China has grown into the largest global destination for foreign investment and the second largest outbound investment State. These developments underscore China’s centrality to the expansion and stability of the international economic order, not limited to the economic impact of its inbound and outbound investors.
An ensuing question is the extent to which China protects its national interests in resolving investor-State claims through the process known as investor-State dispute settlement (ISDS). This paper explores, firstly, China’s past experiences with ISDS, secondly, its methods of addressing these issues, and thirdly, the regulatory directions it might adopt in the future. In doing so, the paper comments on China’s historical and current ISDS experience and practice. It evaluates prospective regulatory measures by which it can avoid and resolve ISDS claims.
- China investment
- Foreign direct investment
- Investment treaties
- Investor-State disputes
- Investor-State arbitration
- State courts
- Waiting period
- Investment reform
- China’s choices
- Investment liberalization
- Planned economy
This is a preview of subscription content, access via your institution.
See, e.g., Rooney KM (2007) ICSID and BIT arbitrations and China. J Int Arbitration 24:704 (arguing that, even after China’s accession to the Washington Convention became effective, it was some years before China provided for ICSID arbitration in early BITs). On the ICSID, see generally Parra AR (2017) The history of ICSID, 2nd edn; Kinnear M (2014) ICSID and international investment treaty arbitration: progress and prospects. In: Shan W, Su J (eds) China and international investment law: twenty years of ICSID membership; Trakman LE (2012) The ICSID under siege. Cornell Int Law J 45:603.
See, e.g., Schreuer C (2001) The ICSID convention: a commentary 10–69; Willems JY (2011) The settlement of investor state disputes and China new developments on ICSID jurisdiction. S C J Int Law Bus 8:1; Heymann MCE (2008) International law and the settlement of investment disputes relating to China. J Int Econ Law 11:507; and Database of ICSID Member States. International Centre for Settlement of Investment Disputes. https://icsid.worldbank.org/en/Pages/about/Database-of-Member-States.aspx. Last visited 21 May 2019.
See Kragelund P (2009) Knocking on a wide open door: Chinese investments in Africa. Rev Afr Pol Econ 36:479; Bennell P (1997) Foreign direct investment in Africa: rhetoric and reality. SAIS Rev 17:127; Alden C, Davies M (2006) A profile of the operations of Chinese multinationals in Africa. S Afr J Int Aff 13:83; and Davies M (2008) China’s developmental model comes to Africa. Rev Afr Pol Econ 35:134. Huliaras A, Magliveras K. Truths, lies and misperceptions: United States and European Union reactions to the growing Chinese presence in Africa. In: Second European conference on African studies address at the University of Leiden Second European Conference on African Studies; UNCTAD (2007) Asian Foreign Direct Investment in Africa.
UNCTAD (June 6, 2018) World Investment Report 2018. https://unctad.org/en/pages/PublicationWebflyer.aspx?publicationid=2130
See, e.g., Frequently asked questions – UNCTRAL and private disputes, UNCITRAL. http://www.uncitral.org/uncitral/en/uncitral_texts/arbitration_faq.html#dispute. Last visited 21 May 2019 (for explanation that while the ICSID administers ISA, the UNCITRAL is not an administering authority. The UNCITRAL website states: “UNCITRAL does not administer arbitration or conciliation proceedings nor does it provide services … in connection with dispute settlement proceedings.”). Other institutions, most notably the Permanent Court of Arbitration (“PCA”), administer investor-state disputes under the UNCITRAL Rules. See generally Daly B, Goriatcheva E, Meighen H (2017) A guide to the PCA arbitration rules.
An example of China’s endorsement of ISA under the ICSID and UNCITRAL is contained in Article 5 and 9 of the Germany-China BIT which came into force on December 11 2005. Article 10(2) of that BIT is an umbrella clause, providing that each State party shall respect its treaty obligations relating to investors from the other State party. On the provisions in China’s Model BIT, see infra Parts IV and V.
Ekran Berhad v. People’s Republic of China (Ekran Berhad), ICSID Case No. ARB/11/15 and Ansung Housing Co., Ltd. v. People’s Republic of China (Ansung Housing), ICSID Case No. ARB/14/25
Hela Schwarz GmbH v. People’s Republic of China (Hela Schwarz), ICSID Case No. ARB/17/19
See Bath V (2011) The quandary for Chinese regulators: controlling the flow of investment into and out of China. In: Bath V, Nottage L (eds) Foreign investment and dispute resolution law and practice in Asia. p 67.
See Statistics of FDI in China in January – May 2018. Ministry of Commerce People’s Republic of China (Mar 6 2019). http://english.mofcom.gov.cn/article/statistic/foreigninvestment/201807/20180702767267.shtml
See infra Part III and note 111.
See generally ICSID, The ICSID Caseload – Statistics (Issue 2018-1), (2018), https://icsid.worldbank.org/en/Documents/resources/ICSID%20Web%20Stats%202018-1(English).pdf (discussing the ICSID caseload, noting that the ICSID caseload has grown from a single case in 1972 to approximately 10 cases in 1990, to 53 new cases filed in 2017).
