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International Investment Agreements and Investor-State Arbitration in Asia

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Abstract

States across Asia have long engaged in international investment treaty making and to a lesser extent in investor-state dispute settlement (ISDS) proceedings. Engagement has intensified, first as bilateral investment treaties (BITs) proliferated especially from the 1990s and subsequently as Asian states started to conclude more comprehensive bilateral and then regional free trade agreements (FTAs), including within and with the Association of Southeast Asian Nations (ASEAN). Some nations have been more cautious historically, and recent experiences with ISDS claims have led Indonesia and especially India to terminate many old BITs and press out in new directions. This paper details the different approaches of Asian states toward playing more of the role of a “law maker” by focusing on multilateral initiatives (through soft and especially hard law), ASEAN and some key member states, China and the “Belt and Road” initiative, India, Japan, and Korea.

A longer version of this chapter is available at https://ssrn.com/abstract=3544458. That includes an online Appendix and other data or updates on foreign investment, international investment agreements, and investor-state disputes for key states in Asia and Oceania, as well as details on Australia, New Zealand, APEC, and WTO initiatives. For helpful comments or information we thank Jean Ho and Joongi Kim. All URLs were accessed 17 February 2020, unless otherwise noted.

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Notes

  1. 1.

    On the shift from being “rule takers” to “rule makers” in international investment law, at least in some parts of Asia, see generally Nottage L, Chaisse J, Thanitcul S (2018) International investment treaties and arbitration across Asia: a bird’s eye view. In: Nottage L, Chaisse J (eds) International investment treaties and arbitration across Asia. Brill/Nijhoff, pp 1–56. Compare more generally Chesterman S (2016) Asia’s ambivalence about international law and institutions: past, present, and futures. Eur J Int L 27(4):945–978. For further background on individual Asian states, see also Esplugues C (ed) (2019) Foreign investment and investment arbitration in Asia. Intersentia

  2. 2.

    See generally Jetin B, Chaisse J (2018) International investment policy for small states: the case of Brunei. In: Chaisse J, Nottage L (eds) International investment treaties and arbitration across asia. Brill/Nijhoff, pp 384–410

  3. 3.

    ASEAN, Charter of the Association of Southeast Asian Nations, 2008. https://asean.org/storage/2012/05/3.-November-2019-The-ASEAN-Charter-27th-Reprint_rev-2711191.pdf; ASEAN Economic Community (AEC) Blueprint 2015.https://asean.org/wp-content/uploads/archive/5187-10.pdf; ASEAN Economic Community Blueprint 2025. https://asean.org/?static_post=asean-economic-community-blueprint-2025

  4. 4.

    First proposed in 2014 by APEC: see Regional Economic Integration Agenda. https://www.apec.org/About-Us/About-APEC/Fact-Sheets/Regional-Economic-Integration-Agenda.

  5. 5.

    UNCTAD, Investment Policy Hub. https://investmentpolicy.unctad.org/investment-dispute-settlement. See also Friedrich S, Salomon C (2015) Investment arbitration in East Asia and the Pacific. J World Inv Trade 16:800–842 (with a helpful full Annex at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2591186)

  6. 6.

    Treaty between the Federation Republic of Germany and Pakistan for the Promotion and Protection of Investments, signed 25 November 1959, effective 28 April 1962

  7. 7.

    Searched via UNCTAD, supra note 5.

  8. 8.

    Pekkanen SM (2016) Asian designs: governance in the contemporary world order. Cornell University Press

  9. 9.

    APEC, Economic Leaders’ Declaration of Common Resolve, 16 November 1994. https://www.apec.org/Meeting-Papers/Leaders-Declarations/1994/1994_aelm.aspx. For a more detailed discussion, see Bath V, Nottage L (2017) Asian investment and the growth of regional investment agreements. In: Antons C (ed) Routledge handbook of Asian law. Routledge, London, pp 182–199, at 185–187

  10. 10.

    APEC Investment Experts’ Group (2019) APEC seeks to resolve disputes with investors. https://www.apec.org/Press/News-Releases/2019/0225_IEG; APEC Committee on Trade and Investment, Investment Experts Group (2013) https://investmentpolicy.unctad.org/uploaded-files/document/UNCTAD_APEC%20Handbook.pdf

  11. 11.

    Available via http://publications.apec.org/Groups/Committee-on-Trade-and-Investment/Investment-Experts-Group

  12. 12.

    Baliño S, Bernasconi-Osterwalder N (2019) Investment facilitation at the WTO: an attempt to bring a controversial issue into an organization in crisis. Inv Treaty News (27 June 2019). https://www.iisd.org/itn/2019/2006/2027/investment-facilitation-at-the-wto-an-attempt-to-bring-a-controversial-issue-into-an-organization-in-crisis-sofia-balino-nathalie-osterwalder/#_ftn2017

  13. 13.

    United Nations Commission on International Trade Law Working Group III (Investor-State Dispute Settlement Reform), Report of Working Group III (Investor-State Dispute Settlement Reform) on the work of its resumed thirty-eighth session, A/CN.9/1004/Add.1, available at: https://uncitral.un.org/sites/uncitral.un.org/files/report_1004-add1_for_submission_rev_002.pdf

  14. 14.

    See UNCTAD. Working Group III: investor-state dispute settlement reform, 29th session 30 March–3 April, New York, for copies of submissions: https://uncitral.un.org/en/working_groups/3/investor-state

  15. 15.

    ASEAN Comprehensive Investment Agreement between the 10 ASEAN states, signed 26 February 2009, effective 24 February 2012. Four protocols to the Agreements have been signed, but only the first protocol (amending Annex 3) is in force.

  16. 16.

