This paper analyzes the law applicable to State entities in the scope of international commercial arbitration. The concept of incapacity, capacity to arbitrate and the notion of State immunity concerning State entities in international arbitration have been examined accordingly. The participation of State and State entities in international commercial arbitration is one of the most arguable and crucial issues in international legal practice. Controversial issues have been found in such cases where arbitral tribunals tried to expand the arbitral clause not only to State entities but also to the State in international commercial arbitrations. Arbitral tribunals have different views on the issues of legal personality of State entities. Some arbitral tribunals seek to expand the scope of arbitration clauses to cover the States, which are not formally signatories to the commercial contracts; meanwhile, national courts view that the separation of legal personalities between State and its organs or instrumentalities must be respected since they are different legal persons. Obviously, there is an increasing tension between two approaches in practice.

law applicable, state entities, international commercial arbitration, concept of incapacity, capacity to arbitrate, state immunity, arbitrability, ex officio, authority doctrine, estoppel.

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