See Bath V (Mar 28, 2010) The Chinese legal system and the Stern Hu case. East Asia Forum. https://www.eastasiaforum.org/2010/03/28/the-chinese-legal-system-and-the-stern-hu-case/ (discussing the Stern Hu case where an Australian businessman of Chinese origins was found guilty in 2010 by a Chinese court of stealing commercial secrets and accepting bribes).
See Rubinacci L (Mar 7 2012) EU-China investment relationship, update on State of play. DC Trade Civil Society Dialogue. http://trade.ec.europa.eu/doclib/docs/2012/march/tradoc_149185.pdf. See also European Commission, Public Consultation on the future relationship between the EU and China (July 6, 2011) http://trade.ec.europa.eu/consultations/?consul_id=153
Rubinacci, supra note 14 at 13
Trakman L (2014) China and foreign direct investment: does distance lend enchantment to the view? Chin J Comp Law 1:1. https://doi.org/10.1093/cjcl/cxt015
See Bath, supra note 9 (discussing China’s shifting position in regard to investment arbitration).
See Shan W, Gallagher N, Zhang S (2012) National treatment for foreign investment in China: a changing landscape. ICSID Rev 27:120; Qin JY (2003) WTO-Plus obligations and their implications for the World Trade Organization legal system: an appraisal of the China accession protocol. J World Trade 37:483, 490; YY Kueh (ed) (1997) The political economy of Sino-American relations: a greater China perspective; Kinnear M (2009) The continuing development of the fair and equitable treatment standard. In: Bjorklund AK, Laird IA & Ripinsky S (eds) Investment treaty law: current issues III. Remedies in international investment.
See Sheppard A (2016) The approach of investment treaty tribunals to evidentiary privileges. ICSID Rev 31:670, 682.
See further infra section “Challenges to ISA?”
See, e.g., MTD Equity Sdn Bhd and MTD Chile SA v. Republic of Chile, ICSID Case No. ARB/01/07, Award (May 25, 2004) (for an expansive interpretation of an MFN clause); Emilio Agustin Maffezini v. Kingdom of Spain, ICSID Case No. ARB/97/7 (Jan. 25 2000) (Decision on Jurisdiction) at -; Siemens v. Republic of Arg., ICSID Case No. ARB/02/8, Aug. 3, 2004) (on the limits placed on the scope of an MFN clause in a BIT). See generally, Maupin JA (2011) MFN-based jurisdiction in investor-state arbitration: is there any hope for a consistent approach? J Int Econ Law 14:157 (on the controversy associated with the meaning and scope of MFN clauses); Banifatemi Y (2009) The emerging jurisprudence on the most favored nation treatment in investment arbitration. In: British Institute of International and Comparative Law (ed) Investment treaty law: current issues III, remedies in international investment law, emerging jurisprudence of international investment law.
See generally, Shan W, Gallagher N (2009) Chinese investment treaties: policies and practice. Oxford (for discussion of the second and third generation BITs).
See Siemens A.G. v. The Argentine Republic, ICSID Case No. ARB/02/8, Decision on Jurisdiction (Aug. 3, 2003). But see Plama Consortium Ltd v. Republic of Bulgaria, ICSID Case No. ARB/03/24 (Decision on Jurisdiction) (Feb. 8, 2005).
China Heilongjiang International Economic & Technical Cooperative Corp., et al v. Mongolia (Heilongjian v. Mongolia), PCA Case (China-Mongolia BIT 1991).
China-Mongolia BIT at rt. 8. See too China’s Model BIT at rt. 4(iv).
Tza Yap Shum v. Republic of Peru, ICSID Case No. ARB/07/6 (Feb. 12, 2015) (Annulment Proceeding) https://www.italaw.com/sites/default/files/case-documents/italaw4371.pdf, at 57 et seq
See Tza Yap Shum v. The Republic of Peru, ICSID Case No. ARB/07/6, (June 19, 2009) (Decision on Jurisdiction and Competence); Tza Yap Shum v. The Republic of Peru ICSID Case No. ARB/07/6, (Jul. 7, 2011) (Award on Merits). See Renta 4 S.V.S.A. v. The Russian Federation, SCC Arb No. 024/2007 (Mar. 20, 2009) (Award on Jurisdiction); Czech Republic v. European Media Ventures SA EWHC 2851, (Dec. 5, 2007). See also Eliasson N (2011) China’s investment treaties: a procedural perspective. In Bath V, Nottage L (eds) Foreign investment and dispute resolution law and practice in Asia.
Tza Yap Shum v. Republic of Peru, ICSID Case No. ARB/07/6 (Annulment Proceeding)
Agreement between the government of the Republic of Peru and the government of the People’s Republic Of China concerning the encouragement and reciprocal protection of investments, concluded in Beijing on June 9, 1994, entered into force Feb. 1, 1995, 1901 U.N.T.S. 257 (Peru-China BIT), at art. 1(2)(a).
Tza Yap Shum, supra note 27, ¶ 31
Id. ¶ 31
Id. ¶ 32
Peru-China BIT, supra note 29, at ch. 10, art. 126
ICSID Convention, Regulations and Rules, at art. 26
Peru-China BIT, supra note 29, at art 3(5). See also Eliasson, supra note 27.
