On The Application Of The Benefit Rejection Clause In The Investment Treaty

The denial of benefit clause which set in the international investment treaty is mainly used to prevent the third-country investors from claiming the interests from the host country by registering and manipulating the company that has no substantial economic connections with the contracting state.In recent years,it has become common to set DOB clause in investment treaty,and disputes regarding the application of these clauses have gradually increased.Due to the ambiguity of the provisions of these clauses,the substantive and procedural requirements of DOB clauses are not clear.The arbitral tribunal's rulings vary widely.This paper attempts to analyze the applicable requirements of DOB clauses by studying the texts of relevant investment treaties and arbitration cases.On this basis,it puts forward suggestions for incorporating and improving the text which would be beneficial when China concludes investment treaties in the future.This paper first expounds the definition and constituent elements of DOB clauses,and discusses its applicable objects and limitations.After that,the paper explores the application status quo of DOB clause and analyzes the reasons for the dilemma.Then,this paper focuses on the analysis of substantive and procedural requirements of DOB clauses.Finally,the paper gives several advices of improvement of DOB clause.