The First French BIT

Journal Article The Future of Investment Arbitration by Catherine A. Rogers and Roger P. Alford Get access The Future of Investment ArbitrationbyRogers Catherine A. and Alford Roger P.. Published by ITA-ASIL and Oxford University Press ( 2009). Ruth Teitelbaum Ruth Teitelbaum Search for other works by this author on: Oxford Academic Google Scholar Arbitration International, Volume 26, Issue 1, 1 March 2010, Pages 187–190, https://doi.org/10.1093/arbitration/26.1.187 Published: 01 September 2014

As an important legal document signed between two countries to promote and protect investment, bilateral investment treaties play an important role in bilateral international investment. This paper intends to answer the following questions: What is the impact of bilateral investment treaties on Chinese companies’ overseas mergers and acquisitions（M&A）? What is the impact mechanism? How should Chinese companies take advantage of the effect of bilateral investment treaties on overseas M&A, so as to expand the scale and scope of overseas M&A while promoting the success of M&A?Based on the progressive difference-in-difference model, this paper delves into the theoretical mechanism and impact of bilateral investment treaties on Chinese companies’ overseas M&A by using bilateral investment treaties as a quasi-natural experiment with the country panel data of 140 countries from 2004 to 2018. It comes to the following conclusions: Firstly, compared with countries that have not signed bilateral investment treaties, bilateral investment treaties have a significant positive effect on Chinese companies’ willingness to acquire overseas and successful M&A. Secondly, in terms of dynamic effects, bilateral investment treaties have a long-term effect on the promotion of Chinese companies’ overseas M&A, and their volatility has increased. Thirdly, the promotion effect of bilateral investment treaties is significantly heterogeneous. The promotion effect of bilateral investment treaties is more significant in Asia and Africa, stronger in high-quality countries and developed countries, and stronger in non-state-owned companies. Fourthly, the expansibility test shows that the quality of the text of bilateral investment treaties have a significant promoting effect on China’s overseas M&A. Fifthly, through the decomposition and quantification of the specific provisions of investment treaties, “Definition and Scope of Investment”“Fair and Equitable Treatment” and “Most Favored Nation Treatment” are the key provisions that affect the promotion of China’s overseas M&A in bilateral investment treaties. This paper enriches the research theory in the field of bilateral investment treaties and overseas M&A relations, provides policy revelations for Chinese companies’ overseas M&A and the new round of bilateral investment treaty practices, and contributes Chinese wisdom to global economic governance.In short, this paper contributes to the existing research in the following three perspectives: Firstly, it specifically examines the impact of bilateral investment treaties on the number of Chinese companies’ M&A cases and successful M&A cases in a more in-depth way. Secondly, it uses bilateral investment treaties as a quasi-natural experiment, and conducts an empirical research based on the progressive difference-in-difference model. It also explores the impact of the text quality of investment treaties, and examines the internal mechanism of bilateral investment treaties from the dimensions of investment definition and scope, fair and equitable treatment, national treatment, most-favored-nation treatment, expropriation compensation, umbrellas, and investment dispute settlement based on the specific terms of investment treaties. Lastly, it lays an important empirical foundation for deepening bilateral investment treaties and promoting overseas M&A by Chinese companies, as well as for building a scientific and reasonable bilateral investment treaty system and promoting the formation of a new pattern of comprehensive opening.

Today there are more than 2,500 bilateral investment treaties (BITs) around the world. Most of these investment protection treaties offer foreign investors a direct cause of action to claim damages against host-states before international arbitral tribunals. This procedure, together with the requirement of compensation in indirect expropriations and the fair and equitable treatment standard, have transformed the way we think about state liability in international law. We live in the BIT generation, a world where BITs define the scope and conditions according to which states are economically accountable for the consequences of regulatory change and administrative action. Investment arbitration in the BIT generation carries new functions which pose unprecedented normative challenges, such as the arbitral bodies established to resolve investor/state disputes defining the relationship between property rights and the public interest. They also review state action for arbitrariness, and define the proper tests under which that review should proceed. State Liability in Investment Treaty Arbitration is an interdisciplinary work, aimed at academics and practitioners, which focuses on five key dimensions of BIT arbitration. First, it analyses the past practice of state responsibility for injuries to aliens, placing the BIT generation in historical perspective. Second, it develops a descriptive law-and-economics model that explains the proliferation of BITs, and why they are all worded so similarly. Third, it addresses the legitimacy deficits of this new form of dispute settlement, weighing its potential advantages and democratic shortfalls. Fourth, it gives a comparative overview of the universal tension between property rights and the public interest, and the problems and challenges associated with liability grounded in illegal and arbitrary state action. Finally, it presents a detailed legal study of the current state of BIT jurisprudence regarding indirect expropriations and the fair and equitable treatment clause.

