Research On The Legal Issues Of State-to-state Arbitration Under The Framework Of Bilateral Investment Treaties

State-to-State Arbitration(hereinafter referred to as Inter-State Arbitration)and Investor-to-State Arbitration(hereinafter referred to as Investment arbitration)constitute two important dispute settlement procedures of International investment agreements.In the current International investment agreements,the composition of arbitration clauses in most countries is basically the same,but only the Inter-State Arbitration procedures in bilateral investment agreements have been put into practical use.So far,there have been three Inter-State Arbitration cases initiated under bilateral investment agreements.Since the birth of the first bilateral investment agreement in 1959,investment arbitration has developed rapidly,but Inter-State Arbitration cases never occurred before the 21 st century.In the 21 st century,Inter-State Arbitration under the framework of bilateral investment agreements has finally been practiced.There have been three successive cases of Inter-State Arbitration,namely Peru v.Chile,Italy v.Cuba and Ecuador v.America.Two of the three State-to-State Arbitration cases occurred after Investor-to-State Arbitration.In order to protect the interests of domestic or domestic investors,the host country initiates State-to-State Arbitration against the investor's home country based on the same facts.Because of the low practice of Inter-State Arbitration under the framework of bilateral investment agreements and the lack of theoretical research,these three cases have exposed many legal issues concerning Inter-State Arbitration.Combining these three arbitration practices and the theoretical controversy of scholars,there are some mainly disputes between countries under the framework of bilateral investment agreements: it is difficult to define ‘disputes',disputes of which cases can be regarded as ‘Interpretation or application' disputes,conflicts with investment arbitration and the relationship with diplomatic protection is vague.The general research ideas of this thesis are as follows: based on the problems encountered in the practice of Inter-State Arbitration,this paper synthesizes scholars' theoretical research on relevant legal issues,relevant jurisprudence and international law theory,and so on.In-depth analysis of the above four legal problems,to find out the causes of the problems and put forward solutions;Before analyzing and studying these four legal issues,this paper first introduces the development history of Inter-State Arbitration under the framework of bilateral investment agreement,the provisions of the clauses and the general situation of the three arbitration practices in order to grasp the Inter-State Arbitration procedure as a whole;Based on the analysis of the above four legal issues,the last part of the article looks forward to the development trend of Inter-State Arbitration,and puts forward some suggestions for China to deal with it.This article is divided into six parts,the main contents are as follows:The first part discusses the origin of Inter-State Arbitration under the framework of bilateral investment treaties,the provisions of Inter-State Arbitration,the necessity of Inter-State Arbitration and the basic situation of three Inter-State Arbitration cases,and outlines the framework of bilateral investment agreements from a macro perspective,it could help us to study the legal issues.Inter-State Arbitration originated from Treaty of Friendship,Commerce,and Navigation,in 18-century,which was incorporated when the first bilateral investment agreement was officially born in 1959.This section then explores the Inter-State Arbitration clause on both sides through textual analysis of Inter-State Arbitration clauses.Provisions in investment agreements.The Inter-State Arbitration clause usually includes the content of the arbitration,the composition of the arbitral tribunal,the arbitral procedure,the applicable law,and the apportionment of the arbitration fees.However,some countries have some special provisions;subsequently,this section deals with Inter-State Arbitration under the framework of bilateral investment treaties.The debate on the necessity of existence was analyzed.Based on the previous research,this paper argues that Inter-State Arbitration has the irreplaceable advantages of investment arbitration and can complement investment arbitration.Today,when International investment flourishes,Inter-State Arbitration will certainly play a greater role;This section briefly introduces three cases of Inter-State Arbitration under the framework of bilateral investment agreements,namely Peru v.Chile,Italy v.Cuba and Ecuador v.the United States,and points out the legal issues arising from these three cases.The second part mainly analyzes the identification of “disputes” between countries under the framework of bilateral investment agreements.Whether the dispute exists or not has an important influence on whether the arbitral tribunal can administer the case.In the practice of International arbitration,there have been many differences in the existence of disputes,and there are certain disputes in the judgment of Inter-State Arbitration.This part begins with the general criteria for