A Study On Arbitration Mechanism Of Investment Dispute Between China And Africa

Africa is the second largest continent besides Asia, as well as the continent with most developing countries. Abundant natural resources, huge market potential, good political environment, rapid economic development, all of these make Africa become the world investment treasure. In recent years, under the "going out" strategy and "Forum on China-Africa Cooperation ", the scale of China’s direct investment in Africa becomes more and more big, and the investment covers more countries and fields. The special relationship between China and Africa made African countries warmly welcome investments from Chinese, while the investments brought Africa economic vitality.However, investing in Africa will face not only historic opportunities for development, but also some challenges. There exists complicated ethnic composition, religious diversity, and serious racial discrimination in Africa, with any of these contradictions could easily cause the political conflicts and turmoil, which results in aa great impact on the investment of foreign investors. Meanwhile, the development of different African countries is obviously imbalanced. The prevalence of corruption in most countries, different legal system due to colonial history, poor public security situation in some areas, prone to natural disasters and so on, all these factors lead to high rates of investment risk.In practice, because of the distrust of the local judiciary and the low efficiency of African countries, foreign investors tend to settle the Investor-State dispute by arbitration. Therefore, a comprehensive study on arbitration mechanism of investment dispute between China and Africa has great significance. The study would provide Chinese government a useful reference on how to improve the arbitration mechanism to effectively protect Chinese investment in Africa.This paper includes four parts:Chapter I, The present situations of Chinese investment in Africa and dispute settlement approaches. This part is an overview of the general condition of Chinese investment in Africa. First, introducing the current situations and characteristics of Chinese investment in Africa, and noting that the investment in Africa is faced with some political, legal and other risks. Then, analyzing the existing dispute settlement approaches, subsequently emphasizing that it is necessary and good to resolve investment disputes by arbitration.Chapter II, the legal basis of arbitration on investment disputes between China and Africa. This part analyzes the legal basis of arbitration from two aspects--international law and domestic law. The legal basis on international law including the ICSID Convention, the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, and bilateral investment treaties between China and Africa; the legal basis on domestic law including the relevant laws of the African regional organizations and the investment laws and arbitration laws of African countries.Chapter III, analysis on several modes of international investment arbitration in Africa. This section is the focus of this paper. First, introducing the several models of international investment arbitration--ICSID arbitration system, ad hoc arbitration system, and other institutional arbitration. By comparing these types of arbitration mode, pointing out that non-ICSID arbitration system is actually no different from ordinary international commercial arbitration, while ICSID arbitration system has a unique advantage with expertise and self-sufficiency. Then analyzing the challenges faced by the international investment arbitration mechanism--lack of legitimacy and transparency, inconsistent arbitration awards, and interest imbalance between foreign investors and the host country. In response to the crisis, host countries chose to denounce the ICSID Convention or review their BIT with other countries. Finally, in the writer’s opinions, although the arbitration mechanism of international investment disputes is flawed, there is still a reasonable value of its existence.Chapter IV, the improvement of arbitration mechanism for Chinese investment disputes in Africa. This section is also the focus of this paper. On the basis of analysis above, this part is about some proposal for Chinese government to improve the investment arbitration system in Africa. On the one hand, combining with the background of friendly cooperation relationship in politics and economy between China and Africa, we should establish the mutual understanding and respect position, and follow the principles of equal consultation, fairness-mutually beneficial and pacta sunt servanda for dispute settlement. On the other hand, the government could establish a new model BIT based on China-Tanzania BIT, according to our national conditions and the sustainable development goal; and on the basis of a trade-off analysis, we could determine the useful modes for the arbitration of investment dispute between China and Africa. In addition, for the interest balance between Chinese investors and host countries, and in some degree enhance the acceptance of African countries for arbitration awards, we could also consider the African regional arbitration institutions when the investment dispute involves contractual rights and obligations.