Attribution in International Investment Law


This chapter examines the state of customary international law for international investment, i.e. the law that exists in the absence of an applicable treaty. After World War II, such a law was incomplete, vague, controversial, and without an effective enforcement mechanism for most investors, meaning that investors and their home governments had to find another way to protect the investments of their nationals. This would lie in the negotiation of investment agreements. Topics include the interests of States and investors shaping international investment law; the sources of international law; customary international law and general principles of international investment law; customary international law on expropriation and violation of State treaties; Challenges to Western views on international investment law; and gaps in customary international investment law. Where the applicable investment agreement establishes award rules, arbitral tribunals base their decision on those rules87 and supplement their analysis by referring to the Commission`s draft articles for matters not covered by those rules.88 However, specific attribution rules should not be confused with those which create only a positive obligation towards the host State. such as monitoring the behaviour of its enterprises.89 [Page 18] 8. The third question concerns the stage of the procedure at which award issues are to be dealt with. Although there is no legal obligation to prevent attribution from being heard at the stage of jurisdiction and respondent States sometimes object to jurisdiction because of the lack of attribution, the factual dimensions of the issue make them more appropriate on the merits.

While there is no dichotomy in the procedure between questions of jurisdiction and substance, this factual dimension does not raise any particular difficulties. But in two-part proceedings, the courts may either have to apply a prima facie test to attribution issues or join the no-attribution jurisdiction exception in this case. These different options have an impact on the duration and cost of the procedures. The Court distinguished between the strict meaning of attribution, which it considered applicable in the context of the international responsibility of States for the unlawful acts of its organs and officials, and the “broader questions of what constitutes the State”. It rightly pointed out (in paragraph 779) that the provisions of the ARTICLES OF THE ILC relating to attribution apply to the unlawful conduct of the State and stated that the “principles of attribution do not serve to assume responsibility for `non-unlawful acts` of which the State is presumed to be aware”. Next, it found that the host State`s participation in the sale of the bankruptcy was not a question of imputation, since no third party wished to hold the State liable for that conduct. If the jurisdiction of the tribunal is indeed based on the existence of conduct attributable to a State, regardless of whether such conduct constitutes a violation of a rule of international law, applicants must prove those facts in order for the court to have jurisdiction. Only if this is established can the court consider whether a particular conduct constitutes an offence or not. With regard to executive power, the courts have attributed the conduct of the state to the government, including its ministers and other officials acting in this capacity30 (i.e. the Directorate of a Free Economic Zone, 31 states, 32 local administrations, 33 entrepreneurs involved in government functions34). NAFTA expressly authorizes such an attribution in its Article 105.35 Many courts have concluded that the attribution of legislative acts to the state derives from its legislative power;28, however, have been reluctant to attribute the conduct of legislative members to the state.29 Given the current state of development of international investment law, it is surprising that to date neither the actual nature of the investor`s rights, as a result of investment agreements, nor are the possible consequences for the investor, States and international law sufficiently defined. This is all the more surprising since the nature and possible limits of investor rights are not only of theoretical interest, but are also crucial for solving many key practical problems and for positioning international investment law in international law.

In addition, recent arbitral awards on the fundamental question of whether the investor`s rights are direct, derivative or conditional in nature, Archer Daniels (2007), Corn Products (2008) and Cargill (2009), show diametrically different approaches.