Abstract
As a typical area of transnational law, international investment law is piercing the veil of sovereignty and blurring, if not dissolving, the boundaries between municipal law system (NL) and international investment law system (IIL). The interaction between NL and IIL is further complicated when considerable discretion of arbitral tribunal over reviewing governmental actions encounters inconclusive but multifaceted relevance of law of host state in arbitral proceedings. The legal status, the impact and the potential function of national law at both specific arbitral proceeding level and institutional level in international investment law system are under-theorized, which partly present itself as and partly generate the seemingly divergent arbitral practices of tribunals. Therefore, it is of great practical and theoretical significance to figure out the (potential) role of national law in international investment law system from a dynamic institutional perspective. This paper first appraises the role of NL in specific investment treaty arbitration from three perspectives, namely, NL as fact, NL as evidence and NL as governing law. The inquiry then goes beyond the sphere of individual arbitration to the systematic dynamics of IIL: NL as a template for negotiation and renegotiations of investment agreements, NL as state practices leading to the development of customary law and NL as recognition and enforcement of IIL.The paper further explores the institutional structure of governance system over transnational investment activities and argues that IIL and Investor-State Dispute Resolution (ISDS) mechanisms are smart governance mechanisms for purely or mainly economic disputes concerning investment. However, IIL is not of institutional advantages over NL when investment related disputes are of great social influence and political impacts. The normative delimitation of regulatory boundary of NL vis-a-vis IIL over transnational investment related activities lies in the equilibrium between competing parameters, namely marketable interest concerns and socialized (and political, to the most extent thereof) interest concerns. The more marketable the targeted investment related matter is, the more involved IIL should be. The paper further argues that an interdependent, hybrid and poli-contextual governance network is emerging in transnational investment regulation. Based on comparative advantages of both NL and IIL system, the governance network is and shall be distinct from both totally free competitive approach and total hierarchy approach, and of the institutional capacity to exercise the comparative advantages of both systems without functionally distorting the other while capable of coping cope with the constantly changeable and multifaceted regulatory context in transnational investment sphere.
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