International Investment Disputes Research Articles

China and Shanghai Cooperation Organization: Reconsideration and Improvement of Multilateralizing Effect of Most Favored Nation Clause in BIT

Since the Maffezini case, debates upon the application of the Most-Favored-Nation (MFN) clause have never stopped. Research from the perspective of the Shanghai Cooperation Organization (SCO) can test the way for further advancement of this issue. The analysis on the international investment arbitration cases involving the SCO states may shed some light on the crucial point on dispute. At present, the bilateral investment treaties (BIT) between China and other states of the SCO are in an urgent need of renewal in order to meet the interests of deepening investment cooperation. Problems of fragmentation of the interpretation method and of unpredictability of the interpretation conclusion of the MFN clauses manifested in international investment disputes involving SCO states will provide concrete preventative suggestions on the updating of the wording of MFN clauses. Under SCO framework, the multilateral effect of the MFN clause can play a model role for other regional integration organizations to build an integrated and multilateral investment treatment system in the fragmented and bilateralism-based framework of international investment law, and in fact promote investment facilitation for regional organizations.

Litigation Jurisdiction of China International Commercial Court under the "Belt and Road" Initiative

The China International Commercial Court (CICC) plays a crucial role in the context of the "Belt and Road" initiative, providing a platform for the fair and efficient resolution of international commercial disputes. Despite its strategic importance, the CICC faces significant jurisdictional challenges. These include blurred boundaries of case acceptance, insufficient innovation in distinguishing international cases, overly broad applicability due to exclusionary practices, and inadequate consideration of international investment disputes. This article thoroughly examines these issues and offers comprehensive solutions to enhance the CICC's functionality. Key recommendations include clarifying the CICC's positioning as a one-stop platform integrating mediation, arbitration, and litigation; refining the boundaries of case acceptance through detailed legal provisions and judicial interpretations; strengthening the standards for determining international cases to better reflect the complexity of international commercial activities; and enhancing the mechanisms for resolving international investment disputes. Addressing these challenges will improve the CICC's operational efficiency, bolster its international credibility, and better support the "Belt and Road" initiative.

A Roadmap to Establish a Flexible Multilateral Instrument on International Investment Dispute Settlement: Learning From the MLI

A Roadmap to Establish a Flexible Multilateral Instrument on International Investment Dispute Settlement: Learning From the MLI

New Cross-Border Standards of Conduct for Arbitrators in International Arbitration

The paper deals with topical issues of improving the regulation at the international level of the rules concerning the conduct of arbitrators in international commercial and investment arbitration. Two new documents are highlighted: the Code of Conduct for Arbitrators in the Settlement of International Investment Disputes, prepared by the working group of the United Nations Commission on International Trade Law (UNCITRAL), and the 2024 edition of the guidelines of the International Bar Association (IBA) regarding conflicts of interest in international arbitration. The Code of Conduct for Arbitrators is applied in the framework of International Investment Dispute (IID) proceedings, but may be applied in the framework of proceedings in any other dispute by agreement of the parties to the dispute. Along with the requirements for the independence and impartiality of arbitrators, the Code introduces restrictions on the simultaneous performance of several functions, as well as establishes obligations to exercise diligence, conduct proceedings in good faith and competently, not delegate their decision-making responsibilities, maintain the confidentiality of proceedings; the requirement for the reasonableness of arbitrators’ fees, as well as provisions governing the role of tribunal assistants. The IBA Guidelines on Conflicts of Interest in International Arbitration are the most popular source of «soft law» among the sets of rules of international origin governing the impartiality and independence of arbitrators. It is often used in arbitration and judicial proceedings in various legal systems when considering issues related to the assumption of the functions of arbitrators, their appointments and challenges. The novelties introduced into this Manual, taking into account the 10-year practice of applying the previous edition, expand the list of circumstances to be disclosed, clarify a number of statements.

The 2022 ICSID Arbitration Rules: Modernizing International Investment Dispute Resolution

Abstract The new Arbitration Rules of the International Center for Settlement of Investment Disputes (ICSID), which came into force on July 1, 2022, replace the previous version in force since 2006. These rules seek to make the ICSID arbitration process more efficient and responsive, while maintaining the high standards that have made ICSID a respected forum for resolving investment disputes. The new rules reflect changes in international investment law and policy over the past decade, and also aim to address shortcomings of the previous system, such as lack of transparency and efficiency. New provisions have been introduced to simplify and speed up arbitration procedures, provide greater transparency, increase the legitimacy of arbitration processes and expand access to them. The new rules reflect the expectations of ICSID and its members for more efficient and transparent resolution of investment disputes and should facilitate the further growth of international investment and trade, as well as the resolution of disputes arising in connection with these processes.

