Abstract
China is one of the most active states in concluding bilateral investment treaties (BITs) globally. Its BITs can be categorized into three generations based on the homogeneity of the investor-state dispute settlement (ISDS) provisions within each generation. The China–EU Comprehensive Agreement on Investment and the China–US BIT under negotiation are expected to inaugurate a fourth generation, although China’s stance on ISDS in both treaties remains indeterminate. This article elaborates on the distinctive characteristics of ISDS provisions by mapping three generations of Chinese BITs, presenting the challenges that these ISDS provisions have brought to light in investor-state adjudication as well as in the context of the Belt and Road Initiative, and expounding on China’s policy options in ISDS reform. The on-going intense debate on ISDS reform presents China with an opportunity to shift from its traditional role of a rule-taker to a rule-maker in redesigning the ISDS mechanism. However, China’s current policy and practice do not demonstrate an ambition for such a transformation. Looking forward, it may well be in China’s long-term interest to endorse a Multilateral Investment Court as vigorously advocated by the EU.
Highlights
The conclusion of bilateral investment treaties (BITs) on the global scale has been one of the most dynamic fields of international investment law during the past few decades
This article elaborates on the distinctive characteristics of investor-state dispute settlement (ISDS) provisions by mapping three generations of Chinese BITs, presenting the challenges that these ISDS provisions have brought to light in investor-state adjudication as well as in the context of the Belt and Road Initiative, and expounding on China’s policy options in ISDS reform
Article 9.2 of this BIT stipulates that ‘if the dispute cannot be settled through negotiations within six months, either Party to the dispute shall be entitled to submit the dispute to an international arbitral tribunal provided that the Contracting Party involved in the dispute may [emphasis added] require the investor to initiate administrative review procedures in accordance with its laws and regulations.’53 The same stipulation is observed in another 17 second generation Chinese BITs
Summary
The conclusion of bilateral investment treaties (BITs) on the global scale has been one of the most dynamic fields of international investment law during the past few decades. Article 9.2 of this BIT stipulates that ‘if the dispute cannot be settled through negotiations within six months, either Party to the dispute shall be entitled to submit the dispute to an international arbitral tribunal provided that the Contracting Party involved in the dispute may [emphasis added] require the investor to initiate administrative review procedures in accordance with its laws and regulations.’ The same stipulation is observed in another 17 second generation Chinese BITs (see Appendix Table 3). E.g., Art. 9.6 of the China-Barbados BIT (1998) stipulates that ‘the arbitral tribunal shall decide the issues in dispute in accordance with the provisions of this Agreement, the law of the Contracting Party accepting the investment and applicable rules of international law’. Chinese BITs recalibrate the liberal approach of ISDS in the second generation in an attempt to attain a more balanced ISDS scheme
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