• Tutorial video

Author

Ms Isabel San Martin

Associate in International Arbitration - LALIVE

Editor

Dr Daniel Müller

Member of the Paris Bar

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Attribution

I. Notion

1.

“Attribution” denotes “the operation of attaching a given action or omission to a State” under international law.1 Under Article 2 of the Draft Articles on State Responsibility, attribution is one of the elements to finding an internationally wrongful act;2 hence, “all international claims are based on attribution”.3

2.

The procedural nature of the question on attribution has been discussed in-depth by tribunals.4 Some found it useful to sometimes deal with the matter at the jurisdictional stage,5 notably in relation with jurisdiction ratione personae.6 (See further Jurisdiction Ratione Personae, Section VII) Others found it more convenient to analyze it on the merits.7

3.

The concept of attribution has been used by some tribunals, not only to attribute an unlawful conduct to the host State, but also to define whether the claimant is an investor of a contracting State and not the contracting State itself.8 However, it has been ruled that the rules of attribution cannot be used as a way to bar an investor from introducing a claim on the basis of a BIT.9 (For more case law, see State-Owned Enterprises)

II. Legal framework and scope of application of the rules of attribution

4.

The rules of attribution under international law are reflected in the International Law Commission’s Articles on State Responsibility (“ILC Articles”). The relevant provisions of the ILC Draft Articles have been recognised as the most authoritative statement of law, a codification of customary international law10 or the “general legal principles”.11 Arbitral tribunals have referred to those rules since most investment agreements as well as the ICSID convention do not contain any rules on attribution.12

5.

They apply to questions of international responsibility, including for the breach of obligations under bilateral or multilateral investment treaties, in investment arbitration,13 to the extent that an IIA or another special law does not displace them.14 (See Section IV below) However, those rules are not necessarily applicable to the issue of attribution of conduct to the State or State entities under municipal law or in respect of contractual liability, nor can they create or modify the extent or content of obligations arising under a contract.15

6.

The majority16 of arbitral tribunals consider that the rules governing the issue of attribution may differ depending on whether the conduct at stake is an alleged violation of a contract or an investment treaty,17 even if the conclusion ought to be the same.18 (See further Treaty-claims Contract claims)

III. Rules of attribution under the ILC Draft Articles and application in investor-State disputes

7.

Under international law, conduct (acts or omissions)19 is attributed to a State in different ways, which are set out in Articles 4 through 11 of the ILC Draft Articles. These rules are alternative routes to determine attribution and are mutually exclusive, since attribution can only be found under one article at a time.20

A. Article 4: Conduct of State organs

 

8.

Under Article 4 of the ILC Draft Articles, the conduct of “any state organ,” whether it exercises “legislative, executive, and judicial or any other type of functions” is attributable to a State,21 even if it “exceeded its competence under internal law”.22 The claimant must provide evidence of an act committed by the State organ.23

9.

“State organ” is understood in a broad sense, including organs of government and officials at all levels, whether at the central or local level.24 A State’s domestic law is relevant in this respect to characterize an organ,25 although the internal status of an entity can be outweighed by other factors demonstrating that it is indeed a State organ.26 An entity can be defined as a de jure or de facto State organ, the latter requiring proof of a dependency to the host State.27

1. Legislative organs

10.

Numerous tribunals have found attribution of legislative acts to the State as emanating from its legislative power;28 but hesitated on attributing legislative members’ behavior to the State.29

2. Executive organs

11.

In relation to the executive branch, tribunals have attributed to the State conduct of the Government, including its Ministers and other Government officials acting in such capacity30 (i.e., directorate of a free economic zone,31 federal State,32 local government,33 contractor involved in governmental functions34). NAFTA explicitly allows for such attribution under its article 105.35

3. Public sector entities

12.

Public sector entities have also been considered as State organs36 (privatization agency,37 central bank,38 tax authority,39 police force,40 media council41 - although not its members42 –, administrative authority43).  Although certain tribunals have found that a public entity, having separate legal personality, may not be a “State organ” in the sense of Article 4 of the ILC Draft Articles,44 – in spite of ownership by the State of the separate entity,45 this does not necessarily imply that conduct of such entities is not attributable to the State under extraordinary circumstances46 or under other rules and principles of attribution.47

13.

Other tribunals considered that having a separate legal personality is a strong indication of the absence of a state organ, but is not decisive.48

4. Judicial organs

14.

Acts of the judiciary,49 including courts,50 prosecutors,51 or enforcement agents52 are also considered as State acts. However, a private arbitral institution is not a State organ.53

5. Irrelevance of the purpose of the breach

15.