Tza Yap Shum, supra note 27, at ¶ 218
Id. ¶ 88
Tza Yap Shum v. The Republic of Peru, ICSID Case No. ARB/07/6 (Feb. 12, 2007) (Decision on Jurisdiction and Competence); Tza Yap Shum v. The Republic of Peru, ICSID Case No. ARB/07/ (July 7, 2011) (Final Award on the Merits), summary available at http://www.italaw.com/documents/TzaYapShumAwardIACLSummary.pdf
Id. ¶ 144
See Renta 4 S.V.S.A. v. The Russian Federation, SCC Arb No. 024/2007 (Mar. 20, 2009), ¶101 (on the general applicability of an MFN clause); RosInvestCo UK Ltd v. The Russian Federation, SCC.Arb No. 079/2005 (Oct., 2007), at ¶130.
Tza Yap Shum v. Republic of Peru, ICSID Case No. ARB/07/6 (Feb. 12, 2015) (Annulment Proceeding)
Id. ¶ 205
Ping An Life Insurance Company of China, Limited and Ping An Insurance (Group) Company of China, Limited v. Kingdom of Belgium (Ping An v. Belgium), ICSID Case No. ARB/12/29 (Apr. 30, 2015) (Award)
Ren Q (2016) Ping An v. Belgium: temporal jurisdiction of successive BITs. ICSID Rev – For Invest Law J 31:129. https://doi.org/10.1093/icsidreview/siv046
Id. §99 (citing Resp. Mem. Jur., ¶134 on the financial advice it received from Morgan Stanley)
Sebastian. Green Martínez; Case Comment: Ping An Life Insurance Company of China, Limited and Ping An Insurance (Group) Company of China, Limited v. Kingdom of Belgium – A Jurisdictional Black Hole Between Two BITs? TDM 1 (2017), www.transnational-dispute-management.com/article.asp?key=2407
Beijing Urban Construction Group Co. Ltd. v. Republic of Yemen ICSID Case No. ARB/14/30 (May 31, 2017)
Id. See further Pathirana D (Sept 26, 2017) A look into China’s slowly increasing appearance in ISDS cases. Investment Treaty News. https://www.iisd.org/itn/2017/09/26/a-look-into-chinas-slowly-increasing-appearance-in-isds-cases-dilini-pathirana/
ICSID, Case Details – Beijing Urban Construction Group Co. Ltd. V Republic of Yemen (June 7, 2018), https://icsid.worldbank.org/en/Pages/cases/casedetail.aspx?CaseNo=ARB/14/30
See, e.g., Guluzade A (07 May 2019) Explained, the role of China’s state-owned companies. World Economic Forum. https://www.weforum.org/agenda/2019/05/why-chinas-state-owned-companies-still-have-a-key-role-to-play/
See Harpaz MD (2015) China and international tribunals. In: Toohey L, Picker C, Greenacre J (eds) China in the new international economic order. p 43.
ICSID, supra note 12
Agreement between the government of the People’s Republic of China and the government of Malaysia concerning the reciprocal encouragement and protection of investments, Nov. 21, 1988
Ekrhan Berhad v. People’s Republic of China ICSID Case No. ARB/11/15
Id. (proceedings suspended pursuant to the Parties’ agreement on July 22, 2011)
The provision for an ISA tribunal to adhere to “domestic legal procedure” is contained in Article 4(ii) of China’s Model BIT.
See Article 7(4), modeled on Article 4(iv) of China’s Model BIT providing for compensation.
Ansung Housing Co., Ltd. v. People’s Republic of China (Ansung Housing v. China), ICSID Case No. ARB/14/25 (Mar. 9 2017)
Id. ¶ 56
Agreement between the Government of the Republic of Korea and the Government of the People’s Republic of China on the promotion and protection of investments, entered into force on Dec. 1, 2007 (“China-Korea BIT”).
China-Korea BIT, art.9(7) provided, “An investor may not make a claim pursuant to paragraph 3 of this article if more than three years have elapsed from the date on which the investor first acquired, or should have first acquired, the knowledge that the investor had incurred losses or damage.”
ICSID Case No. ARB/17/19 (Jun. 21, 2017).
Hela Schwarz GmbH v. People’s Republic of China ICSID Case No. ARB/17/19 (Mar. 9, 2018) (Procedural Order No. 1); Hela Schwarz GmbH v. People’s Republic of China ICSID Case No. ARB/17/19 (Aug. 10, 2018) (Procedural Order No. 2)
ICSID Case No. ARB/11/15 (proceedings suspended pursuant to the Parties’ agreement on July 22, 2011)
See, e.g., ICSID, Venezuela Submits a Notice under Article 71 of the ICSID Convention, (Jan 26, 2012), http://icsid.worldbank.org/ICSID/FrontServlet?requestType=CasesRH&actionVal=OpenPage&PageType=AnnouncementsFrame&FromPage=Announcements&pageName=Announcement100; See Garcia LB (Jan 24, 2012) We have to get out of the ICSID. Venezuela Analysis. http://venezuelanalysis.com/analysis/6766. See generally, Appleton S (Mar 31, 2010) Latin American arbitration: the story behind the headlines. International Bar Association. http://www.ibanet.org/Article/Detail.aspx?ArticleUid=78296258-3B37-4608-A5EE-3C92D5D0B979
See Appleton S (Mar 31, 2010) Latin American arbitration: the story behind the headlines. International Bar Association. http://www.ibanet.org/Article/Detail.aspx?ArticleUid=78296258-3B37-4608-A5EE-3C92D5D0B979 (for commentary on these events, as well as investment arbitration in Latin America).
