Research On Standards Of ICSID Jurisdiction

With performance of "Going-out" Strategy, rapid development of domestic economy and strengthening of power of enterprises, the overall scale of oversea investment of Chinese enterprises is rapidly expanding. However, during such process, the enterprises often suffer great losses due to legal risks and political risks, such as sanctions of host states, protectionist policies and nationalizations, which resulted from the difference of political systems and legal environments.Therefore, in order to insure the long-term stability of the performance of direct investment strategy, smoothness of "Gong-out", security of benefits and reduction of macro risks, we need to take advantage of the relevant international platform maximally, reasonably and effectively. As the first dispute settlement institution which targets on investment dispute, from an international perspective, ICSID plays a more and more important role, while jurisdiction is the key issue. The writer will start from the provisions of jurisdiction in Washington Convention based on the recent year’s relevant practice experience of ICSID arbitration tribunal, and then to empirically analyze the tribunal’s jurisdiction decisions and focus to analyze the requirements which consist of the jurisdiction. Therefore, the writer is able to provide some tips for our government and investors to take good advantage of ICSID system.In addition to Preface and Conclusion, this article has five parts.Part One introduces the basic information of ICSID institution, the operation mode of arbitration procedure and the general situation of jurisdiction.Part Two mainly researches on the subject element, illustrates the specific scope of subject, analyzes the question come out often in practice and corresponding judging standards., and finally concludes the following:Firstly, as a characteristic subject, state-owned enterprises’ operations can be attributed to its State of nationality when it performs governmental duties while has no difference from private enterprise when it carries out pure commercial operation. Secondly, the parts and institutions of contracting parties need to be formally appointed, otherwise ICSID will not admit its rights. Thirdly, as to the identification of nationality of natural person, it should depend on conditions. Fourthly, as to the special case of jurisdiction,"treated as other contracting parties’ national" involves numerous aspects of issues, for example, the existence of "Foreign Control", the key element, should be determined by the objective condition but not the agreement of parties concerned; as to the nationality of "Control", the tribunal mainly takes direct and key situation of control into consideration.Part Three chiefly studies the object element of jurisdiction, introduces the specific requirements of such elements, carries out corresponding analysis, and finally concludes the following:Firstly, the tribunal is apt to affirm the business operation which is not easy to be recognized as an investment; Secondly, the investment specified in Washington Convention is not completely equivalent to business operation; Thirdly, indirect investments is under ICSID jurisdiction in some specific conditions.Part Four principally analyzes the subjective element of jurisdiction and finally concludes the following: Firstly, as to a national of another contracting party,"Consent" should be provided expressly, but also can be inferred sometimes; Secondly, the Consent provided by a subsidiary can be assumed as provided by its parent company but not vice versa; Thirdly, ICSID has not jurisdiction on the disputes which is occurred before "Consent" comes into effect; Fourthly,"exhaustion of local remedies" is just an additional requirement but not a necessary one for ICSID jurisdiction; Fifthly, once consent to resort to ICSID, the parties concerned shall not apply diplomatic protection.Part Five provides several suggestions and tips based on the analysis of aforementioned parts for China and Chinese investors. As to this, the writer primarily holds the view that Chinese government should treat different countries depend on different conditions when conclude a bilateral investment protection agreement through defining the terms differently, so that the government can protect the national interests very well. Moreover, the investors should insure themselves conform to the requirements of ICSID jurisdiction so that they are capable to take advantage of ICSID system to protect their own interests.