Research On Treaty Shopping In ISDS

Treaty shopping is the process of routing an investment through restructuring one's control-relationship to gain access to the protection of a specific IIA which the investor cannot rely on before.Due to the simple and fixed standard of nationality and the tribunal's tendency to broaden its jurisdiction,treaty shopping is commonly considered to be practicable and legal except for those through time-sensitive restructuring.To deal with the problem of treaty shopping by those not aimed to be protected,home states usually choose to restrict the scope of ‘Investor' and to adopt the Denial of Benefits Clause in the IIAs which they signed.However,according to the International arbitration practice to date,the abovementioned measures are not as effective as they meant to be because the tribunal often applies the ‘substantial business activities' under a low standard and imposes duties on home states when citing the Denial of Benefits Clause.Most IIAs signed by China do not take any measures to deal with treaty shopping.This article will analyze the treaty shopping phenomenon and the ability of IIAs signed by China to deal with the treaty shopping problem,and give some advice on how to improve these IIAs.