Compare ICSID, List of Contracting States and Other Signatories to the Convention, http://icsid.worldbank.org/ICSID/ with World Bank, Member Countries, http://web.worldbank.org/
See ICSID in crisis: Straight-Jacket or Investment Protection?, Bretton Woods Project (July 10, 2009), http://www.brettonwoodsproject.org/art-564878
See Trakman L (2012) The ICSID and investor state arbitration. In: Trakman L, Ranieri N (eds) Regionalism in international investment law. p 253 (discussing the consequences of these comments for international investment law, ICSID, and the World Bank). See Krever T (2011) The legal turn in late development theory: the rule of law and the World Bank’s development model. Harv Int Law J 52:287; UNCTAD (Dec 2010) Denunciation of the ICSID Convention and BITS: Impact on Investor-State Claims, IIA Issues Note No 2. http://archive.unctad.org/Templates/Page.asp?intItemID=5519&lang=1
See Peterson LE (2012) South Africa pushes phase-out of early bilateral investment treaties after at least two separate brushes with investor-state arbitration. Inv Arb Reporter. http://www.iareporter.com/articles/20120924_1
See generally Tzanakopoulos A (2011) Denunciation of the ICSID convention under the general international law of treaties. In: Hofmann R, Tams CJ (eds) International investment law and general international law: from clinical isolation to systemic integration?; Vincentelli IA (2010) The uncertain future of ICSID in Latin America. Law Bus Rev Am 16:409.
See, e.g., Grewal DS (2018) Investor protection, national sovereignty, and the rule of law (“Making it a permanent feature of a new world economic order would suggest that the “rule of law” can only be achieved by agencies outside – above or without – the state.”) Am Aff 2(1).
See Philip Morris Asia Limited v. The Commonwealth of Australia, UNCITRAL, PCA Case No. 2012–12; Voon T, Mitchell AD. Philip Morris vs. tobacco control: two wins for public health, but uncertainty remains. Columbia FDI Perspectives on Topical Foreign Direct Investment Issues No. 182, September 12, 2016. http://ccsi.columbia.edu/files/2013/10/No-182-Voon-and-Mitchell-FINAL.pdf; Trakman L (2012) Rejecting investor-state arbitration in favor of domestic courts: the Australian example. J World Trade 46(1).
See Kantor M (2011) The transparency agenda for UNCITRAL investment arbitrations: looking in all the wrong places. Inst Int Law Justice 10. http://www.iilj.org/research/documents/IF2010-11 (demonstrating that approximately 76% of the cases in which investment treaty awards were rendered up to June 2006 involved States that fell at or below Number 50 on the Transparency International’s 2008 Corruption Perception Index). See too Franck S (2007) Empirically evaluating claims about investment treaty arbitration. N C Law Rev 86:1; World Bank, Worldwide Governance Indicators (2012) http://info.worldbank.org/governance/wgi/index.asp (the World Bank’s Worldwide Governance Indicators demonstrated further that 68% of those States were in the bottom 60% of its Index for the “rule of law”).
See, e.g., Trakman L (2018) Domestic Courts declining to recognize and enforce foreign arbitral awards: a comparative reflection. Chin J Comp Law 6:174–227. https://doi.org/10.1093/cjcl/cxy009.
See, e.g., Jishnu L (Jan 31, 2012) Secretive tribunals. Hidden Damages (Interview). http://www.downtoearth.org.in/content/secretive-tribunals-hidden-damages (where Van Harten observes that developing countries sometimes are the target of treaties directed at enhancing opportunities for foreign investors from other States and on occasions, leading to significant losses for those target countries). See, too, Trakman LE (2012) The ICSID under siege. Cornell Int Law J 45.
ICSID (2018) The ICSID caseload – statistics. World Bank, Issue 1. https://icsid.worldbank.org/en/Documents/resources/ICSID%20Web%20Stats%202018-1(English).pdf
See generally, Schill SW (ed) (2010) International investment law and comparative public law (discussing the concerns that ISA arbitrators will pay less attention to the public policy consequences of awards for developing States than to the plain words of treaties). See, too, Harten GV (2007) Investment treaty arbitration and public law. pp 122–151; Reinisch A (2011) How narrow are narrow dispute settlement clauses in investment treaties? J Int Dispute Settlement 2:115 (discussing the restrictive construction of investment agreements).
