim directly against States, and a resulting surge in attempts to enforce the ensuing awards against assets of State entities seems likely.