Attribution of Lawful Conduct in Investment Treaty Arbitration - The 'It' Problem Solved?

Abstract

This essay offers an answer to the ongoing debate of whether lawful conduct of a State, such as the conclusion of a contract, may be attributed to that State pursuant to the rules of attribution codified in the ILC Articles on State Responsibility for Internationally Wrongful Acts. The author's view is that the answer to the question must be in the affirmative. It finds support in a three-pronged argument. The first prong of the argument recalls that the attribution of conduct is the first step that needs to be completed in view of asserting State responsibility. The second prong of the argument is that the ILC Articles, which contain a codification of internationally accepted customary rules of attribution, operate independently, as they are, first and foremost, an expression of customary international law. From this flows the third prong of the argument, which is that the rules of attribution do not exclusively apply to internationally wrongful conduct, but also to internationally lawful conduct. Having considered all aspects, the author concludes that the rules of attribution may apply also to contractual undertakings of States, provided that the conditions for attribution are fulfilled. Such conclusion is developed against the background of the contentious issues pertaining to the application and effect of umbrella clauses in investment treaty arbitration. In particular, it focuses on the question as to whether obligations contracted into by an emanation of a State are attributable to that very State for the purpose of finding a breach of an umbrella clause contained in the relevant bilateral investment treaty (the 'it' problem).