See, e.g., Shan W et al (eds) (2008) Redefining sovereignty in international economic law, part four (commenting on the complexity of sovereignty in international investment law); Stumberg R (1998) Sovereignty by subtraction: the multilateral agreement on investment. Cornell Int Law J 31:491, 503–504, 523–525 (discussing sovereignty). See also Jackson RH (1990) Quasi-states: sovereignty, international relations and the third world; Sir Robert Jennings, Sir Arthur Watts (eds) (1992) Oppenheim’s international law. p 927.
See, e.g., Titi C (2017) The European Union’s proposal for an international investment court: significance, innovations and challenges ahead. TDM 1. Available at www.transnational-dispute-management.com; Howard DM (2017) Creating consistency through a world investment court. Fordham Int Law J 41:1. But cf. Uzelac A (2019) Why Europe should reconsider its anti-arbitration policy in investment disputes. Access Justice East Eur 1:7.
See Shihata IFI (2009) Towards a greater depoliticization of investment disputes: the roles of ICSID and MIGA. In: Lu KW et al (eds) Investing with confidence: understanding political risk management in the 21st century. pp 2–35 (discussing old world views); Franck SD (2007) Foreign direct investment, investment treaty arbitration, and the rule of law. Pac Mcgeorge Global Bus Dev Law J 19:337 (analyzing different views of the rule of law).
CIETAC Investment Rules, art. 32, 55
See Fry J, Repousis O. Towards a new world for investor-state arbitration through transparency. N Y Univ J Int Law Polit 48:795 (on the liberalization of the ICSID Rules, notably in public access to ISA proceedings and awards).
See generally Yackee JW, Wong J (2010) The 2006 procedural and transparency-related amendments to the ICSID arbitration rules: model intentions, moderate proposals, and modest returns. In: Yearbook on international investment law & policy 2009–2010 (discussing transparency in international investment arbitration); Marian C (2010) Balancing transparency: the value of administrative law and Mathews-balancing to investment treaty arbitrations. Pepperdine Dispute Resolut Law J 10:275 (discussing transparency in international investment arbitration).
See generally Cotula L (2011) Law and power in foreign investment in Africa: shades of grey in the shadow of the law; Agyemang AA (1988) African states and ICSID arbitration. CILSA 21:177 (discussing the African signatories, particularly their consent to jurisdiction, their position in the institution, and the appointment of African arbitrators); Johnson AR (2010) Comment, Rethinking bilateral investment treaties in Sub-Saharan Africa. Emory Law J 59:919 (discussing BITs in relation to African countries).
See, e.g., Ruggie J (1982) International regimes, transactions, and change: embedded liberalism in the postwar economic order. Int Org 36:379–415. http://ftp.columbia.edu/itc/sipa/U6800/readings-sm/rug_ocr.pdf; Moravcsik A (2013) The new liberalism. In: Goodin RE (ed) The Oxford handbook of political science.
See Stiglitz J (2010) Freefall: America, free markets, and the sinking of the world economy (providing an account of these recessionary forces and their global consequences). See also Trakman LE (2010) Foreign direct investment: hazard or opportunity? George Washington Int Law Rev 41:1, 15–16, 20.
See Lynch DJ, Telford T, Paletta D, Shih G (May 13, 2019) U.S. prepares to slap tariffs on remaining Chinese imports, which could add levies on roughly $300 billion in additional goods. Washington Post. https://www.washingtonpost.com/business/2019/05/13/trump-warns-china-not-retaliate-tariffs-insists-they-wont-hurt-us-consumers/?noredirect=on&utm_term=.29e20706bc29.
See, e.g., Vattenfall AB, Vattenfall Europe AG, Vattenfall Europe Generation AG v. Federal Republic of Germany (Vattenfall), ICSID Case No. ARB/09/6 (Mar. 11, 2011). On a successful ISDSA claim by Eli Lilly against Canada, see Eli Lilly and Company v. The Government of Canada, UNCITRAL, ICSID Case No. UNCT/14/2 (Mar. 16, 2017).
See M.C.I. Power Grp. L.C. & New Turbine, Inc. v. Ecuador, ICSID Case No. ARB/03/6, Annulment Decision, ¶ 24 (Oct. 19, 2009). See also Hochtief AG v. Arg., ICSID Case No. ARB/07/31 (Oct. 7, 2011) (providing different interpretations of a treaty in the same case in the dissent of Christopher Thomas, Q.C.). See generally Sergio Puig & Meg Kinnear, NAFTA Chapter Eleven at Fifteen: Contributions to a Systemic Approach in Investment Arbitration, 25 ICSID L. Rev. 225 (2010) (providing a systematic approach toward investment arbitration, through the prism of Chapter 11 of the NAFTA).
Trakman L (2018) Aligning State sovereignty with transnational public policy. Tulane Law Rev 93:43. https://doi.org/10.2139/ssrn.3301024
See generally Dolzer R, Schreuer C (2008) Principles of international investment law (discussing investment treaties); Dolzer R, Stevens M (1995) Bilateral investment treaties.
