Restrictions Of International Investment Treaty On National Legislation

In order to promote the public health, the Australia Government has made laws to pack the tobacco products plainly, which faces the strong opposition from the tobacco company, especially the strong protest of Philip Morris. Because of invalid domestic assistance, Philip Morris began to seek international assistance and to try to stop the implementation of tobacco products simple packaging legislation by suspecting that the Australia government has violated the regulations of Hong Kong-Australia bilateral investment treaty. So, under the guidance of the UN international law committee and according to Hong Kong-Australia bilateral investment treaty, Philip Morris asked for investment arbitration compensation claimed that the Australia government had destroyed its interests and Philip Morris did its best to stop the implication of compulsive tobacco products plain packaging for more.However, most of the international investment treaties signed by the investor and local state were achieved on the basement of local state’s compromise. In essence, the treaties were on the premise of protecting the investors’interests instead of the local states. The detail and decisive regulations of the international investment treaties signed by both parties were general and equivocal. As a result, on the base of these international investment treaties, the international investment arbitration was a real challenge for the local state. What’s more, due to the faultiness and unilateralism of the international investment dispute settlement mechanism,the unfavorable local state is often put in the dock and always ended with a lose in lawsuit.Under this circumstance, the local state needs to keep clear mind when signing an international investment treaty. It’s important to create a better investment setting to attract the investment, but more clear clauses should be written to protect the government’s interests. Especially for bilateral investment treaties, it’s also indispensable for national security exception clauses that we should modify the clauses that may cause legal challenge and clear the hypostatic clauses that may cause dispute. In this way, the local state can reduce the possibility of indiscriminate lawsuit. When facing more and more suspects and protests proper reform and change is the best way for international investment arbitration to regain respect and trust. Through these reforms, the interests of the local state can get better protection during the process of international investment, and the state can seek a balance between how to protect the investors and keep local interests.