Confusion or Clarity in Perspective: Jurisprudential Review of the Investor-state Arbitration Clause in the ASEAN china Investment Treaty and the Award on Jurisdiction in the First China-Related ICSID Case - WAMR 2010 Vol. 4, No. 1
Professor Dr. Wei Shen, PhD (LSE), LLM (Cantab),
LLM (Michigan), LLM & LLB (ECUPL); Attorneyat-
Law, New York; FHKIArb, is a Professor of Law
at Shanghai Jiao Tong University KoGuam Law
School. Prior to teaching at the law school,
Professor Shen practiced in major US and UK firms in Sydney,
Shanghai, Chicago, and Hong Kong for a decade primarily
assisting multinational clients in their China-related transactions.
Professor Shen's current research interests include international
investment law, financial regulations and corporate governance.
Originally from World Arbitration And Mediation Review (WAMR)
CONFUSION OR CLARITY IN PERSPECTIVE:
JURISPRUDENTIAL REVIEW OF THE INVESTORSTATE
ARBITRATION CLAUSE IN THE ASEANCHINA
INVESTMENT TREATY AND THE
AWARD ON JURISDICTION IN THE FIRST
CHINA-RELATED ICSID CASE
Apart from the financial crisis, the universe of investment
treaty arbitration witnessed two eye-catching events in 2009.
First, the Association of South East Asian Nations ("ASEAN")1 and
the People's Republic of China ("China")2 entered into an
Agreement on Investment of the Framework Agreement on
Comprehensive Economic Cooperation (the "ASEAN-China
Treaty")3 in Bangkok, Thailand on August 15, 2009. Second, the
Decision on Jurisdiction and Competence in the case of Tza Yap
Shum v. The Republic of Peru (the "Tza Yap Shum Award"), the first
ever case heard on a bilateral investment treaty ("BIT") involving
China, rendered on June 19, 2009 by an arbitration tribunal (the
"Tribunal") convened under the auspices of ICSID.4
The focus of this article is to review some key aspects of the
investor-state arbitration clause in the ASEAN-China Treaty and
contrast it with the Tza Yap Shum Award. First, we will briefly
review the BIT practice of China and ASEAN member states to
illustrate the importance of the investor-state arbitration clause.
Then, several key elements in the investor-state arbitration clause
will be analysed in detail in Section 2. Finally, in Section 3, we will
discuss Asia's approach towards multilateralism.
I. OVERVIEW OF ASEAN AND CHINA'S BIT PRACTICE PATTERNS
A. China and BITs
China did not conclude BITs until March 29, 1982, when it
concluded its first BIT with the Kingdom of Sweden. Until 2009,
China had already concluded 126 BITs, ranking only second to
Germany with 136 BITs.5 China's BIT practice is closely connected
to and vividly reflects the pattern of its outbound and inbound
foreign investment activities.