See Foreign Investment Review Board, Current International Investment Issues: OECD Investment Committee, http://www.firb.gov.au/content/international_investment/current_issues.asp?NavID=60 (discussing the development of such international investment norms). See generally Trakman LE (2006) Legal traditions and international commercial arbitration. Am Rev Int Arbitration 17:1; von Staden A (2011) Towards greater doctrinal clarity in investor-State arbitration: the CMS, Enron and Sempra annulment decisions. Czech Yearbook Int Law 2:207 (discussing how different investment policies can influence investment law).
See, e.g., Schreuer C, Weiniger M (2008) A doctrine of precedent? In: Muchlinski P, Ortino F, Schreuer C (eds) The Oxford handbook of international investment law, p 1188 (discussing the absence of binding precedents, at least in principle, in international investment law).
Sauvant K (2017) Reforming the international investment regime: two challenges. In: Chaisse J, Ishikawa T, Jusoh S (eds) Asia’s changing international investment regime
See, e.g., Peinhardt C, Allee T (2011) Devil in the details? The investment effects of dispute settlement variation in BITs. In: Yearbook on international investment law & policy 2010–2011; Weeramantry R (2012) Treaty interpretation in investment arbitration (on different interpretation of words used in BITs).
Illustrating these variable conceptions of ‘fair and equitable’ treatment is a series of cases commencing with the ICSID award in Maffezini v. Kingdom of Spain, ICSID Case No ARB/97/7 (Nov. 13, 2000) (Award on Merits) ; MTD Equity Sdn Bhd and MTD Chile S.A. v. Republic of Chile, ICSID Case No ARB/01/7 (May 25, 2004) ; and Ian A Laird, MTD Equity Sdn Bhd and MTD Chile S.A. v. Republic of Chile — Recent Developments in the Fair and Equitable Treatment Standard, Trans. Dispute Management, Oct. 2004.
On such “legitimate expectations”, see Saluka Investments BV (The Netherlands) v. The Czech Republic ¶ 304 (Mar. 17, 2006) (Partial Award) (Arbitration under the UNCITRAL Rules); Waste Management, Inc v. The United Mexican States ICSID Case No. ARB(AF)/00/3 ¶ 98 (Apr. 30, 2004); International Thunderbird Gaming Corporation v. The United Mexican States (Thunderbird)(Arbitration under the UNCITRAL Rules (NAFTA) ¶ 147 (Jan. 26, 2006); GAMI Investments Inc v. The Government of the United Mexican States (Arbitration under the UNCITRAL Rules) ¶ 100 (Nov. 15, 2004) (Final Award).
On the “margin of appreciation” doctrine, see, for example, Muhammad N (2019) A comparative approach to margin of appreciation in international law. Chin J Comp Law 1(forthcoming); Bakircioglu O (2007) The application of the margin of appreciation doctrine in freedom of expression and public morality cases. German Law J 8:711; Shany Y (2005) Toward a general margin of appreciation doctrine in international law? Eur J Int Law 16:907.
See generally, Dolzer R, Schreuer C (2008) Principles of international investment law. pp 67–86; Schill SW (2009) The multilateralization of international investment law. pp 1–64; See also Organisation For Economic Co-Operation and Development, The Multilateral Agreement on Investment Negotiating Text (1998), http://italaw.com/documents/MAIDraftText.pdf
See Brown C (2013) Commentaries on selected model investment treaties (for commentaries on selected model BITs). On attempts to redress consistencies in international investment arbitration, see Hofmann R, Tams C (eds) (2011) International investment law and general international law: from clinical isolation to systemic integration?; Paulsson J (2007) International arbitration and the generation of legal norms: treaty arbitration and international law. In: Van Den Berg AJ (ed) Int’l Arb. 2006: back to basics? International council for commercial arbitration congress series no. 13. p 879.
The UNCITRAL Rules are a general set of rules that can be applied flexibly to resolve any type of international dispute and are adopted widely globally, including for resolving investor-State disputes. Some of the amendments to the UNCITRAL rules were inspired by the rising use of the Rules in ISA. See UNCITRAL, UNCITRAL Arbitration Rules (2013) http://www.uncitral.org/pdf/english/texts/arbitration/arb-rules-2013/UNCITRAL-Arbitration-Rules-2013-e.pdf.
See Nottage L, Miles K. “Back to the future” for investor-State arbitrations: revising rules in Australia and Japan to meet public interests. J Int Arbitration 26:25 (on the similarities and differences between international commercial arbitration and investment arbitration).
See Titi, supra note 83.
See supra text accompanying note 6.
See Leventhal AG (2018) The 2018 proposals for amendments of the ICSID rules: ICSID enters the era of trump, populism, and State sovereignty. Am Soc Int Law 22(15). https://asil.org/insights/volume/22/issue/15/2018-proposals-amendments-icsid-rules-icsid-enters-era-trump-populism
See Trakman L (2017) Enhancing standing panels in investor-State arbitration: the way forward. Georgetown J Int Law 48:1145, Appendix.
On the case for investor-State arbitration, see, generally, Dugan C, Wallace D Jr, Rubins N (2008) Investor-State arbitration; Muchlinski P, Ortino F, Schreuer C (eds) (2008) Oxford handbook of international investment law.
