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China's Innovative ISDS Mechanisms and Their Implications

  • Huiping Chen (a1)
Extract

International arbitration before Western-based institutions is the dominant mode of investor-state dispute settlement (ISDS). The Washington-based International Centre for Settlement of Investment Disputes (ICSID), the Hague-based Permanent Court of Arbitration, the Arbitration Institute of the Stockholm Chamber of Commerce, and the International Court of Arbitration of the Paris-based International Chamber of Commerce handle the vast majority of the world's international investment disputes. ICSID alone administers over sixty percent of the cases, while the others account for an additional twenty percent. Yet China has begun to innovate in ISDS over the last few years. These innovations have taken three main forms. The first is the extension of the jurisdiction of existing commercial arbitral institutions in China to cover foreign investment disputes. The second is the creation of new Chinese courts to possibly handle contractual investment disputes. The third is the formation of joint arbitration centers with states in regions where China invests heavily, such as Africa. This essay describes these changes and argues that they should be understood as reflecting an important facet of China's broader international strategy. In particular, the recent innovations aim to furnish adequate protection to Chinese investors in foreign countries, particularly developing states; actively shape international discourses on international investment law; and offer alternative, Chinese-initiated institutions that will break the monopoly of the West.

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This is an Open Access article, distributed under the terms of the Creative Commons Attribution licence (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted re-use, distribution, and reproduction in any medium, provided the original work is properly cited.
Footnotes
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I would like to thank Prof. Anthea Roberts and Prof. Congyan Cai for comments on earlier drafts.

Footnotes
References
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1 According to the UN Conference on Trade and Development, there were 855 cases as of December 31, 2017. ICSID administered 542 of these cases while other arbitration institutions handled another 188. The rest were not administered by any institution or are cases on which data is unavailable. Arbitral Rules and Administering Institution, UNCTAD Investment Policy Hub (Dec. 31, 2017).

2 The SCIA 2016 Arbitration Rules provide that the SCIA “accepts arbitration cases related to investment disputes between states and nationals of other states.” Shenzhen Court of Int'l Arbitration, 2016 Arbitration Rules art. 2(2) (effective Dec. 1, 2016).

3 Shenzhen Court of Int'l Arbitration, Guidelines for the Administration of Arbitration under the UNCITRAL Arbitration Rules (effective Dec. 1, 2016).

5 Shenzhen Court of Int'l Arbitration, SCIA Concludes Cooperation Agreement with ICSID in Washington, D.C. (June 27, 2018).

6 China Council for the Promotion of Int'l Trade (China Chamber of Int'l Commerce), China International Economic and Trade Arbitration Commission International Investment Arbitration Rules (For Trial Implementation) (effective October 1, 2017).

9 This much is apparent from the title of the most important document in the creation of the international commercial courts. See id.. The opinion was reviewed and passed by the Central Leading Group for Comprehensively Deepening Reform on January 23, 2018, and officially issued by the General Office of the Communist Party Central Committee and the General Office of the State Council of the People's Republic of China on June 28, 2018. Id.

12 China Int'l Commercial Court, supra note 10.

16 China-Africa Joint Arbitration Centre Shanghai; The Forum on China-Africa Cooperation Johannesburg Action Plan (2016-2018), Ministry of Foreign Affairs of the People's Republic of China (Oct. 12, 2015).

17 The China Africa Joint Arbitration Centre, Dentons (Jan. 26, 2017).

18 For example, the Arbitration Foundation of Southern Africa International clearly states on its website that its jurisdiction does not cover China-Africa disputes. See AFSA International.

19 China Ministry of Commerce, Report on Development of China's Outward Investment and Economic Cooperation 124 (2016) (Chin.).

20 China Ministry of Commerce, 2016 Statistical Bulletin of China's Outward Foreign Direct Investment 47 (2016) (Chin.).

22 Huiping Chen, Sino-African BITs Practice: A New Legal Paradigm?, Soochow L.J. 65 (No. 2, 2012).

23 UNCTAD, World Investment Report 2017, at 14 (2018).

25 G20 Guiding Principles for Global Investment Policymaking, G20 Trade Ministers Meeting Statement, Shanghai, Ann. III (July 9–10, 2016).

26 World Trade Org., Joint Ministerial Statement on Investment Facilitation for Development, WTO Doc. WT/MIN(17)/59 (2017).

28 See Kariuki, supra note 21.

I would like to thank Prof. Anthea Roberts and Prof. Congyan Cai for comments on earlier drafts.

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