    Agreement on Investment among the governments of the Hong Kong Special Administrative Region of the People’s Republic of China and the member states of the Association of Southeast Asian Nations, signed 12 November 2017; effective 17 June 2019; Agreement of Investment under the Framework Agreement on Comprehensive Economic Cooperation between the Association of Southeast Asian Nations and the Republic of India, signed 12 November 2014, not in force; Agreement of Investment under the Framework Agreement on Comprehensive Economic Cooperation between the People’s Republic of China and the Association of Southeast Asian Nations, signed 15 August 2009, effective 1 January 2010; Agreement of Investment under the Framework Agreement on Comprehensive Economic Cooperation among the Governments of the Member Countries of the Association of Southeast Asian Nations and the Republic of Korea, signed 2 June 2009, effective 1 September 2009; Agreement establishing the ASEAN-Australia-New Zealand Free Trade Area, signed 27 February 2009, effective 10 January 2010; Agreement on Comprehensive Economic Partnership among Japan and Member States of the Association of Southeast Asian Nations, signed 28 March 2008, effective 1 December 2008

  17. 17.

    See summary DFAT (Department of Foreign Affairs and Trade), Regional Comprehensive Economic Partnership. https://dfat.gov.au/trade/agreements/negotiations/rcep/Pages/regional-comprehensive-economic-partnership.aspx

  18. 18.

    Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Viet Nam. Signed 8 March 2018, effective 30 December 2018 for Australia, Canada, Japan, Mexico, New Zealand, and Singapore and 14 January 2019 for Viet Nam. The CPTPP text is available via https://www.dfat.gov.au/trade/agreements/in-force/cptpp/official-documents/Pages/official-documents.

  19. 19.

    Nottage L (2016) The TPP investment chapter and investor-state arbitration in Asia and Oceania: assessing prospects for ratification. Melb J Int L 17:313–348. The major difference in the chapter is the exclusion investment agreements and investment authorizations from the scope of the chapter (particularly the ISDS provision). See CPTPP, Art. 2.

  20. 20.

    DFAT (2019) Comprehensive and progressive agreement for trans-pacific partnership, first CPTPP commission meeting. https://dfat.gov.au/trade/agreements/in-force/cptpp/news/Pages/cptpp-news.aspx

  21. 21.

    Among Canada, Mexico, and the United States, effective 1 January 1994, to be superseded by the United States-Mexico-Canada Agreement. See https://ustr.gov/usmca.

  22. 22.

    Alschner W, Skougarevskiy D (2016) The new gold standard? Empirically situating the TPP in the investment treaty universe. J World Inv Trade 17(3):339–373

  23. 23.

    Australia-US Free Trade Agreement, signed 18 May 2004, effective 1 January 2005, Ch 11, [2005] ATS 1

  24. 24.

    Korea-US Free Trade Agreement, signed 30 June 2007, effective 15 March 2007, Ch 11

  25. 25.

    Free Trade Agreement between the Government of Australia and the Government of the Republic of Korea, signed 8 April 2014, effective 1 January 2015, Ch 11, [2014] ATS 43

  26. 26.

    Singapore-Australia Free Trade Agreement, effective 28 July 2003, amended 24 February 2006, 13 February 2007, 2 September 2011, and 1 December 2017, Ch 8

  27. 27.

    Agreement between Australia and Japan for an Economic Partnership, signed 8 July 2014, effective 15 January 2015, Ch 14, [2015] ATS 2

  28. 28.

    Free Trade Agreement between the Government of Korea and the Government of the Socialist Republic of Viet Nam, signed 5 May 2015, effective 20 December 2015, Ch 9

  29. 29.

    Free Trade Agreement between the Government of the People’s Republic of China and the Government of the Republic of Korea, signed 1 June 2015, effective 20 December 2015, Ch 12

  30. 30.

    Available via https://dfat.gov.au/trade/agreements/in-force/cptpp/official-documents/Pages/official-documents.aspx

  31. 31.

    Nottage L, Ubilava A (2018) Costs, outcomes, and transparency in ISDS arbitrations: evidence for an investment treaty parliamentary inquiry. Int Arb L Rev 21(4):111–117

  32. 32.

    “RCEP Outcomes at a Glance”, via https://dfat.gov.au/trade/agreements/negotiations/rcep/Pages/regional-comprehensive-economic-partnership.aspx

  33. 33.

    See the Table in Nottage L, Jetin B (2021 (forthcoming)) Introduction: new frontiers in Asia-Pacific trade, investment and international business dispute resolution. In: Nottage L, Ali S, Jetin B, Teramura N (eds) New frontiers in Asia-Pacific international arbitration and dispute resolution. Kluwer Law International

  34. 34.

    The ASEAN Declaration (Bangkok Declaration), Bangkok, 8 August 1967. https://asean.org/the-asean-declaration-bangkok-declaration-bangkok-8-august-1967/

  35. 35.

    For more detailed overviews, see Bath V (2013) ASEAN: the liberalization of investment through regional agreements. In: Trakman L, Ranieri N (eds) Regionalism in international investment law. Oxford University Press, pp 182–213 at 182, 183–185; Nottage L, Malbon J, Paterson J, Beaton-Wells C (2019) ASEAN consumer law harmonization and cooperation: achievements and challenges. Cambridge University Press, Chapters 1 and 2

  36. 36.

    ASEAN, ASEAN Economic Community. https://asean.org/asean-economic-community/

  37. 37.

    Endorsed by the AEM and AEC Council on 6 February 2017, updated 14 August 2018. https://asean.org/storage/2012/05/Updated-AEC-2025-CSAP-14-Aug-2018-final.pdf

  38. 38.

    Agreement among the Government of Brunei Darussalam, the Republic of Indonesia, Malaysia, the Republic of the Philippines, the Republic of Singapore, and the Kingdom of Thailand for the Promotion and Protection of Investments, signed 15 December 1987, https://asean.org/?static_post=the-1987-asean-agreement-for-the-promotion-and-protection-of-investments

  39. 39.

    Signed 7 October 1998, https://asean.org/?static_post=framework-agreement-on-the-asean-investment-area-2. The need for a new agreement was highlighted by the decision in Yaung Chi Oo Trading Pte Ltd v Government of the Union of Myanmar (2003) 42 I.L.M. 540, ¶ 82, in which it was held that the two agreements were complementary and could not be read together

  40. 40.

    See generally Chaisse J, Jusoh S (2016) The ASEAN comprehensive investment agreement: the regionalization of laws and policy on foreign investment. Elgar international investment law series. Edward Elgar Publishing

  41. 41.

