A Study On Investor's Right To Arbitration Under ICSID Convention

International Center for Settlement of Investment Disputes(ICSID)was established by the Convention on the Settlement of Investment Disputes between States and Investors(the ICSID Convention).In recent years,ICSID has become one of the leading mechanisms in international investment dispute settlement system.Up till now,China has signed 134 bilateral investment treaties,among which 51 treaties choose ICSID as one of the dispute settlement mechanism,and 19 treaties choose ICSID as the only one mechanism.Meanwhile,registered are two ICSID cases involving China.Thus,it's significant to study the risk of ICSID confronted by member states including China.The application from investors is the first step to start ICSID arbitration procedure.Therefore,it's significant to know what investors have the right to bring a case to ICSID,or to put it another way,who shall have the right to apply.Under ICSID rules,the investor's right to apply is rooted in ICSID's jurisdiction over disputes.Whether an investor is competent to apply mainly concerns the definition of investment and investor under international investment treaties(IIA)agreed by member states.In practice,the arbitral tribunal gradually expanded the scope of competent investor by broadly interpreting the definition of investment and investor(the expansion).The expanding scope of competent investors burdened member states with huge checks.Meanwhile,the expansion resulted in contradictory arbitration verdicts,though the arbitrated government action is the same,which puts the legitimacy of ICSID under stake.Besides,the expansion also leads to other legal conflicts,including but not limited to conflicts between domestic laws of member states,conflicts with creditor's rights etc.Based on studies over ICSID precedents,a number of factors contribute to the expansion.First,it starts with the broad and general definition of investment and investor in IIA.Then,it's accompanied with the lack of legal reasoning framework under ICSID,which leaves lots of leeway to the arbitral tribunal to interpret the IIA.And all these add up to the direct cause-the arbitral tribunal tends to interpret the IIA broadly had the definition been missed or inaccurate.It's not difficult to find out that the arbitral tribunal relied on article 31 and 32 of the Vienna Convention on the Law of Treaties to interpret IIA.Usually,ICSID arbitral tribunal starts with IIA to see if IIA has defined the certain concept;if the IIA does not define the concept or does not define it accurately,the tribunal tends to resort to objective interpretation by referring to authoritative dictionaries.However,most ICSID tribunals are satisfied with the definition in those dictionaries and stop probing into other sources,which caused lots of disagreements.Though some ICSID arbitral tribunal would probe into the contending parties'subjective considerations,both the number and the proportion are quite limited.Some ICSID tribunals resort to subjective interpretation when IIA does not stipulate certain concepts,while some still consider the parties' subjective consideration together with the?A definition.It's left known which method ICSID tribunal would choose if subjective interpretation contradicts with objective interpretation,since no cases studied indicated such a scenario.It's under dispute whether it's appropriate for ICSID tribunal to interpret broadly the?A.What's certain is that miss interpretation of IIA itself would not annul the verdict,which alarms member states to amend ?A so as to avoid multiple arbitrations due to the expansion.The ways to amend IIA could be as followed:add term of waiver,so as to restrain one investor's right to apply for multiple times in different investment arbitration mechanism;add term of consolidation,so as to avoid multiple arbitrations regarding one government act;add term of non-benefiting,so as to stop investors setting up shell company in order to be competent to apply for arbitration.By amending IIA,member states could,to some degree,lower the risk of the expansion of investors' right to arbitration.Consequently,member states could encourage and promote foreign investment without the legal and financial burdens brought by ICSID arbitration.