Attributing investment contracts: the general principles approach

Abstract This article analyses a legal issue at the heart of many investment arbitrations, the attribution of investment contracts. The question of whether to attribute investment contracts to the host State arises whenever investors contract with entities related to but formally separate from host States. How it is resolved has important implications. As the influence of State-owned entities has grown, so has the importance of such attribution. If the contract cannot be attributed to the host State, an investment tribunal lacks jurisdiction based on the contract, and a breach of the umbrella clause is not possible. Whether a contract is attributable depends on the applicable legal framework. So far, investment tribunals have applied the rules on attribution in the Articles on State Responsibility (ARSIWA) and the host State’s domestic law. This article puts forward a third approach: applying general principles of law. The article substantiates three relevant general principles, namely (i) apparent authority, (ii) implied consent, and (iii) piercing the veil. This novel approach enables tribunals to consider the factors relevant to determining parties to the contract. In contrast with over-attribution based on ARSIWA and under-attribution based on domestic law, this article’s framework leads to an optimal level of attribution.