Study On The Parallel Proceeding Between WTO Dispute Settlement Mechanism And Investor-State Arbitration

Based on diversified development background of the international trade and investment, international dispute parties are able to apply different dispute settlement procedures to resolve disputes. When same or similar disputes dispute settlement procedures exist in the same time, the overlapping or conflicting issues of different jurisdictions are more prominent. In the US-Canada Softwood Lumber Case, the parties initiated various procedures under different dispute settlement mechanisms in order to find more remedies and increase its success rate on recovering. Parallel proceedings of such various dispute settlement mechanisms exist not only between procedures under the same mode (litigation or arbitration procedures), but also between procedures under different modes, such as WTO dispute settlement mechanism and Investor-State arbitration. Substantially speaking, the essence of the parallel proceedings between WTO dispute settlement mechanism and Investor-State arbitration is an overlap of different jurisdictions, rather than the jurisdictional conflict. Yet, the results of the overlapping jurisdictions are quite similar to results of the jurisdictional conflict:conflict determination of facts, contradictory application and interpretation of legal concepts, and the adverse effects on the finality of the decisions. The root of the problem is not only the increasingly blurred boundaries of international trade and investment rules, but also the procedural conflicts of WTO dispute settlement mechanism and Investor-State arbitration in essence. Moreover, the two mechanisms are quite silent on solving the problem of overlapping jurisdictions. This paper mainly focuses on the parallel proceedings of WTO dispute settlement mechanism and Investor-State arbitration and the overlapping issue it brings. The paper further analyses various measures which are currently used to solve the problem of jurisdictional conflict and overlap, trying to find out a better way to consummate the issue. The analysis contains two parts:the first part is focusing on the operation mode of the two mechanisms, and the second part is focusing on the relationships between the two mechanisms. In conclusion, from the perspective of the parties, the Most Favored Nation Treatment could be better used in signing BITs or FTAs by the parties based on case-by-case analysis, in order to remit the potential overlapping jurisdictions on the level of formulating the treaty. Additionally, by bringing the arbitral awards which are compliant with corresponding WTO rules into the scope of the "public policy" may also partly solve the jurisdictional overlapping of WTO dispute settlement mechanism and the Investor-State arbitration on the level of recognition and enforcement of the arbitral awards.