When a State-Owned Company Is Not Separate Enough
A noteworthy decision from the Paris Judicial Court, Enforcement Judge (JEX), 10 September 2026 (RG No. 25/82100) addresses a question that sits at the intersection of sovereign immunity, corporate separateness and arbitral award enforcement: when may a creditor of a State enforce against assets formally belonging to a State-owned company?
The case concerned an arbitral award rendered against Libya and enforcement measures subsequently taken against assets of Libya’s National Oil Corporation (NOC) in France.
NOC argued, among other things, that it had a separate legal personality, had not been named in the award or the French exequatur decision, and could not therefore be treated as the debtor. The JEX disagreed.
Building on the French Cour de cassation’s jurisprudence on émanations de l’État, the court focused on two elements: functional independence and patrimonial independence. Neither, it found, was sufficiently established.
On the functional side, the court emphasised the State’s powers over the composition of NOC’s board, the appointment and remuneration of its members, and the approval of key strategic decisions, including its budget, investment programmes and certain contractual arrangements. On the patrimonial side, the court attached weight to the State’s role in NOC’s capital and financing, its control over the company’s sources of revenue, the transfer of surplus revenues to the State budget and the State’s obligation to cover deficits.
The court held that NOC’s separate legal personality did not prevent enforcement against its assets. Nor was a separate title against NOC required: the award and the French exequatur decision, properly served on Libya, were capable of supporting enforcement against an entity found to be an emanation of the State.
The court held that the assets of an entity which is merely an emanation of the State may constitute part of the gage of the State’s creditors, subject to the statutory conditions governing enforcement against foreign States.
However, the decision does not suggest that State ownership automatically collapses corporate separateness. Quite the opposite: the court undertook a detailed assessment of the entity’s institutional and financial autonomy.
In sovereign enforcement, separate legal personality may be the starting point of the analysis, but it is not necessarily its endpoint. For award creditors, that can materially expand the universe of assets worth investigating. For State-owned entities, it shows why the degree of institutional and patrimonial autonomy may matter long after the arbitration itself has ended.