Protection Bilateral Investment Treaty as Treaty of International Discussion Resolution Supporting Indonesia Reform

The implementation of the Bilateral Investment Treaty in Indonesia with foreign investors must still pay attention to the existence of Indonesian state sovereignty. State sovereignty must be maintained by the host state to maintain the existence of the country in the international world. BIT has the main function as an international legal instrument that is useful in foreign investment activities with reciprocal relations in obtaining benefits between the guarantee of legal protection of the home state of foreign investors and the economic growth of the host state. BIT signatories are theoretically balanced and reciprocal, but they are often detrimental to host states, most of which come from developing countries. This research aims to find out the extent of Indonesia's implementation of BIT and still protect the existence of state sovereignty. The method used in this research uses normative and comparative juridical and this research has an analytical descriptive nature. Normative legal research is obtained by studying the Churchill Mining case approach and collecting data from articles, web, books, and websites and then comparing the implementation of BITs in Indonesia as a developing country and the United States as a developed country and comparing the implementation of BITs in fellow developing countries between Indonesia and Brazil. The first victory achieved by Indonesia against Churchill Mining in the resolution of the international investment dispute at the ICSID forum proved the BIT reform in Indonesia that continues to develop. This study showed that: first, The Bilateral Investment Agreement provides legal protection guarantees for foreign investors and settlement of settlement disputes through ICSID, an international investment settlement arbitration agency between the two countries that signed the BIT so that the BIT is a protection guarantee for investors. Second, Indonesia's victory against Churchill Mining proves that it has reformed the BIT that applies to Indonesia in a balanced manner to provide legal protection (host state) and the existence of state sovereignty (home state).

Article: Sorting the Building Blocks of Investor-State Dispute Settlement Reform: Recent Developments from the UNCITRAL Working Group III

The United Nations Commission on International Trade Law (UNCITRAL) Working Group III (WGIII), as the main forum the reform of investor-state dispute settlement (ISDS), continues to deliberate an ambitious agenda of reform areas of high priority. Recently, the WG marked an important milestone with the adoption of the first reform instruments on the conduct of adjudicators and investment mediation. Nevertheless, the most challenging ‘building blocks’ of reform remain to be addressed, including the systemic reform proposal for a standing mechanism, which would transform the landscape of ISDS as we know it. This chapter first captures the progress of the WGIII as it stands today, focusing in particular on the first reform instruments – the Codes of Conduct for Arbitrators and Judges in International Investment Dispute Resolution, the UNCITRAL Notes on Mediation, and UNCITRAL Guidelines for Mediation in Investment Disputes. Then, it outlines the issues that remain on the agenda of the WGIII, in particular the standing investment court, appellate mechanism, the Advisory Centre and other procedural and cross-cutting issues. The chapter concludes with reflections on the overall dynamics of the WGIII and the lessons learned thus far that could contribute to the effectiveness of the deliberations ahead.

International Investment Disputes Resolution in the EAEU when Changing the Investor’s Personal Law

The paper identifies regulatory gaps in the Treaty on the Eurasian Economic Union in relation to the status of an investor when changing their personal law after making investments. There are also gaps in the procedural mechanism for organizing and conducting conciliation procedures in accordance with the above agreement on the initiative of an individual — the applicant whose legal interests were violated. Based on the results of a study carried out from the perspective of comparative law and a formal-dogmatic approach, the author proposes solutions to improve the international legal regulation of investment activities within the EAEU on the identified issues in order to create a favorable investment climate for attracting foreign investment to the Russian Federation from partner countries in the EAEU. The theoretical significance of the work lies in the formulation of the author’s definition of the concept of international legal innovations and the designation of their characteristics based on a doctrinal understanding of examples of UNCITRAL rule-making practice.

Institutionalizing Investment Dispute Prevention: The U.S. Experience

The steady rise of international investment arbitration in recent years suggests that many states still struggle to prevent investor grievances from becoming international investment disputes and ultimately arbitration claims. The United States is not exempt from such difficulties, but it has some institutional advantages contributing to its successful approach to mitigating and managing international investment disputes. Key advantages include its practice of: (1) “internationalizing” domestic law in U.S. international investment agreements (IIAs); (2) encouraging foreign investors to pursue domestic remedies in U.S. courts; and (3) domesticating the international investment regime within the U.S. government. The U.S. experience offers some valuable lessons for the ongoing reform of the international investment regime.

