The hybrid roles of state enterprises (SEs) in international investment disputes have puzzled international arbitrators and commentators, resulting in conflicting decisions on whether SEs should be considered private corporations or agents of states. This Article contributes to resolving this puzzle by providing the most updated and systematic case studies of investor-state disputes involving SEs. It identifies two competing methodologies developed by international tribunals to determine the roles of SEs: one is an “actor-focused analysis,” which emphasizes the general characteristics of the SEs; and the other an “action-focused analysis,” which targets their specific conduct. The methodological differences among tribunals result in competing decisions, creating tensions in international law, also present challenges to domestic regulatory frameworks concerning SEs’ internationalization.

The Article evaluates and compares the two competing legal methodologies from both doctrinal and policy perspectives. Responding to criticisms of the actionfocused methodology in existing literature, this Article argues that the actionfocused methodology is supported by authoritative international law sources, including the text, history, and commentaries of international treaties and customary international law. The action-focused approach is also more sensible as a policy matter, because it creates a more effective and responsive arbitral procedure, ensures the consistency of international investment arbitration, and increases the coherence of international law. It also better serves domestic policy goals among national security, fair competition, and economic development.

Continue reading State Enterprises in International Investment Disputes: Focus on Actor or Action?