Study On The Legal Issues Of "Treaty Shopping" In International Investment

In the practice of international investment arbitration,is 'treaty shopping' a 'legal nationality planning' or a 'treaty abuse'?This is the question investment arbitral tribunals have been in creasingly faced with over past years in investment treaty arbitration.As investment arbitrations have been soaring over the past decade,the practice of treaty shopping has gained continuous ground in foreign investment disputes.However,there is no accepted or authoritative definition to explain the'treaty shopping'.The 'treaty shopping' can take many forms.For example,investors may structure(or restructure)their investment in a favourable home State jurisdiction,thereby enabling them to invoke other investment treaties normally not available to them.Investors may transfer an investment claim to another(natural or legal)person holding a nationality enabling access to a(more)favourable investment treaty.Natural persons holding dual nationality may invoke one of the nationalities in an attempt to come under the protection of a specific(more favourable)investment treaty.Investment disputes involving the 'treaty shopping' have continued to increase in international investment practices,and their legitimacy has been controversial.In the practice of investment arbitration,some arbitration awards affirm the effectiveness of'treaty shopping',while the other ones negate its effect.For example,the arbitral tribunal supported 'treaty shopping' in the cases of 'Mobil v.Venezuela','Tokios Tokeles v.Ukraine' and 'Aguas del Tunari v.Bolivia',while the arbitral tribunal did not support 'treaty shopping' in the cases of 'Phoenix Action Ltd.v.The Czech Republic','Exxon Mobil Corporation v.Venezuela' and 'Cementownia v.Turkey'.Furthermore,the scholars also have different views and opinions on the legitimacy of the 'treaty shopping' in the academic community.In this paper,we will analyze the legality of 'treaty shopping' by introducing the generation,definition,type and cause of the act of 'treaty shopping' in international investment arbitration,and comparing it with 'forum shopping'.Furthermore,we also analyzes underlying causes why the arbitral tribunal allows and restricts 'treaty shopping' by comparing the typical cases in international investment arbitration practice.Finally,we propose some efficient suggestions about how to prevent the investor's behavior of 'treaty shopping'.The first part is an overview of 'treaty shopping' in international investment.This part mainly introduces the definition,types and causes of 'treaty shopping',and makes comparison with 'forum shopping'.Among them,we laid special stress on analyzing the reasons and types of the act of 'treaty shopping'.The second part is an analysis of arbitration cases that allow the 'treaty shopping'.It describes the considerations that support the 'treaty shopping',such as the factors of sovereign consent and accessing to justice.The third part is an analysis of the cases of restricting the 'treaty shopping' in arbitration practice.Then it lists the reasons for questioning the legitimacy of the 'treaty shopping',such as whether it violates the principles of reciprocity and good faith.The fourth part proposes our suggestions on how to guard against 'treaty shopping'.For example,make clear the definition and scope of'investment' and 'investor' in an investment treaty,and add the interest vetoing clause to the bilateral investment agreement.