The distinction between commercial acts or acta jure gestionis, on the one hand, and acta jure imperii, on the other hand, is not relevant for purposes of Article 4.54 The only requirement is that the act is performed by a State organ. All acts or omissions performed by a State organ, or several State organs at the same time,55 are attributable to the State. Whether such conduct constitutes a breach of an international obligation, or a breach of contract is a separate and distinct question.

B. Article 5: Persons or entities exercising governmental authority

1. Entities covered

16.

Article 5 concerns entities that are not State organs under Article 4, but are entities or State instrumentalities that are “empowered by the law of the State to exercise elements of governmental authority.”56

17.

The term “entity” under Article 5 covers a wide range of bodies or instrumentalities,57 that may include public corporations, semi-public entities, public agencies, or certain private companies, among others.58

18.

Tribunals have often assessed attribution of conduct of State enterprises59 or State agencies.60

2. Conditions for attribution

19.

Attribution under Article 5 requires two cumulative conditions: (1) an entity must be empowered with governmental authority and (2) there must be an act performed through the exercise of governmental authority.61 Seeing that no strict definition exists for “governmental authority”, arbitral tribunals adopted a flexible approach.62

20.

Tribunals often look at whether internal law delegates public authority to a specific entity or person,63 to some arbitral tribunals, although express delegation is not required.64

21.

Under Article 5, the distinction between acta jure gestionis and acta jure imperii is relevant to determine whether an entity or a person exercises governmental authority.65 Private or commercial activity is excluded from the application of this Article.66

C. Article 8: Conduct directed or controlled by a State

22.

Even though conduct of private persons or entities is generally not attributable to the State,67 a State may, through specific directions or by exercising control over a group, “in effect assume responsibility for their conduct.”68

23.

Article 8 of the ILC Draft Articles covers two scenarios:69 (i) where the person or entity “is in fact acting on the instructions” of the State;70 or (ii) where it is acting “under the direction or control of the State.”71

24.

Tribunals often analyze control under the “effective control” test,72 although others have applied a more flexible test.73 The degree of control has been found to be relevant.74

D. Article 11: Conduct acknowledged and adopted by a State as its own 

25.

Unlike the previous ILC Articles, under Article 11 attribution does not arise at the time of the alleged wrongful act, but only subsequently if acknowledged and adopted by the State.75 It concerns mainly acts and omissions committed by private persons and entities.76

26.

The commentary of the ILC Draft Articles suggests that the State must adopt the conduct “as its own,” and therefore mere support or endorsement is not enough.77 Acknowledgement and adoption of the conduct can occur through State organs, but also through its instrumentalities.78

27.

Even if a State acknowledges and adopts a conduct as its own, it must still be found to be wrongful in accordance with the State’s international obligations.79

E. Other forms of attribution 

28.

The ILC Articles also regulate other forms of attribution that have appeared less frequently in practice and are referred to as “special” cases by the ILC Commentary.

1. State organs placed at the disposal of a State by another State

29.

Article 6 “deals with the limited and precise situation in which an organ of a State is effectively put at the disposal of another State so that the organ may temporarily act for its benefit and under its authority.”80 If the organ on State acts exclusively on behalf of another State, the act will be attributed to that latter State.81

2. Excess of authority or contravention of instructions 

30.

Article 7 deals with excess of authority or contravention of instructions,82 and, as explained by arbitral tribunals, provides that even in those circumstances, the conduct of a State organ or a person or entity that is empowered to exercise governmental authority will be attributed to the State, as long as it acts in that capacity.83

3. Conduct carried out in the absence or default of the official authorities

31.

Article 9 provides that the conduct of a person exercising elements of governmental authority in the absence or default of the official authorities may also be considered an act of a State under international law.84 As the commentary explains, it is an exceptional case which will rarely occur, in circumstances such as a revolution, armed conflict or foreign occupation.85

4. Conduct of an insurrectional or other movement 

32.

Lastly, Article 10 deals with conduct of an insurrectional or other movement. Arbitral tribunals applied it in circumstances where such movement succeeds in establishing a new State.86

IV. Rules of attribution under investment treaties

33.

When the applicable investment treaty specifies rules of attribution, arbitral tribunals will base their decision on these rules87 and complete their analysis by referring to the ILC Draft Articles for the questions not covered by those rules.88 However, specific rules of attribution should not be confused with ones that only create a positive obligation towards the host State, such as supervising the conduct of its entities.89

34.

Attributing State organs’ conduct to the host State was also considered as stemming from an implicit primary obligation in the investment treaty, when the contracting States committed to “encouraging as well as protecting the investments of one in the territory of the other.”90 

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