Investor-State Dispute Prevention Institutions in Latin America – The Case of Peru

For Peru, the introduction of dispute prevention mechanisms was a consequence of the country's increased openness to foreign investment. Following a severe economic crisis, the government launched several pro-investment reforms in the 1990s. These included signing bilateral investment treaties and free trade agreements with investment protection provisions, as well as investment contracts with foreign investors. The resulting flow of foreign direct investment (FDI) into the country, in turn, increased the likelihood of the state facing investor-state dispute settlement (ISDS) cases. As Peru began to face investment claims in the early 2000s, the Coordination and Response System for International Investment Disputes, also known as “SICRECI” for its acronym in Spanish, was established to manage the practical challenges of coordinating the state's defense. In practice, however, SICRECI's mandate has expanded progressively beyond coordinating ISDS defense, as the institution has undertaken several actions to prevent disputes and otherwise adapted to the specifics of Peru's pro-investment policy. SICRECI became one of the first models of dispute prevention mechanisms, with international organizations showcasing it as an example of how states, in particular developing countries, could address and mitigate a growing number of concerns over the impact of investment arbitration.1

Contemporary Dilemmas of International Investment Law: From the Perspective of Settlement of International Investment Disputes

The current state of international investment law consists of thousands of International Investment Agreements (IIAs) and Investor-State Dispute Settlement (ISDS) mechanisms that create safeguards in international investment law and provide foreign investors with the means to mitigate the political risks they face in host countries. However, the number of effective international investment treaties is generally decreasing, and new investment treaties also exclude investor-state dispute settlement mechanisms. Based on past litigation, it is easy to see that the majority of investors who have successfully initiated litigation against host States have come from developed countries. Litigation against the host State by investors from the global South has been relatively few and far between, and has mostly been dismissed, and even when it has been successfully filed, it has not been successful. As a result, the dispute settlement mechanism is not inherently fair. It can be said that this mechanism is a symbol of protectionism in the post-colonial era, which is no longer suitable for the current time. This paper addresses these issues by providing a comprehensive analysis of the current state of development of international investment treaties and the current state of investor-state dispute settlement mechanisms.

Improvements to the system of host country regulatory authority in the Investor-State Dispute Settlement (ISDS) Mechanism

As the ISDS mechanism has been widely applied, its shortcomings have been gradually magnified, and the host country's right to regulate has been constantly challenged by foreign investors in international investment dispute settlement, and the sovereignty and public interests of the host country have been undermined as a result. This paper examines the existing problems of the host country's right to regulate, and analyses in depth the motivation for strengthening the host country's right to regulate in the context of the reform of the ISDS mechanism, taking into account past cases and practical experience. At the same time, by comparing and analysing the relevant theories of domestic and foreign scholars on the ISDS mechanism, the paper highlights the necessity of strengthening the host country's right to regulate in order to maintain a balance between the interests of both the host country and the investors, and proposes a feasible and practicable reform plan in this regard.

BIT·FTA상 외국인투자심사 실행에 관한 연구

Countries with foreign investment screening mechanism have developed practices to avoid international investment disputes. These practices include using security exceptions, exceptions to dispute settlement provisions, and schedules to Annex regarding non-conforming measures in investment agreements. These practices do not specify specific national security requirements and are subject to full self-judgment. Countries with a long history of foreign investment screening, such as the United States, Canada, and Australia, actively use these practices to exclude foreign investment screening from international agreement obligations. These countries interpret the national security exception jurisprudence as applying to foreign investment screening, meaning that foreign investment screening is entirely self-judged.
 However, South Korea does not have a consistent approach to foreign investment screening in its Bilateral Investment Treaties (BITs) and Free Trade Agreements (FTAs). The security exception clause in these agreements is different in each agreement, and the contents of the reservations are not uniform. However, it can be interpreted that Korea has decided to treat foreign investment screening as an exception to international law, since it joined the Regional Comprehensive Economic Partnership (RCEP), which stipulates that the screening regime shall not be subject to the dispute settlement provisions.
 Foreign investment screening is likely to become more important as a policy tool in the era of expanding national security. The concept of national security has evolved from being applied only in exceptional emergencies such as war to encompassing more permanent situations such as economic security, high-tech protection, supply chain crisis response, and climate change. State measures to protect national security have also become more permanent. Given these circumstances, it is important to reconsider whether it is appropriate to treat foreign investment screening as an exception to international law. Allowing foreign investment screening as an exception to international law could lead to a crisis in the international legal system due to potential abuse of this exception. However, from the government's perspective, securing policy space for foreign investment screening can be advantageous in effectively addressing the growing threat to national security. Therefore, it is crucial to contemplate the stance and standards that should be established for the foreign investment screening practice in Korea moving forward.