    Signed 26 August 2014, effective 12 September 2016. See https://cil.nus.edu.sg/databasecil/2014-protocol-to-amend-the-asean-comprehensive-investment-agreement/?id=146.

  42. 42.

    Second Protocol to amend the ASEAN Comprehensive Investment Agreement, 21 September 2017, awaiting notification by Cambodia, will extend nationality to permanent residents and substitutes a “best efforts” requirement for non-WTO members for the earlier requirement to comply with WTO restrictions on performance requirements. The Third Protocol, 20 December 2017, will make a minor change to Thailand’s reservations: http://agreement.asean.org/home/index/7.html.

  43. 43.

    ASEAN (2019) ASEAN economic ministers discuss AEC progress, global economy at retreat, 23 April. https://asean.org/asean-economic-ministers-discuss-aec-progress-global-economy-retreat/.

  44. 44.

    Brunei Darussalam, Schedule of ACIA, Supplement 1. http://investasean.asean.org/files/upload/AIA%2016-06%20Suppl%20Notes%20and%20Revised%20RL%20(BD)%20July%202013.pdf

  45. 45.

    Indonesia, Schedule of ACIA, Supplement 1. http://investasean.asean.org/files/upload/AIA%2016-06%20Suppl%20Notes%20and%20Revised%20RL%20(ID)%20July%202013.pdf

  46. 46.

    See Modality for the Elimination/Improvement of Investment Restrictions and Impediments in ASEAN Member States. http://investasean.asean.org/files/upload/ACIA%20Modality%20%20Public%20Version%20(Final).pdf. On ASEAN’s international treaty provisions (including on services) limiting backtracking on liberalization, see OECD (2019), Investment Policy Review of Southeast Asia, at 47–49, available at https://www.oecd.org/investment/oecd-investment-policy-review-southeast-asia.htm.

  47. 47.

    See the helpful Table 15.1 in Chaisse and Jusoh, supra note 40 at 193 and discussion in Bath, supra note 35 at 202–206.

  48. 48.

    See Bath, ibid., at 205–206; Bath V, Nottage L (2015) The ASEAN Comprehensive Investment Agreement and ‘ASEAN Plus’ – the Australia-New Zealand Free Trade Area (AANZFTA) and the PRC–ASEAN investment agreement. In: Bungenberg M, Griebel J, Hobe S, Reinisch A (eds) International investment law. Hart Publishing, pp 283–303. For ASEAN Free Trade Agreements generally see ASEAN, Free Trade Agreements with Dialogue Partners. https://asean.org/asean-economic-community/free-trade-agreements-with-dialogue-partners/

  49. 49.

    Liew M (2019) What is behind India and ASEAN’s decision to review a 2010 FTA agreement? ASEAN Today, 3 October. https://www.aseantoday.com/2019/2010/what-is-behind-india-and-aseans-decision-to-review-a-2010-fta-agreement/

  50. 50.

    Malaysia’s Free Trade Agreements website, “ASEAN-China: investment,” https://www.aseantoday.com/2019/10/what-is-behind-india-and-aseans-decision-to-review-a-2010-fta-agreement/, reports that the review under the Upgrading ASEAN-China Free Trade Agreement, 22 November 2015, will cover facilitation, investment promotion, integration, and optimization of existing arrangements.

  51. 51.

    See Report of the FTA Joint Committee, “General Review of AANZFTA, Stage One: Review of Implementation 201-2017,” October 2017. https://dfat.gov.au/trade/agreements/in-force/aanzfta/news/Documents/aanzfta-general-review-stage-one-report-october-2017.pdf, Table 6.1 at 32.

  52. 52.

    See Joint Media Statement, The Twenty-Fourth AEM-CER Consultations, 9 September 2019, Thailand. https://dfat.gov.au/trade/agreements/in-force/aanzfta/news/Documents/joint-media-statement-of-the-24th-aem-cer-consultations.pdf.

  53. 53.

    Yaung Chi v Myanmar (supra note 39); Cemex Asia Holdings Ltd v. Indonesia (ICSID Case No. ARB/04/3); Dahlquist J (2019) Boonsom Boonyanit v. Malaysia: rare dispute under terminated ASEAN investment treaty is resolved. Inv Arb Rep (23 June 2019). https://www.iareporter.com

  54. 54.

    See UNCTAD, supra note 5.

  55. 55.

    Available in the longer online version of this chapter, at https://ssrn.com/abstract=3544458

  56. 56.

    UNTS 575 at 159. Entered into force 14 October 1966. For current members, see United Nations Treaty Series Online, Convention on the settlement of investment disputes between States and nationals of other States. https://treaties.un.org/Pages/showDetails.aspx?objid=080000028012a925&clang=_en

  57. 57.

    Nottage L, Thanitcul S (2017) International investment arbitration in Southeast Asia. J World Inv Trade 18(5–6):793–835. A version is also available at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2862272.

  58. 58.

    Amco Asia Corporation and others v. Republic of Indonesia (ICSID Case No. ARB/81/1)

  59. 59.

    Churchill Mining Plc and Planet Mining Pty Ltd, formerly ARB/12/14 v. Republic of Indonesia (ICSID Case No. ARB/12/14 and 12/40). In 2019, an annulment committee upheld the tribunal’s ultimate decision

  60. 60.

    https://investmentpolicy.unctad.org/international-investment-agreements/countries/97/indonesia. The text of the 2018 Indonesia-Singapore BIT is not publicly available, so it cannot be ascertained, for example, whether it includes ISDS and other (CP)TPP-like drafting.

  61. 61.

    UNCTAD, Investment policy hub. https://investmentpolicy.unctad.org/international-investment-agreements/countries/97/indonesia. However, an Australian parliamentary inquiry into ratifying the Australia-Indonesia FTA recommended that Australia follow its usual practice to terminate the BIT when the FTA comes into force. See Nottage L, Ubilava A (2021 forthcoming) Novel, and noteworthy aspects of Australia’s recent investment agreements and ISDS: The CPTPP and agreements with Hong Kong and Indonesia. In: Nottage L, Ali S, Jetin B, Teramura N (eds) New frontiers in Asia-Pacific international arbitration and dispute resolution. Kluwer Law International

  62. 62.

