Research On Provisions Of Essential Security Exception In International Investment Treaties

This thesis is centralized on the provision of essential security exception (hereinafter as "ESEP"). It looks into general theoretical and practical issues in connection with such kind of provision through textual analysis and discussion of relevant cases concerning international investment. In addition, based on the positioning of China in the relationship of international investment and such existing provisions in Sino-foreign investment treaties, it discusses specific practical issues like the manner in which China adopts ESEP. The thesis consists of introduction, text, and conclusion with the text being divided into four chapters.Chapter 1 provides an overview of ESEP and consists of three parts. Part 1 defines several basic terms related to ESEP. It firstly demonstrates the definition of exception provision, the upper-seat concept of ESEP, with its classification and moves on to the definition of ESEP and description of the development of ESEP in international investment treaties such as American BITs and German BITs after it was born in friendship, commerce, and navigation treaties. Part 2 differentiates ESEP from relevant doctrine or mechanism like "state of necessity" in customary international law and "national security review system", which helps clarify the boundaries for each and emphasize the characteristics of ESE. Part 3 explains the exemption of relevant treaty duties of a host state and allocation of investment risks between the host state and investors with the application of ESEP.Chapter 2 makes a textual analysis on ESEP. Several typical expressions of ESEP are listed at the beginning of this chapter. It then carries out a dissection on each element of ESEP, including the applicability of such provision to the whole or part of a treaty, the permissible purpose for a contractual party and the nexus between relevant measures and the aforesaid purpose.Chapter 3 turns to the analysis on cases submitted to ICSID regarding ESEP. Given that such practices of ICSID have centered on the disputes between Argentina and American investors based on the up-to-date search, the foregoing disputes are selected as the object of following discussion. This chapter starts with a brief introduction of the economic crisis in Argentina, measures adopted by Argentine government and relevant arbitration in ICSID. It then sums up holdings and reasoning towards key issues by different ICSID tribunals to probe how ICSID interprets and applies ESEP. Lastly, the chapter thinks further about such ICSID practices and provides an analysis form the perspectives of interpretation, self-judging nature and legal consequence of application of such provision.Chapter 4 discusses the meaning of ESEP to China and relevant practical issues and consists of 3 parts. Part 1 examines the current status of international investment of China including FDI and outbound investment to obtain a comprehensive knowledge of the positioning of China in the relationship of international investment; thus understanding the meaning of ESEP to China on the grounds of the brief of negotiation and conclusion of Sino-foreign investment treaties as well. Part 2 sorts out the ESEPs in existing Sino-foreign investment treaties. According to the abovementioned theoretical analysis and the actual condition of China, Part 3 points out that China should treat the function of attracting foreign investment of international investment treaties rationally, be aware of difference in the inclination of interests when China plays either of dual investment roles and differentiate counterparties during the stipulation of such kind of provision.