Arbitration Without Privity In International Investment Arbitration Research

Arbitration without privity, as a very special species of international investment arbitration, has been observed by more and more scholars. This kind of arbitration is mainly stipulated in international treaties and municipal foreign investment laws to solve legal disputes between investors and host states caused by direct investments. Host states make consents to international arbitration and other international remedies in bilateral or multilateral treaties or municipal investment laws in advance. And when certain kinds of investment disputes happen in the future, investors will have the right to resort to international arbitration for resolution, which should not be rejected by host states. Analyses and comments will be made from aspects of theory, legislation and practice in this paper.The first chapter is mainly about conceptual issues of arbitration without privity. Generally speaking, arbitral agreement still exists in arbitration without privity, just in different form with international commercial arbitration. But in some treaties and municipal laws, a variety of arbitration without privity exists, i.e. compulsory arbitration, in which the consent of the investor is not necessary. Arbitration without privity aims to solve disputes caused by acts of states, so it is a public law mechanism, not arbitration in private sector.The second chapter mainly introduces legislations about arbitration without privity, including the stipulation in the International Convention on the Settlement of Investment Disputes between States and Nationals of Other States, which is the convention created this legal mechanism at the first place, related regulations in some bilateral and multilateral treaties, and municipal laws. Comparisons and comments among these legislations are also included in this chapter.The third chapter mainly discusses controversial issues concerning arbitration without privity produced during legal practices, including discussions toward fork in the road clause and most favoured nation treatment. Fork in the road clause is about the conditions of resorting to international arbitration. Usually, between domestic judicial remedy and international arbitration, the investor can only choose one to solve the dispute. But this clause has always been put aside because of the expanding jurisdiction of arbitration tribunals. Most favoured nation treatment is traditionally treatment relating to material issues, but arbitration tribunals always interpret it in a way procedural issues are also included, in order to expand their jurisdictions.The last chapter mainly analyzes and comments on treaties concluded by China with other states and cases of arbitration without privity concerning China. Ever since1998, most treaties concluded by China do not impose too many restrictions on disputes with arbitrability, but as a developing country, China may have to face more international arbitrations, due to its unstable laws and policies. Meanwhile, China is also confronted with the problem of balancing the interest of state and foreign investors.This paper aims to clarify theoretical debates about arbitration without privity by analyzing legislations and legal interpretations. And through case studying, the arbitral tribunals" tendency of expanding their jurisdictions is demonstrated to illustrate the necessity of improving treaty provisions as well as domestic investment environment in China.