An Analysis Of European International Investment Court Proposal And Its Impact

Investor-State Dispute Settlement(ISDS)is derived from international commercial arbitration,with an aim to avoid the politicization of international dispute settlement and to protect foreign investment.Since the late 1980s,developing countries,which had objected to ISDS before,also have accepted it.After that,ISDS provisions have been incorporated in all kinds of bilateral investment treaties and free trade agreements.However,with the development of the practice of international investment arbitration,the legitimacy crisis of ISDS has become well-known.International community questions various aspects of ISDS,including superior rights to foreign investors,ignorance of host states'right to regulate,lack of impartiality and independence of arbitrators,inconsistencies in decision making,and lack of transparency of arbitration procedures.In reaction to these concerns,ISDS is facing considerable debates about ways to reform it at the national,regional and international levels.Reform debates are also very heated within Europe.The European Commission conducted extensive public consultations and eventually,it made a proposal of establishing an "international investment court" in the draft text of Transatlantic Trade and Investment Partnership(TTIP).It is very important for this thesis to analyze whether the current defaults of ISDS will be eliminated by such an international investment court system from the academic aspect.More importantly,since China and the European Union is negotiating their bilateral investment treaty,such an analysis also has very significant meanings in practice.According to the proposal,host states' right to regulate has been specified under provisions;investors do not have procedural rights to appoint arbitrators any more;instead,the parties to the treaty will make a list of arbitrators in advance;an appellate system will be established to increase the consistency of arbitration outcomes;and the transparency of the procedure will be improved significantly.Based on the proposal,the European Commission has taken international community's concerns into consideration regarding the defaults of ISDS.However,only time can tell whether all of those concerns will be addressed appropriately in the future and whether any other practical problems will appear in the process of implementation of international investment court.China,as both an important capital-importing and capital-exporting country,should try to strike the balance between the protection of investors,interests and the execution of host states' regulatory rights.Actually,the aim of international investment court proposed by the European Commission is in the interests of China.However,there are still a lot of practical challenges faced by such an international investment court.China should pay very close attention to the latest development of TTIP negotiation and any important comments from the international community on the European international investment court proposal.Furthermore,it is a wise strategy for China to seek such a good opportunity at the point of transition for international investment law to protect its own benefits and interests.