dispute identification,combined with relevant statutes such as the International arbitration tribunals and the International Court of Justice,as well as expert doctrines,to extract three recognized standards for dispute identification in Inter-State Arbitration,that is,disputes should have legal nature;The parties shall be qualified and the time of the dispute shall be subject to the jurisdiction of the agreement;afterwards,studys the differences in the identification of disputes between countries under the framework of bilateral investment agreements,especially weather the dispute requires the communication.The third part analyzes the causes of Inter-State Arbitration under the framework of bilateral investment agreements.This section begins with a textual interpretation of the Inter-State Arbitration clause in the bilateral investment treaties and combines the claims of the parties in the Peruvian v.Chile and Ecuador v.the United States and the arbitral tribunal to analyze the interpretation or application of the bilateral investment agreement.Whether the dispute applies to Inter-State Arbitration;secondly,this part combines the provisions of the Draft Diplomatic Protection Clause,and the Italian v.Cuba case to analyze how diplomatic protection leads to the initiation of Inter-State Arbitration;finally,this section starts with the views of scholars.It analyzes the possibility of Inter-State Arbitration due to declaratory remedies and presents the author's own point of view on a theoretical loophole in Inter-State Arbitration caused by declaratory remedies.The fourth part analyzes the conflicts and coordination plans between Inter-State arbitration and investment arbitration under the framework of bilateral investment agreements.This section begins with a brief introduction to the conflict cases between Inter-State Arbitration and investment arbitration under the framework of bilateral investment agreements: both of these are investment arbitrations first,and then host country initiates the country based on the same facts in order to safeguard the interests of domestic or domestic investors.This illustrates the possibility of conflicts between the two types of dispute resolution procedures in practice.Secondly,this section explores the possible conflicts between the two types of dispute resolution procedures and the hierarchy of the two dispute resolution procedures in the event of a conflict.This paper argues that if the bilateral investment treaties does not specify the hierarchy of the dispute between the interpretation or application of the treaty,the ranking of the two depends mainly on whether the arbitral tribunal's ruling is binding on the investment arbitral tribunal.If Inter-State Arbitration is initiated for the purpose of diplomatic protection,the order of the two is not determined by the agreement,mainly depending on whether the investment arbitration procedure is at the International Center for Settlement of Investment Disputes(hereinafter referred to as the International Center for Settlement of Investment Disputes).At the end of this section,based on the analysis of the conflicts between the two dispute settlement procedures,the method of conflict resolution is proposed.It is suggested that the jurisdiction of Inter-State Arbitration should be clarified in the conclusion of bilateral investment agreements in the future,and the conflict between the two procedures is expressly prohibited.The fifth part discusses the relationship between Inter-State arbitration and diplomatic protection under the framework of bilateral investment agreements.Aiming at the question of whether the initiation of Inter-State Arbitration by foreign countries in the practice of arbitration is legal,this paper draws on the study of whether the private direct appeal can prevent diplomatic protection,the historical origin of Inter-State Arbitration and related jurisprudence.The idea of initiating Inter-State Arbitration for the purpose of diplomatic protection is legitimate;regarding the initiation of Inter-State Arbitration for diplomatic protection,it is necessary to follow the dispute over the exhaustion of local remedies.This article considers that the exhaustion of local remedies rules needs to be observed.The sixth part first makes a reasonable prediction on the development trend of Inter-State Arbitration under the framework of bilateral investment agreements and puts forward suggestions on how to deal with Inter-State Arbitration.Based on the investigation of the legal issues of arbitration among countries,this paper believes that the number of arbitration cases between countries will increase in the future,and will clearly define the relationship with investment arbitration and define the definition of disputes.Currently,China has not participated in the Inter-State Arbitration under the framework of bilateral investment agreements,but should be prepared for future.Based on some of the shortcomings of Inter-State arbitration,this paper suggests that China should revise the model of bilateral investment agreements,improve the arbitrator appointment mechanism and code of conduct,improve the transparency of Inter-State Arbitration and third-party participation,and establish a mechanism for excessive litigation.