This chapter considers the various functions of States in international commercial and investment arbitration, which are essentially twofold.First, States are legislators and the creators of the system, and they also assist its development through their conduct which informs the interpretation of relevant treaties, such as BITs.Secondly, States are also parties to such proceedings, usually as the respondent to a claim, but also possibly also as the claimant, as a counter-claimant, and as a non-party intervener.This chapter then considers issues faced by States when acting as the respondent, and discusses how States might best prepare for and handle such disputes, and it also identifies various procedural issues which are likely to arise in such arbitral proceedings.It concludes that States have a complex combination of roles in international arbitration, and that the challenges in responding to claims can be managed if States are willing to learn from the decades of experience which States now have of participating in international arbitration proceedings.

This chapter focuses on the guiding case system, which is distinctive and cannot be simply explained by current case law theories. More specifically, it first explores the distinctiveness of the guiding case system in the specific context of China, as opposed to other types of case law in liberal democracies, then goes on to explain why the Supreme People’s Court (SPC) has been able to expand its judicial lawmaking authority in the sense of being able to interpret the law through guiding cases. Furthermore, it illustrates that the Main Points of Adjudication (caipan yaodian), as a part of a guiding case, has essentially become a form of statutory interpretation that enables the SPC to independently perform a legislative function to a certain extent without routine surveillance by the Standing Committee of the National People’s Congress (NPCSC). This stands in contrast to the previous practice, where the SPC performed the legislative function merely through having it delegated by the NPCSC. It is further suggested that, under China’s authoritarian regime, the effectiveness of the SPC’s lawmaking function through the guiding case system depends largely on the extent to which the courts could be independent in the context of China.