    Panggabean K, Lumempouw R (2019) Indonesia’s investment coordinating board revises divestment requirements. Norton Rose Fulbright (September 2019). https://www.nortonrosefulbright.com/en/knowledge/publications/7d047d087/indonesias-investment-coordinating-board-revises-divestment-requirements

  63. 63.

    Indonesia-Australia Comprehensive Economic Partnership Agreement, concluded 31 August 2018; not yet ratified by Indonesia. See https://dfat.gov.au/trade/agreements/not-yet-in-force/iacepa/iacepa-text/Pages/default.aspx.

  64. 64.

    See further Nottage L, Ubilava A (2021 (forthcoming)) Novel and noteworthy aspects of Australia’s recent investment agreements and ISDS: the CPTPP, Hong Kong, Indonesia and Mauritius transparency treaties. In: Nottage L, Ali S, Jetin B, Teramura N (eds) New frontiers in Asia-Pacific international arbitration and dispute resolution. Kluwer Law International. Also available at https://ssrn.com/abstract=3548358

  65. 65.

    Submission from the Government of Indonesia, A/CN.9/WG.III/WP.156, p4, notes that Indonesia has introduced this mediation procedure in its bilateral IIAs negotiations.

  66. 66.

    Submission from the Government of Thailand, A/CN.9/WG.III/WP.162. https://undocs.org/pdf?symbol=en/A/CN.9/WG.III/WP.162. Some within the Viet Nam government earlier expressed interest in an Advisory Centre especially on a regional basis: Nguyen T, Vu T (2014) Investor-state dispute settlement from the perspective of vietnam, looking for a “post-honeymoon” reform. Transnat Dispute Mgt 1. http://www.transnational-dispute-management.com/article.asp?key=2041

  67. 67.

    Reviewing the history outlined by Poulssen, see Nottage L (2016) Rebalancing investment treaties and investor-state arbitration: two approaches. J World Inv Trade 17:1015–1040

  68. 68.

    Nottage L, Thanitcul S (2017) International investment arbitration in Southeast Asia. J World Inv Trade 18(5–6):793–835. With a longer version at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2862272. For example, Art 11(2) of the BIT with Myanmar (signed in 2008) allows the investor to choose ISDS under UNCITRAL Arbitration Rules or arbitration administered at ICSID if both states are contracting states to the ICSID Convention (inapplicable as Thailand is not, indeed like Myanmar).

  69. 69.

    See, respectively, Art 3(2) of the BIT with Myanmar and Art 5(1) of the BIT with the UAE.

  70. 70.

    Chaisse J (2015) The shifting tectonics of international investment law – structure and dynamics of rules and arbitration on foreign investment in the Asia-Pacific Region. George Wash Int Law Rev 47(3):563–638, at 585

  71. 71.

    Ibid., at 582–583

  72. 72.

    Reed L, Wong K (2015) Evolution of the formal requirements for investment treaty protection of “investments” in Malaysia. KLRCA Newsl 20:17ff

  73. 73.

    Nottage L, Thanitcul S (2017) International investment arbitration in Thailand: limiting contract-based claims while maintaining treaty-based ISDS. J World Inv Trade 18(5–6):767–792

  74. 74.

    Article 10(2) allows the investor to choose arbitration (i) by ICSID under the Convention “if the Centre is available” (arguably inapplicable as long as Thailand does not ratify the Convention), (ii) by ICSID under its Additional Facility Rules if only one BIT party is “signatory to the Convention” (inapplicable because both Thailand in 1985 and UAE in 1981 signed the ICSID Convention), (iii) ad hoc under UNCITRAL Rules (therefore crucially applicable), or (iv) as otherwise agreed by the disputing parties (unlikely after a dispute arises).

  75. 75.

    Dahlquist, supra n 53

    This comparative lack of transparency may be due to Viet Nam being a non-democratic state. An example of

  76. 76.

    Law on Investment, 2014, effective 1 July 2015. English version available at https://investmentpolicy.unctad.org/investment-laws/laws/152/law-on-investment. See Viet Nam – Investment Policy Review – OECD. https://www.oecd.org/countries/vietnam/vietnam-investmentpolicyreview-oecd.htm.

  77. 77.

    See, for example, Viet Nam Law & Legal Forum, “Air transport business requirements relaxed for newcomers,” 11 November 2019. http://vietnamlawmagazine.vn/air-transport-business-requirements-relaxed-for-newcomers-16946.html (cited UNCTAD investment policy hub).

  78. 78.

    See UNCTAD. https://investmentpolicy.unctad.org/international-investment-agreements/countries/229/viet-nam.

  79. 79.

    Ibid. EU – Viet Nam Investment Protection Agreement, signed 30 June 2019, not yet in force

  80. 80.

    https://investmentpolicy.unctad.org/investment-dispute-settlement/country/229/viet-nam.

  81. 81.

    This comparative lack of transparency may be due to Viet Nam being a non-democratic state. An example of potential embarrassment especially to such a regime may be the recent claim outlined in Bohmer L (2019) US national initiates unusual UNCITRAL investment arbitration. Inv Arb Rep (9 September 2019). https://www.iareporter.com/

  82. 82.

    https://investmentpolicy.unctad.org/investment-dispute-settlement/country/229/viet-nam

  83. 83.

    Djanic V (2020) Conoco and Perenco settle BIT case against Viet Nam. Inv Arb Rep (22 January 2020). https://www.iareporter.com/

  84. 84.

    Manh Dzung N, Thi Thu Trang N (2018) International investment dispute resolution in vietnam: opportunities and challenges. In: Nottage L, Chaisse J (eds) International investment treaties and arbitration across asia. Brill/Nijhoff, pp 280–302

  85. 85.

    See, for example, Hepburn J (2019) Taiwan round-up: another claim threatened under Singapore investment treaty; new agreement inked with Viet Nam. Inv Arb Rep (20 December 2019). https://www.iareporter.com/.

  86. 86.

