Analysis On The EU Reform Of Investor-State Dispute Settlement Mechanism

Since recently, a large number of multilateral agreements contain investor-state dispute settlement provisions. However, Those bilateral investment treaties only simply describe the investor-state dispute settlement mechanism and rely on international investment arbitration rules. With the substantial increase in investor-state dispute cases, The arbitration system, which was made up of ICSID Rules of Procedure for Arbitration Proceedings, Arbitration Rules and UNCITRAL Model Law on International Commercial Arbitration, exposed many problems and caused widespread concern in the international community.Given that the legitimacy, impartiality and consistency of international investment arbitration system has been questioned, TTIP negotiations between the European Union and the United States stalled and the need of further promoting its International Investment Policy. The European Union put forward reform proposals for the investor-State dispute settlement mechanism and hopes to build a permanent international investment court, as well as an appellate mechanism, to address these issues.By rethinking the reasons behind the construction of EU permanent international investment court, this paper analyzes the relationship between this attempt and the theory of global governance, and regards this proposal a radical one. Then by use of comparative research method, this paper analyzed the difference between its appellate mechanism,WTO appeal mechanism and ICSID award annulment system. And then, it summarizes the impact of the EU reform on China-EU bilateral investment treaty negotiations and taking into account the circumstances of China, this paper suggests adopting the investor-State dispute settlement mechanism in China-EU bilateral investment treaty, and exploring establishing an appellate mechanism with the European Union, but not adopt international investment court. For the design of investor-State dispute settlement clause, we need to explicitly define the implication of key terms such as ‘investment’ and provide the local remedies flexibly according to the different properties of the dispute, and reserve the right of interpretation of the investment agreement to assist the arbitral tribunal to explain investment agreements rationally.