See Emerson C (Apr 2011) Trading our way to more jobs and prosperity (Government Trade Policy Statement), released by Australia’s Trade Minister. http://www.dfat.gov.au/publications/trade/trading-our-way-to-more-jobs-and-prosperity.html#investor-state. See also Trakman LE (2013) Investor-State arbitration: the Australian case. In: Trakman LE, Ranieri N (Eds) Regionalism in international investment law. pp 344–373; Kurtz J (2012) Australia’s rejection of investor-state arbitration: causation, omission and implication. ICSID Rev 1; Trakman LE (2012) Investor state arbitration or local courts: will Australia set a new trend? J World Trade 46:83.
See Vandevelde K (2005) A brief history of international investment agreements. U C Davis J Int Law Policy 12:157, 172. See also United Nations Conference on Trade and Development, World Investment Report (2018), https://unctad.org/en/PublicationsLibrary/wir2018_en.pdf
See Moser MJ (1998) CIETAC arbitration: a success story? J Int Arbitration 1:30.
See, e.g., Salini Costruttori SpA and Italstrade SpA v. Kingdom of Morocco, ICSID Case No. ARB/00/4 (July 23, 2001) (Decision on Jursidction) (on the conflicting conceptions of property law). See too Sasson M (2010) Substantive law in investment treaty arbitration: the unsettled relationship between international and municipal law (see especially Chapter 4 on property in investment treaties); Garcia-Bolivar OE (2010) Protected investments and protected investors: the outer limits of ICSID’s reach. Trade Law Dev 2:145 (on the requirements to invoke the ICSID’s jurisdiction); Schreuer, supra note 2, at 90–91 (on jurisdictional requirements under Article 25 of the ICSID Convention).
See generally Yackee JW, Wong J (2010) The 2006 procedural and transparency-related amendments to the ICSID arbitration rules: model intentions, moderate proposals, and modest returns. In: Sauvant KP (ed) Yearbook on international investment law & policy 2009–2010 (discussing transparency in international investment arbitration); Marian C (2010) Balancing transparency: the value of administrative law and Mathews-balancing to investment treaty arbitrations. Pepperdine Dispute Resolut Law J 10:275 (discussing transparency in international investment arbitration).
See, e.g., Aguas del Tunari, S.A. v. Republic of Bolivia, ICSID Case No. ARB/02/3 (Mar. 28, 2006) (Order Taking Note of Discontinuance). See also Vandevelde K (2007) Aguas del Tunari, S.A. v. Republic of Bolivia. Am J Int Law 101:179 (providing an overview and analysis of the case).
ICSID Case No. ARB/03/19 (May 19, 2005) (Order in Response to a Petition for Transparency and Participation as Amicus Curiae) at ¶ 19, 22
See Harpaz supra note 53.
See Foreign Affairs and International Trade Canada, NAFTA – Chapter 11 – Investment Settlement of Disputes between a Party and an Investor of Another Party: Transparency (Sept 9, 2009), http://www.international.gc.ca/trade-agreements-accords-commerciaux/disp-diff/nafta-transparency-alena-transparence.aspx?lang=en&view=d (on public statements by the NAFTA on open hearings).
See Gómez KF (2012) Rethinking the role of Amicus Curiae in international investment arbitration: how to draw the line favorably for the public interest. Fordham Int Law J 35:510.
ICSID tribunals began to admit third party interventions in 2007, after the ICSID’s new rule 37 came into force. See eg. Biwater Gauff (Tanzania) Ltd. v. United Republic of Tanzania, ICSID Case No. ARB/05/22 (Feb. 2, 2007); Suez, Sociedad General de Aguas de Barcelona, S.A., and Vivendi Universal S.A. v. The Argentine Republic, ICSID Case No. ARB/03/19 (Feb. 12, 2007). See International center for settlement of investment disputes, ICSID Convention, Regulations and Rules 95–96 (2006); Baldwin E, Kantor M, Nolan M (2006) Limits to enforcement of ICSID awards. J Int Arbitration 23:1 (discussing ‘tactics’ that may be employed in attempts to ‘delay’ or ‘avoid’ compliance with ICSID Awards).
See, e.g., Antonietti A (2006) The 2006 amendments of the ICSID rules and regulations and the additional facility rules. ICSID Rev – For Invest Law J 21:427.
See, ICSID Rules of Procedure for Arbitration Proceedings, ICSID/15 (Apr. 2006), art. 48(4). cf. ICSID Additional Facility Arbitration Rules, art. 53(3), http://icsid.worldbank.org/ICSID/ICSID/AdditionalFacilityRules.jsp (almost identical text). See also Franck SD (2004–05) The legitimacy crisis in investment treaty arbitration: privatizing public international law through inconsistent decisions. Fordham Law Rev 73:1521, 1616; Maupin JA (2011) MFN-based jurisdiction in investor-state arbitration: is there any hope for a consistent approach? J Int Econ Law 14:157, 162.
See, e.g., Nathan KVSK (2000) The law of the international centre for settlement of investment disputes.
See, Pathirana, supra note 51.