    Mohan M (2018) The European Union’s free trade agreement with singapore – one step forward, 28 steps back? In: Nottage L, Chaisse J (eds) International investment treaties and arbitration across asia. Brill/Nijhoff, pp 180–215

  87. 87.

    Investment Protection Agreement between the European Union and its Member States, of the One Part, and the Republic of Singapore, of the Other Part, signed 15 October 2018, not yet in force.

  88. 88.

    See generally Ho J (2013) Singapore. In: Brown C (ed) Commentaries on selected model investment treaties. Oxford University Press, Oxford.

  89. 89.

    See DFAT, Call for submissions on Malaysia-Australia FTA. https://dfat.gov.au/trade/agreements/in-force/mafta/Pages/call-for-submissions-on-malaysia-australia-fta.aspx.

  90. 90.

    See UNCTAD, https://investmentpolicy.unctad.org/international-investment-agreements/countries/127/malaysia.

  91. 91.

    Malaysian Historical Salvors, SDN, BHD v. Malaysia (ICSID Case No. ARB/05/10)

  92. 92.

    Philippe Gruslin v. Malaysia (I) (ICSID Case No. ARB/94/1) (settled); Philippe Gruslin v. Malaysia (II) (ICSID Case No. ARB/99/3) (decided in favour of State). For all summaries, see https://investmentpolicy.unctad.org/investment-dispute-settlement/cases/37/gruslin-v-malaysia-ii-.

  93. 93.

    MTD Equity Sdn. Bhd. and MTD Chile S.A. v. Chile (ICSID Case No. ARB/01/7)

  94. 94.

    Telekom Malaysia Berhad v. The Republic of Ghana (PCA Case No. 2003-03)

  95. 95.

    KLS Energy Lanka Sdn. Bhd. v. Democratic Socialist Republic of Sri Lanka (ICSID Case No. ARB/18/39)

  96. 96.

    Jusoh S, Faliq Abd Razak M, Azim Mazlan M (2018) Malaysia and investor-state dispute settlement: learning from experience. In: Nottage L, Chaisse J (eds) International investment treaties and arbitration across asia. Brill/Nijhoff, pp 216–242

  97. 97.

    One commentator remarks that “two ISDS cases against Malaysia … occurred during Mahathir Mohamad’s tenure as the fourth Prime Minister of Malaysia and there could be cases during his [current] second tenure. Mahathir Mohamad’s recent statements and comments have created adverse effects on investors’ trust and the potential disputes [from his new government cancelling projects with Chinese investors]] show that Malaysia has not learned from its past experiences.” See Jusoh S, Faliq Abd Razak M (2019) Malaysia’s investor-state dispute settlement experience: a lesson never learned? In: Esplugues C (ed) Foreign investment and investment arbitration in Asia. Intersentia, pp 179–204, at 203

  98. 98.

    See, in particular, Shan W, Gallagher N (2009) Chinese investment treaties: policies and practice. Oxford international arbitration series. Oxford University Press, at 35–43; Congyan C (2009) China-US BIT negotiation and the future of investment treaties regime: a grand bargain with multilateral implications. J Int Econ L 12(2):457–506; Bath V (2015) Chinese companies and outbound investment. In: Toohey L, Picker CB, Greenacre J (eds) China in the international economic order: new directions and changing paradigms. Cambridge University Press, pp 227–244

  99. 99.

    See Shan W, Gallagher N (2009) Chinese investment treaties: policies and practice. Oxford international arbitration series. Oxford University Press; Zhang S (2017) A comparative review of the investor–state arbitration clause in ChAFTA from China’s perspective: moving forwards or sideways? In: Picker CB, Wang H, Zhou W (eds) The China-Australia free trade agreement: a twenty-first-century model. Hart Publishing, pp 237–258, 239–243, for an overview of China’s BITs and ISDS drafting history

  100. 100.

    See UNCTAD. https://investmentpolicy.unctad.org/international-investment-agreements/countries/42/china.

  101. 101.

    See Berger A (2015) Hesitant embrace: China’s recent approach to international investment rule-making. J World Inv Trade 16(5–6):843–868; Ofodile UE (2013) Africa-China bilateral investment treaties: a critique. Mich J Int L 35(1):131–211; Bath V (2018) The south and alternative models of trade and investment regulation. In: Morosini F, Badin MRS (eds) Reconceptualizing international investment law from the global south. Cambridge University Press, pp 1–46

  102. 102.

    Ibid.; and Trakman (2020) Resolving the tension between State sovereignty and liberalizing Investor-State Disputes. Handbook of international law and policy. Springer, pp [ ]

  103. 103.

    Effective 1 January 2020, Art 4. This Article also provides that where a treaty provides that where more favorable treatment is accorded pursuant to a treaty or agreement, those terms will prevail.

  104. 104.

    Free Trade Agreement between the Government of Australia and the Government of the People’s Republic of China, signed 17 June 2015, effective 20 December 2015 [2015] ATS 15

  105. 105.

    Free Trade Agreement between the Government of the People’s Republic of China and the Government of the Republic of Korea, signed 1 June 2015, effective 20 December 2015.

  106. 106.

    See discussion, in Bath V (2017) Substantive provisions in ChaFTA’s investment chapter. In: Picker CB, Wang H, Zhou W (eds) The China-Australia free trade agreement: a twenty-first-century model. Hart Publishing, pp 195–214

  107. 107.

    China signed the ICSID Convention on 9 February 1990, and it came into effect regarding China on 6 February 1993.

  108. 108.

    See also more detailed discussion in Du M, Shen W (2020) The future of investor-state dispute settlement: exploring China’s changing attitude. In: Chaisse J, Choukroune L, Jusoh S (eds) Handbook of international investment law and policy. Springer, pp 1–24

  109. 109.

    Shu Zhang, on the other hand, considers this provision to be a departure from China’s general treaty-making practice; see supra n 111, 254 et seq.

  110. 110.

    Sanum Investments Limited v. Lao People’s Democratic Republic (II) (ICSID Case No. ADHOC/17/1)

  111. 111.

