Studies On The Legal Issues Of Default Coopetition In The International Investment

In the international investment, there exists franchisation contract between hoststate and investor and Bilateral Investment Treaties (BITs) between host state andinvestment mother state. When a state action of the host state violates both thefranchisation contract and BIT, private investor will be facing a “Coopetition”situation. Generally speaking, investor will have the right to select litigation againstthe default of either contract or BIT. If default of contract is selected, the lawsuitwill be submitted to the court in the host state and subjective to the law of the hoststate. If default of BIT is selected, the case will be submitted to ICSID tribune andsubjective to the BIT. If the investment contract has exclusive forum selectionclause, the submission to ICSID tribune will be astrict by this exclusive forumselection clause， the arbitration clause in the BIT cannot prior to the exclusiveforum selection clause in the investment contract. If the BIT has stated that theinvestor shall seek local remedies, the investor shall resort to the internationalarbitration only when such local remedies fail or are in conspicuous favor of thehost state.Through studying the arbitration cases of ICSID, it is discovered that somecontract defaults are dissimilated into “coopetition” cases in order to facilitate thefoundation of tribune arbitration.(i.e., certain action of host state violates theinvestment contract rather than the BIT but the tribune managed to enlargeexplanations of clauses in the BIT and materialize violation of BIT thus turning tocase into “coopetition” which, upon the selection of private investor, may grantICSID tribune jurisdiciton.) However, such practice may have quite a few defects.China has grown from a country of net capital inflow into a giant of both capital inflow and outflow. In order to maintain fine investment relations, Chinacan hardly do without BIT as either mother state or host state. Currently, Chinahas signed BITs with more than130countries in the world,100of which areeffective. In such background, China shall carefully prepare its BIT clauses toguard against the negative impacts from the enlarged explanations of BITs by theICSID tribune.The first chapter of the thesis analyzes the cause, reason and proper solution of“coopetition” and concludes from the real ICSID cases that there are two ways todissimilate cases into “coopetition” cases, giving amplified interpretation to theconsent to ICSID’s jurisdiction and widening the application of Umbrella Clause.The second and third chapters illustrate in detail how ICSID tribune makes use ofthe two ways. The analysis is based on real casese of ICSID and studies theirnegative impacts. In the conclusion, useful recommendations concerning BITssigning or revision are provided with regard to BITs signed by China.