Application Of Exhaustion Of Local Remedies In International Investment Field

With the development of economic globalization, international investment hasbecome increasingly important in economic activities recently. At the same time,international investment disputes have increased in quantities and been morecomplicated in nature. Under this circumstance, the importance of proper investmentsettlement for promoting international economic communication and development isobvious. As an effective principle to resolute the international investment disputes, theexhaustion of local remedies obtained approval from international law jurists, variouscountries’ practices and international legal precedents. However, this principle alsoreceived challenge from investment liberalization and the theory of attenuatingforeign capital jurisdiction of host country as well as relevant bilateral and multilateralinvestment treaties. Throughout the survey of Chinese laws and investment treaties,those documents regulate that investment disputes shall be resolute by local remedies,but also accept investment arbitration, and tend to not regard exhaustion of localremedies as the fundamental principle to resolute disputes between Chinesegovernment and foreign investor with acceptance of the practice of raisinginternational arbitration directly ahead of using local remedies.How shall we regard this change and the attitudes towards investment disputessettlement of China? Does revival of Calvo Doctrine mean exhaustion of localremedies has been taken seriously again after meeting challenges? Will it have influence on international investment disputes settlement? Those questions are allworthy consideration in situation of rapid developments of international investmentand complexity of investment disputes.This thesis summarizes and discusses the content, theoretical basis, applicationscope and exception of exhaustion of local remedies, analyzes the applicationpractices of the principle in multilateral and bilateral investment treaties, and thenputs forward suggestions and measures for applying the principle in China’s foreigninvestment disputes settlement.This thesis is consisted of three parts.The first part is a general overview of theoretical knowledge of internationalinvestment disputes and the principle of exhaustion of local remedies.The second part focuses on international investment field and comprehensivelyanalyses the application of exhaustion of local remedies. Firstly, it discussesapplication range, exception and demands of exhaustion of local remedies ininternational law field especially in international investment field. Secondly, it focuseson practices of this principle in current international investment legal system,including multilateral investment system such as ICSID, MIGA, NAFTA and TPP,American BIT,“Fork in the Road” Provisions, attitudes towards application of thisprinciple of major countries and discussion of exhaustion duration.The third part starts from discussion of Chinese laws and legal practices, andanalyzes China’s different attitudes towards exhaustion of local remedies in differentperiods from survey of BITs issued by Chinese government. Finally, the thesis putsforward personal suggestions to beneficially promote the application of the exhaustionof local remedies principle in international investment field.