    Sanum Investments Ltd v Government of the Lao People’s Democratic Republic [2016] SGCA 57; Ho J (2018) Case comment. ICSID Rev 33(1):67–73.

  112. 112.

    Note that this case was ultimately decided in favor of the state. See Eric Peterson L (2019) Analysis: in Lao Holdings v. Laos and Sanum v. Laos Awards, arbitrators; see bad faith conduct that should deprive claimants of treaty protection – but claims would fall short anyway. Inv Arb Rep (8 August 2019). https://www.iareporter.com/

  113. 113.

    See UNCTAD. https://investmentpolicy.unctad.org/investment-dispute-settlement/country/42/china. For a more detailed discussion, see Du and Shen, supra note 108.

  114. 114.

    Tza Yap Shum v. Republic of Peru (ICSID Case No. ARB/07/6)

  115. 115.

    In Ping An Life Insurance Company of China, Limited and Ping An Insurance (Group) Company of China, Limited v. Kingdom of Belgium (ICSID Case No. ARB/12/29), the claim fell into the gaps between the old and new Belgium-Luxembourg Economic Union BITs of 1984 and 2005 and failed on jurisdictional grounds.

  116. 116.

    Beijing Urban Construction Group Co. Ltd. v. Republic of Yemen (ICSID Case No. ARB/14/30)

  117. 117.

    Beijing Shougang Mining Investment Company Ltd., China Heilongjiang International Economic & Technical Cooperative Corp., and Qinhuangdaoshi Qinlong International Industrial Co. Ltd. v. Mongolia (PCA Case No. 2010-20)

  118. 118.

    Beijing Shougang Mining Investment Co., Ltd v Mongolia 17 Civ. 7436 (ER) (2019)

  119. 119.

    As China continues to sign Memoranda of Understanding with countries around the world, the number of states theoretically part of the Belt and Road Initiative constantly expands. The Hong Kong Trade and Development Commission Research website provides country profiles for 143 member countries plus China, including a wide range of countries whose engagement with China varies widely. See HKTDC Research. http://china-trade-research.hktdc.com/business-news/article/The-Belt-and-Road-Initiative/The-Belt-and-Road-Initiative-Country-Profiles/obor/en/1/1X3CGF6L/1X0A36I0.htm.

  120. 120.

    See, however, Voon T, Sheargold E (2017) Australia, China, and the co-existence of successive international investment agreements. In: Picker CP, Wang H, Zhou W (eds) The China-Australia free trade agreement: a twenty-first-century model. Hart Publishing, pp 215–236, at 215, arguing that this provision may, in a one-sided fashion, expose Australia to wider liability than merely compensation for expropriation

  121. 121.

    See HKTDC Research, supra note 119.

  122. 122.

    Scissors D (2020) China’s global investment in 2019: going out goes small. American Enterprise Institute (January 2020). https://www.aei.org/wp-content/uploads/2020/2001/Chinas-global-investment-in-2019-2021.pdf

  123. 123.

    See Bath V (2016) “One belt, one road” and Chinese investment. In: Wolff L-C, Chao X (eds) Legal dimensions of China’s belt and road initiative. Wolters Kluwer, pp 165–218

  124. 124.

    Signed 29 July 2015. See UNCTAD. https://investmentpolicy.unctad.org/international-investment-agreements/treaties/bits/3588/china%2D%2D-turkey-bit-2015.

  125. 125.

    See UNCTAD. https://investmentpolicy.unctad.org/international-investment-agreements/countries/42/china?type=bits for list of agreements.

  126. 126.

    Free Trade Agreement between China and Georgia. Signed 13 May 2017.

  127. 127.

    Agreement between the Government of the People’s Republic of China and the Government of the Republic of Georgia concerning the Encouragement and Reciprocal Protection of Investment, signed 3 June 1993, effective 1 March 1995. This contains a very brief ISDS clause providing for ad hoc arbitration, with the tribunal having the right to determine its own procedure and the option to use the ICSID arbitration rules for guidance. Scope is limited to the amount of compensation for expropriation (Art 9).

  128. 128.

    See China FTA Network, China and Maldives Sign the Free Trade Agreement, 8 December 2017. http://fta.mofcom.gov.cn/enarticle/chinamedfen/chinamedfennews/201712/36458_1.html.

  129. 129.

    See http://fta.mofcom.gov.cn/english/index.shtml.

  130. 130.

    UNCITRAL, Working Group III; Investor-State Dispute Settlement Reform, Submission from the Government of China, A/CN.9/WG.III/WP.177, 19 July 2019. https://undocs.org/en/A/CN.9/WG.III/WP.177

  131. 131.

    G20 Guiding Principles for Global Investment Policymaking. http://www.oecd.org/daf/inv/investment-policy/G20-Guiding-Principles-for-Global-Investment-Policymaking.pdf

  132. 132.

    See delegations of Argentina, Australia, and others, Joint Ministerial Statement on Investment Facilitation for Development, WTO docs, WT/MIN (17)/59 (13 December 2017).

  133. 133.

    See China International Commercial Court website. http://cicc.court.gov.cn/html/1/219/index.html; Matthew E (2019) Update on the china international commercial court. OpinioJuris (13 May 2019). http://opiniojuris.org/2019/2005/2013/update-on-the-china-international-commercial-court%ef%bb%bf/

  134. 134.

    Zhongguo Guoji Jingji Maoyi Chongcai Weiyuanhui Guoji Touzi Zhengduan Chongcai Guize (Shixing) [Arbitration Rules of the China Economic and Trade Arbitration Commission on International Investment Disputes (for trial implementation)], Oct 1, 2017 http://www.cietac.org/index.php?m=Article&a=index&id=367. See, most recently, Beijing Arbitration Commission/Beijing International Arbitration Centre, “International Investment Arbitration Rules 2019.”

  135. 135.

    See Zhang Xi, Statement on the making of the Beijing arbitration commission/Beijing international arbitration center international investment arbitration rules 2019, 13 September 2019. http://www.bjac.org.cn/english/news/view?id=3544. A longer Chinese version can be found at http://www.bjac.org.cn/news/view?id=3543.

  136. 136.

