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.

Chapter 6 examines how tribunals determine the proper respondent in the trade and investment regimes. It focuses on WTO law and the ECT regime because their mixed form provides a relevant context in which to explore responsibility of the EU and its Member States for joint obligations. In light of an extensive case-law analysis, this study extrapolates patterns in the tribunals’ reasoning. It is argued that WTO dispute-settlement employs what this study refers to as a “the positive solution test” to identify the proper respondent. Arbitral tribunals operating under the ECT, on the other hand, allocate responsibility to the subject which is the proximate cause of harm.