Chapter 5: SWFs and State Immunity
IN SEARCH OF A DIRECT RELATIONSHIP One issue that observers did not delve into is whether or not, and in case to what extent, SWFs can invoke state immunity, protecting their action or challenging the enforcement of host state measures. At a first glance, the question may be answered negatively. In fact, according to a general principle variably used in international law, when a state invests as a private entity it should be treated as such. However, more insight should be required here. As we saw in previous chapters, SWFs lie in the ‘middle ground’ between SOEs (that do not enjoy immunity) and central banks (whose state immunity is generally recognised). They share some instruments with the former, sometimes share purposes with the latter. Also on structural and governance terms, SWFs can hardly be ascribed entirely to either category (public companies or central banks). And, historically, SWFs are a development of the typical forms of public resource management operated by states. The ‘sovereign’ origin of these funds is an important legacy that still leaves traces. Hence, even for ‘immunity purposes’, we need to understand if SWFs should be treated like private investors (that of course do not enjoy immunity) or like central banks (that enjoy almost unquestioned immunity); or whether it is appropriate to assume that there is a new category, independent from the other two, where SWFs belong due to their peculiar characteristics, and in case, which of the two opposite poles should attract it; or if this new...
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