    See also generally Chaisse J (2018) China’s international investment policy: formation, evolution, and transformation(s). In: Nottage L, Chaisse J (eds) International investment treaties and arbitration across Asia. Brill/Nijhoff, pp 544–578

  137. 137.

    See, for example, reports available via https://www.pwc.com.au/press-room/2018/japan-opportunities-for-australia.html.

  138. 138.

    Hamamoto S, Nottage L (2010) Foreign investment in and out of Japan: economic backdrop, domestic law, and international treaty-based investor-state dispute resolution. Sydney Law School Research Paper 10/145. http://ssrn.com/abstract=1724999 and https://data.oecd.org/fdi/fdi-stocks.htm

  139. 139.

    Alschner W, Skougarevskiy D (2016) The new gold standard? Empirically situating the TPP in the investment treaty universe. J World Inv Trade 17(3):339–373

  140. 140.

    The following summary of significant substantive provisions in Japanese investment treaties since 2010 is based on Ishikawa T (2018) A Japanese perspective on international investment agreements: recent developments. In: Nottage L, Chaisse J (eds) International investment treaties and arbitration across Asia. Brill/Nijhoff, pp 513–543, at 518–525. For an exhaustive analysis of both substantive and procedural provisions in earlier Japanese treaties, see Hamamoto S, Nottage L (2013) Japan. In: Brown C (ed) Commentaries on selected model investment treaties. Oxford University Press, Oxford, pp 347–391

  141. 141.

    Nottage L (2014) Investor-state arbitration: not in the Australia-Japan free trade agreement and not ever for Australia? J Japan L 38(37–52). For an exhaustive analysis of political developments in Australia, see Nottage L (2017) Investor-state arbitration policy and practice in Australia. In: deMestral A (ed) Second thoughts: investor-state arbitration between developed democracies. Centre for International Governance Innovation, pp 377–330. Also available at https://ssrn.com/abstract=2802450

  142. 142.

    In fact, per capita, US investors bring fewer ISDS claims than say Canadian investors: Nottage L (2016) Are US investors exceptionally litigious with ISDS claims? Kluwer Arbitraion Blog (14 November 2016). http://arbitrationblog.kluwerarbitration.com/2016/2011/2014/are-us-investors-exceptionally-litigious-with-isds-claims/

  143. 143.

    Hamamoto S (2015) Recent anti-ISDS discourse in the Japanese diet: a dressed-up but glaring hypocrisy. J World Inv Trade 16(5–6):931–951

  144. 144.

    Indeed, Japan’s balance on net income from investment roughly equaled its balance on trade in 2001 and exceeded it from 2006: Hamamoto S (2011) A passive player in international investment law: typically Japanese? In: Nottage L, Bath V (eds) Foreign investment and dispute resolution law and practice in Asia. Routledge, pp 53–67, at 54

  145. 145.

    “Action Plan for the Improvement of the Investment Environment Including the Promotion of IIAs” (11 May 2016), cited in Ishikawa T (2018) A Japanese perspective on international investment agreements: recent developments. In: Nottage L, Chaisse J (eds) International investment treaties and arbitration across Asia. Brill/Nijhoff, pp 513–543, at 518. Even counting the investment liberalization commitments in Japan’s FTA with the EU (and hence 27 states), this goal is unlikely to be achieved, but the Action Plan still indicates the scale of Japan’s new ambitions.

  146. 146.

    Reinisch A (2016) The European Union and investor-state dispute settlement: from investor-state arbitration to a permanent investment court. CIGI (Centre for Governance Innovation) Investor-state arbitration series (2). https://www.cigionline.org/sites/default/files/isa_paper_series_no.2.pdf

  147. 147.

    See generally Kim J (2011) The evolution of Korea’s investment treaties and investor-state dispute settlement provisions. In: Bath V, Nottage L (eds) Foreign investment and dispute resolution law and practice in Asia. Routledge, pp 211–224, at 212

  148. 148.

    See, for example, A/CN.9/WG.III/WP.182 – Submission from the governments of Chile, Israel, Japan, Mexico and Peru. See also Japan’s submissions regarding targeted ISDS reforms in response to the Energy Charter Secretariat, suggested policy options regarding the modernization of the ECT (11 July 2019). https://www.euractiv.com/wp-content/uploads/sites/2/2019/07/ECT_room_document_15July2019.pdf.

  149. 149.

    Ishikawa T (2018) A Japanese perspective on international investment agreements: recent developments. In: Nottage L, Chaisse J (eds) International investment treaties and arbitration across Asia. Brill/Nijhoff, pp 513–543, at 524–40. Japan was the largest exporter of FDI in the world in 2018: see UNCTAD (2019) World investment reporter. United Nations, p 7

  150. 150.

    See generally Ubilava A (2020) Amicable settlements in investor-state disputes: empirical analysis of patterns and perceived problems. J World Inv Trade, forthcoming with a version at https://ssrn.com/abstract=3352181

  151. 151.

    Cf Hamamoto S (2011) A passive player in international investment law: typically Japanese? In: Nottage L, Bath V (eds) Foreign investment and dispute resolution law and practice in Asia. Routledge, pp 53–67, at 53–55

  152. 152.

    See also, against the backdrop of claims already against Spain: Hepburn J (2019) Revision of renewable energy contracts raises specter of international arbitration proceedings against India. Inv Arb Rep (29 November 2019). https://www.iareporter.com/

  153. 153.

    See details in Claxton J, Nottage L, Teramura N (2019) Developing Japan as a regional hub for international dispute resolution: dream come true or daydream? J Japan L 47:109–131

  154. 154.

    See generally Nottage L, Weeramantry JR (2012) Investment arbitration in Asia: Five perspectives on law and practice. Arb Int 28(19–62):19–62.

  155. 155.

    See https://data.oecd.org/fdi/fdi-stocks.htm.

  156. 156.

    https://investmentpolicy.unctad.org/international-investment-agreements/countries/111/korea-republic-of

  157. 157.

    Kim Y (2016) Investor-state arbitration in South Korean International trade policies: an uncertain future, trapped by the past. CIGI investor-state arbitration series (15). https://www.cigionline.org/publications/investor-state-arbitration-south-korean-international-tradepolicies-uncertain-future

  158. 158.

