Attribution of Conduct to a State in Investment Disputes: Conditions under which a state is responsible for the conduct of local governments, para-statal entites and public corporations

Author Name NISHIMURA Yumi  (Sophia University)
Creation Date/NO. October 2008 08-J-032
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The state as an abstract legal entity cannot, in reality, act itself. Therefore, we need rules to decide whose conduct is attributable to the state under international law. Attribution is the legal fiction which assimilates the actions or omissions of various organs or agents to the state itself and renders the state liable for damage caused. Under general international law, it is well established that the conduct of an organ of the state is attributable to that state. However, in a number of countries, operational matters concerning foreign investments are not handled by the central government, and the respondent states in investment disputes often deny their responsibility toward foreign investors claiming that the conducts in question being perpetrated by such actors as provinces, municipalities, para-statal entities and public corporations cannot be attributed to them. This paper studies the conditions under which conducts that are claimed to violate investment treaties are regarded as being attributable to states.