State-Owned Enterprises (SOEs) are an increasingly important component of the global economy, and are central to the economic life of certain major economies. But while SOEs continue to be key components of international economic activity, they pose certain challenges to international investment law when they act as transnational investors. In particular, SOEs pose both certain substantive concerns surrounding transparency, competition, politicization, and public policy as well as certain technical problems regarding when SOEs may properly seek protection under international investment agreements as investors, attribution of SOE conduct to States, and when SOEs may enjoy jurisdictional immunities. These particular challenges require specialized solutions in treaty drafting and arbitral practice.
State-owned enterprises (SOEs)—sometimes referred to as “instrumentalities” or “parastatals”—are an increasingly popular means through which States can interact with the global economy to achieve various public objectives through commercial means. SOEs exist across sectors—energy, infrastructure, utilities, transport, banking and finance, telecommunications, and others—and elude easy characterization: they can be as varied as the national laws under which they are constituted.