The Anti-Reformist Stance in Investment Law

Abstract This article articulates an ‘anti-reformist’ stance toward the reform of international investment law and dispute settlement. The mainstream debates over the future of investment law are generally ‘reformist,’ in the sense that they seek to maintain the system of special legal rights afforded to a discrete class of persons defined as ‘investors’. This system of special rights amplifies investors’ power vis-à-vis other constituencies and is premised on flimsy assumptions about the investor’s vulnerability that are not borne out either in theory or in practice. Drawing on recent work in other fields, this article sketches an anti-reformist approach that asserts these fundamental challenges, even as it remains engaged in contemporary reform debates. It also discusses the near-term implications of this approach for procedural and substantive reform of investment treaties, as well as the long-range goals of an anti-reformist stance.

Study on the Expansion of ICSID Arbitration Jurisdiction

With the development of the global economy, international investment gradually occupies an important position in the market, and at the same time it also brings some legal disputes, ICSID is the direct main body to resolve international investment disputes, while its arbitration jurisdiction is the prerequisite and the primary issue for the arbitral tribunal to resolve international investment disputes. At present, the expansion of ICSID's arbitration jurisdiction is an issue that needs to be addressed by the international community. This paper is divided into four parts, the first part of the overview starts from the main body ICSID, the second part analyzes the expansion path of ICSID's arbitration jurisdiction and its reasons, the third part puts forward the reform path of ICSID's arbitration jurisdiction, and the fourth part puts forward China's countermeasures.

A Study on the Legitimacy of Public Health Measures in Response to COVID-19 under International Investment Disputes

A Study on the Legitimacy of Public Health Measures in Response to COVID-19 under International Investment Disputes

State Immunity in International Investment Disputes: Role of State Immunity in Resolving Investment Disputes and Adjudication Implications

State Immunity in International Investment Disputes: Role of State Immunity in Resolving Investment Disputes and Adjudication Implications

Implementation of Human Rights in International Investment Legal Relations: Selected Issues of Dispute Resolution Practice

The paper covers certain provisions of a comprehensive study of the implementation of human rights in international investment legal relations. The author attempted to reveal the relevance of the ongoing research and assess the significance of the interaction between international investment law and international human rights law in modern realities. The paper reveals the main options for the interaction of international investment law and international human rights law, both in material and procedural aspects. The author focuses on the practice of resolving international investment disputes in relation to the actions of the host state with reference to the protection of human rights as one of the options for manifesting the relationship between the two branches of public international law. The author reveals the existing patterns in the practice of resolving investment disputes. As a key conclusion, the author puts forward the idea that it is possible to generalize the results of a harmonious interpretation (construction) and the formation of an appropriate unified legal framework for the norms of international public law with a view to its subsequent harmonious application.

Recent Cases in International Investment Law Involving Local Government on Investment Disputes

An understanding of the importance of regulating investment treaties and implementing measures in accordance with existing rules has been generally understood by States in foreign direct investment. However, the local government where the location of foreign investment activities is carried out has not received sufficient attention. As a result, various cases of international investment disputes have arisen caused by actions taken by local governments. This study discusses how the tribunal views and interprets actions taken by local governments in relation to violations of foreign investor rights. In the span of time over the past eight years, no less than six hundred cases of foreign investment disputes have been investigated. Of these, three available and final cases became the subject of discussion in research and became examples to link them with the legal skills of local government officials in mitigating the occurrence of foreign investment case disputes. The results of this study show that in terms of understanding the rules of international investment law, the government in the country can mitigate or handle the case better with foreign investment disputes.

Standing in international investment and trade disputes

International investment agreements employ dispute settlement procedures that differ markedly from their counterparts in trade agreements. A prominent and controversial difference arises with respect to the issue of “standing”: Who has the right to complain to adjudicators about a violation of the agreement? While trade agreements limit standing to the member governments (state-to-state dispute settlement), investment agreements routinely extend standing to private investors as well (investor-state dispute settlement). We develop parallel models of trade and investment agreements and employ them to study this difference. We find that the difference in standing between trade and investment agreements can be understood as deriving from the fundamentally different problems that these agreements are designed to solve. Our analysis also identifies some important qualifications to the case for including investor-state dispute settlement provisions in investment agreements, thereby offering a potential explanation for the strong political controversy associated with these provisions.