See, e.g., Brower C, Steven L (2001) NAFTA chapter 11: who then should judge? Developing the international rule of law under NAFTA chapter 11. Chin J Int Law 2:193, 193–195; Coe JJ Jr (2002) Domestic court control of investment awards: necessary evil or Achilles heel within NAFTA and the proposed FTAA. J Int Arbitration 19:185; Gantz DA (2006) An appellate mechanism for review of arbitral decisions in investor-State disputes: prospects and challenges. Vanderbilt J Transnational Law 39:39. But see, Dodge WS (2001) Case report: Waste Management, Inc v. Mexico. Am J Int Law 95:186 (presenting the case for modeling Chapter 11 on the WTO appellate process).
UNCTAD, Investor–State Disputes: Prevention and Alternatives to Arbitration, UNCTAD Series on International Investment Policies for Development (May 2010), xxiii, http://www.unctad.org/en/docs/diaeia200911_en.pdf
ICSID Case No. ARB/11/15. Proceedings were suspended pursuant to the Parties’ agreement on 22 July 2011.
See Free Trade Agreement between the Government of the People’s Republic of China and the Government of the Republic of Singapore (Singapore-China BIT) (2006), http://images.mofcom.gov.cn/gjs/accessory/200804/1208158780064.pdf
See UNCTAD, Investor-State Dispute Settlement: Review of Developments in 2017, https://unctad.org/en/PublicationsLibrary/diaepcbinf2018d2_en.pdf (on the UNCTAD’s most recent report on investor State dispute settlement).
Schneider M (1996) Combining arbitration with conciliation. In: Van Den Berg AJ (ed) International dispute resolution: towards an international arbitration culture, ICCA congress series no. 8. p 57.
See Kaufmann-Kohler G, Kun F (2008) Integrating mediation into arbitration: why it works in China. J Int Arbitration 25(4):479–492; Nakamura T (2009) Brief empirical study on Arb-Med in the JCAA arbitration. JCAA News Letter 22:10–12.
See Xing Q (Sept 2000) The different right in arbitration and mediation. In: The research on arbitration rights; Ali S (2011) The morality of conciliation: an empirical examination of arbitrator “role moralities” in East Asia and the West. Harv Negot Law Rev 16:1.
See, Cotula, supra note 88.
Trakman, supra note 96
See, e.g., Kurtz, supra note 112. Kurtz relies on the commentary of Joseph Stiglitz to assert, at 11, that ‘“all countries engage in some discrimination” against foreign investors and concedes that “protectionism is a political temptation that is not confined to any political or legal tradition.”
See Mukand SW (2006) Globalization and the “confidence game”. J Int Econ 70:406.
See, e.g., Wolff L-C (2010) Pathological foreign investment projects in China: patchwork or trendsetting by the supreme people’s court? Int Lawyer 44:1001, 1003, 1110–11 (noting China’s protectionism); see also Shen W (2010) Case note, beyond the scope of ‘investor’ and ‘investment’: who can make an arbitration claim under a Chinese BIT? – some implications from a recent ICSID case. Asian Int Arbitration J 6:164, 183–185 (discussing limits placed on complainants under bilateral investment agreements with China).
On the successful use of the defense of necessity, see e.g. Continental Casualty Company v. Argentine Republic ICSID Case No. ARB/03/9, ¶ 28 (Sept. 5, 2008). But see Pope & Talbot Inc. v. Can., Award, Part III. (Apr. 10, 2001) (UNCITRAL Award). See also Pope & Talbot Inc. v. Gov’t of Canada, Foreign Affairs & Int’l Trade Canada, http://www.international.gc.ca/trade-agreements-accords-commerciaux/disp-diff/pope.aspx?lang=en
See Bath V (2012) Foreign investment, the national interest and national security: foreign direct investment in Australia and China. Sydney Law Rev 34:5 (discussing governmental bureaucracies faced by foreign investors in Asia, particularly in China and Australia).
On the tension between private and public interests in investor-State arbitration in regard to the publication of awards, see Karton JDH (2012) A conflict of interests: seeking a way forward on publication of international arbitral awards. Arbitration Int 28. On the public interest rationale for amicus curiae interventions, see De Brabandere E (2011) NGOs and the ‘public interest’: the legality and rationale of Amicus Curiae interventions in international economic and investment disputes. Chin J Int Law 12:85; Mills A (2011) The public-private dualities of international investment law and arbitration. In: Brown C, Miles K (eds) Evolution in investment treaty law and arbitration. pp 97–116
Editors and Affiliations
Rights and permissions
© 2021 Springer Nature Singapore Pte Ltd.
About this entry
Cite this entry
Trakman, L. (2021). Resolving the Tension Between State Sovereignty and Liberalizing Investor-State Disputes: China’s Dilemma. In: Chaisse, J., Choukroune, L., Jusoh, S. (eds) Handbook of International Investment Law and Policy. Springer, Singapore. https://doi.org/10.1007/978-981-13-3615-7_34
Publisher Name: Springer, Singapore
Print ISBN: 978-981-13-3614-0
Online ISBN: 978-981-13-3615-7
eBook Packages: Law and CriminologyReference Module Humanities and Social Sciences