    Most remain pending, according to the public UNCTAD database, but Korea prevailed in Jin Hae Seo v. Republic of Korea, HKIAC Case No. HKIAC/18117. Also in 2019, which would generate an eighth inbound claim, a Chinese investor has threatened investment treaty arbitration over the provincial government’s conditions on private hospital on Jeju island: Charlotin D, Hepburn J (2019) Chinese investor threatens claim against Korea. Inv Arb Rep (28 March 2019). https://www.iareporter.com/

  159. 159.

    Via https://investmentpolicy.unctad.org/investment-dispute-settlement

  160. 160.

    Nottage L, Claxton J, Williams B (2020) Mediating Japan-Korea trade and investment tensions. J World Trade, forthcoming, with a longer version at https://ssrn.com/abstract=3497299

  161. 161.

    Indeed, an influential Korean expert has expressed serious doubts about the investment court alternative to ISDS: Lee J (2018) Mending the wound or pulling it apart? New proposals for international investment courts and fragmentation of international investment law. Northwest J Intl L Bus 39(1):1–36

  162. 162.

    Kim J (2018) Korea’s international investment agreements: policy at the contours. In: Nottage L, Chaisse J (eds) International investment treaties and arbitration across asia. Brill/Nijhoff, pp 486–512

  163. 163.

    See generally Doucette J (2017) The occult of personality: Korea’s candlelight protests and the impeachment of Park Geun-Hye. J Asian Stud 76(4):851–860

  164. 164.

    For details, see Kim J (2018) Korea’s international investment agreements: policy at the contours. In: Nottage L, Chaisse J (eds) International investment treaties and arbitration across asia. Brill/Nijhoff, pp 486–512, at 501–511

  165. 165.

    See generally Khambata D, Mehta A (2019) Foreign investment in India: the unfolding legal story. In: C Esplugues (ed) Foreign investment and investment arbitration in Asia. Intersentia.

  166. 166.

    See Singh S (2019) Foreign Direct Investment (FDI) inflows in India: a review. J Gen Mgt Res 6(1):41–53; and https://www.ibef.org/economy/indian-investments-abroad. See also generally Singh J (2021 (forthcoming)) Indian investment treaty and arbitration practice: qualitatively and quantitatively assessing recent developments. In: Nottage L, Ali S, Jetin B, Teramura N (eds) New frontiers in Asia-Pacific international arbitration and dispute resolution. Kluwer Law International

  167. 167.

    However, nor, for example, has Bangladesh, Myanmar, Laos, or (most significantly from an economic perspective) Viet Nam. Thailand has signed but never ratified, as mentioned above. See https://icsid.worldbank.org/en/Pages/icsiddocs/List-of-Member-States.aspx.

  168. 168.

    Ranjan P (2011) “Object and purpose” of Indian international investment agreements: failing to balance investment protection and regulatory power. In: Bath V, Nottage L (eds) Foreign investment and dispute resolution: law and practice in Asia. Routledge, pp 192–210, at 192–201

  169. 169.

    See, for example, Art 14 of the Agreement between the Government of Australia and the Government of the Republic of India on the Promotion and Protection of Investments, [2000] ATS 14, signed 26 February 1999, effective 4 May 2000, terminated by India 23 March 2017.

  170. 170.

    Ibid., Art 4. This did not extend to pre-establishment treatment.

  171. 171.

    Ibid., Art 3

  172. 172.

    Ibid., Art 7

  173. 173.

    Ibid., Art 12

  174. 174.

    See https://investmentpolicy.unctad.org/investment-dispute-settlement/country/96/india. Nine other ISDS cases listed as commenced over 2003–4 involved the Dabhol power plant, and all were settled (including after claims on political risks insurance), so attracted almost no public attention in India. See generally Ranjan P (2019) India and bilateral investment treaties: refusal, acceptance, backlash. Oxford University Press, at 219–266

  175. 175.

    UNCTAD. https://investmentpolicy.unctad.org/international-investment-agreements/countries/96/india

  176. 176.

    See https://investmentpolicy.unctad.org/international-investment-agreements/countries/96/india; and Weeramantry R (2018) International investment law and practice in the Kingdom Of Cambodia: an evolving ‘rule taker’? In: Nottage L, Chaisse J (eds) International investment treaties and arbitration across Asia. Brill/Nijhoff, pp 303–334

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    Ranjan P, Anand P (2018) Investor state dispute settlement in the 2016 Indian model bilateral investment treaty: does it go too far? In: Nottage L, Chaisse J (eds) International investment treaties and arbitration across Asia. Brill/Nijhoff, pp 579–611

  178. 178.

    Investment Cooperation and Facilitation Treaty between the Federative Republic of Brazil and the Republic of India, signed 25 January 2020.

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    Roberts A, John TS (2019) UNCITRAL and ISDS reforms: the divided west and the battle by and for the rest. Beyond the Margins (10 May 2019). https://www.madhyam.org.in/uncitral-and-isds-reforms-the-divided-west-and-the-battle-by-and-for-the-rest/

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    Sathyapalan HK (2017) Indian judiciary and international arbitration: a BIT of a control? Arb Int 33(3):503–518

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    Aragaki HN (2018) Arbitration reform in India: challenges and opportunities. In: Reyes A, Weixia G (eds) The developing world of arbitration: a comparative study of arbitration reform in the Asia-Pacific. Hart Publishing, pp 221–249

  182. 182.

    OECD, supra note 46

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    Hwang M (15–16 September 2019) The Asia-Pacific approach to ISDS reform: shrinking, supplementing, supplanting. Paper presented to the conference on “Multilateral reform of Investor-State Settlement”, Xi’an (on file with the authors)

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Bath, V., Nottage, L. (2020). International Investment Agreements and Investor-State Arbitration in Asia. In: Chaisse, J., Choukroune, L., Jusoh, S. (eds) Handbook of International Investment Law and Policy. Springer, Singapore. https://doi.org/10.1007/978-981-13-5744-2_40-1

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