State-Owned Enterprises

9.

In the case of ICSID, for instance, a State could never qualify as a “national of another Contracting State” under Article 25(1) or (2)(b) of the ICSID Convention, and rationae personae jurisdiction should never be afforded to a claimant State.12 To assert the (State or non-State) capacity in which a State-owned enterprise is acting, Broches puts forward the following argument: “[I]n today’s world the classical distinction between private and public investment, based on the source of the capital, is no longer meaningful, if not outdated. There are many companies which combine capital from private and governmental sources and corporations all of whose shares are owned by the government, but who are practically undistinguishable from the completely privately owned enterprise both in their legal characteristics and in their activities. It would seem, therefore, that for purposes of the Convention a mixed economy company or government-owned corporation should not be disqualified as a ‘national of another Contracting State’ unless it is acting as an agent for the government or is discharging an essentially governmental function.”13