Sovereign Wealth funds in the ICSID: A New Approach to Standing

Author:Christopher Beus
Position:University of Utah S.J. Quinney College of Law
Pages:543-571
e Indonesian Journal of International & Comparative Law
ISSN: 2338-7602; E-ISSN: 2338-770X
http://www.ijil.org
© 2014 e Institute for Migrant Rights Press
rst published online 20 March 2014
543
SOVEREIGN WEALTH FUNDS IN THE
ICSID
A NEW APPROACH TO STANDING
CHRISTOPHER BEUS
University of Utah S.J. Quinney College of Law
E-mail: Christopher.Beus@law.utah.edu
Sovereign Wealth Funds are receiving increased attention in the sphere of international
foreign investment due especially to their instrumentality in the recovery from the
recent nancial crisis. ey present new challenges to investment tribunals such as the
ICSID in determining the nature of these entities and, in particular, whether they
are public or private in nature. is characterization is important for the purposes of
ICSID standing. To date the tribunal of CSOB v. Republic of Slovakia is the only
ICSID tribunal to directly take on the issue of standing as it relates to such entities.
CSOB hinged its determination of an entity’s relationship with the government
almost entirely on the governmental versus commercial nature of the specic activities
of the entity in question.
is article explores an alternative approach to CSOB’s methodology in the form
of State Attribution doctrine. State Attribution may provide a way to remedy the
shortcomings of CSOB’s approach by using a variety of factors adaptable to the diverse
and complex relationships between governments and SWFs. More importantly, it
could open the way for inquiry into the purpose behind an entity’s actions in making
such determinations. ese enhancements could better address the concerns of the
ICSID and the international community generally as they relate to SWFs.
Keywords: State Responsibility, Commercial Dispute Settlement, Foreign Direct
Investment, International Arbitration.
The Indonesian Journal of International & Comparative Law Volume I Issue 2 (2014) at. 543–571
Christopher Beus
544
I. INTRODUCTION
Sovereign Wealth Funds are receiving increased attention in the sphere of
international foreign investment due especially to their instrumentality
in the recovery from the recent nancial crisis and their close ties to their
respective governments. ey have presented new challenges in particular
to the ICSID in trying to determine whether these entities are public or
private in nature for the purposes of ICSID standing. To date the tribunal
of CSOB v. Republic of Slovakia is the only ICSID tribunal to directly take
on the issue of standing as it relates to such entities. e tribunal in CSOB
hinged its determination of an entity’s relationship with the government
almost entirely on the governmental versus commercial nature of the
specic activities in question. is article explores an alternative approach
to CSOB’s methodology in the form of State Attribution doctrine. State
Attribution may provide a way to remedy the shortcomings of CSOB’s
approach by using a variety of factors adaptable to the diverse and complex
relationships between governments and SWFs. More importantly, it could
open the way for inquiry into the purpose behind an entity’s actions in
making such determinations. ese enhancements could better address
the concerns of the ICSID and the international community generally as
they relate to SWFs.
In order to present these arguments, this article will rst present
information on SWFs and the concerns surrounding them. Second, it will
turn to their standing under the current ICSID methodology as found in
CSOB. Next, it will present the methodology of state attribution doctrine
after which it will compare the two methodologies. Finally, it will analyze
how well state attribution doctrine meets the interests of the ICSID and
the international community in dealing with SWFs in particular.
II. SOVEREIGN WEALTH FUNDS
Sovereign wealth funds belong to a larger group of entities called state-
controlled entities (SCEs). SCEs are increasing in number and inuence
in the realm of international foreign investment. ey gained considerable
recognition during the recent nancial crisis and played a key role in
stabilizing western nancial markets. SCEs may entail a state’s direct

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