한·일 및 한·중·일 투자협정의 투자자-국가 분쟁해결제도 연구：국내법원판결에 관한 판정례를 중심으로 (A Study on Investor-State Dispute Settlement System of the Korea-Japan and the Korea-China-Japan Investment Treaty: Denial of Justice in Cases)

This study explores the implementation of the concepts of control by the host state and protection for foreign investment by analyzing the dispute between Oleovest Pte. Ltd. and the Government of Indonesia, alongside a comparative analysis of the 2005 and 2018 Indonesia–Singapore Bilateral Investment Treaties (BITs). The core focus lies in the legal and policy tension between the state’s sovereign right to regulate its domestic affairs for public interest and its obligation to provide legal protection and guarantees to foreign investors. This tension is especially significant in investment treaty arbitration, where claims of unfair treatment or indirect expropriation must be balanced against the host state's regulatory authority. The Oleovest case exemplifies this dynamic, with allegations of breaches of fair and equitable treatment (FET) and indirect expropriation raised by the investor, while Indonesia asserts its right to regulate in pursuit of national development and public welfare. The changes between the 2005 and 2018 BITs reflect Indonesia’s evolving approach to balancing investor protection with regulatory autonomy, shifting from broad protections toward clearer exceptions that emphasize the host state’s right to regulate. This study underscores the importance of developing clearer legal frameworks that support both foreign investor confidence and state sovereignty, ensuring that investment treaties remain fair, balanced, and aligned with sustainable development goals.

Statess Reassertion of Control Over International Investment Law - (Re)Defining Fair and Equitable Treatmentt and Indirect Expropriationn

A. Setting the Scene Over the past fifty years, States have signed and ratified more than 3,300 investment treaties – either in the form of bilateral investment treaties (BITs) or free trade agreements (FTAs) with an investment protection chapter. With the exception of the very early BITs (e.g. the Germany–Pakistan BIT of 1959 and the Netherlands–Cameroon BIT of 1966) and the famous US–Australia FTA (which entered into force in 2005), most of the more than 3,300 existing investment treaties contain some form of dispute settlement rules, usually including investor-State dispute settlement (ISDS). By signing and ratifying investment treaties, States have consciously consented to the possibility that investors could bring a claim against them. Apparently, there was and is consensus that concluding investment treaties is beneficial for both Contracting Parties. In fact, States continue to negotiate, sign and ratify investment treaties. Indeed, recent studies show that after ratification of a BIT, foreign direct investment (FDI) flows increase on average by about 30 per cent. However, as the United Nations Conference on Trade and Development (UNCTAD) and the European Commission repeatedly have noted, it cannot be denied that an increasing uneasiness is felt within States, governments, parliaments and certain non-governmental organisations (NGOs) about ISDS and investment treaties. The public debate, though based largely on misperceptions and misrepresentations, has triggered a drive to reform the current ISDS system. In this context, it is important to note that this drive to reform is not limited to Europe but is also taking place in some of the BRICS (Brazil, Russia, India, China and South Africa) countries. For example, Brazil has concluded BITs on the basis of a new model text which does not include ISDS. India has recently published its new Model BIT, which departs significantly from the current ISDS system. Also, South Africa has moved away from ‘old school’ BITs by terminating many of them with EU Member States and replacing them with a new domestic investment law. More recently, within the context of the Transatlantic Trade and Investment Partnership (TTIP) negotiation, the European Commission has proposed the creation of an Investment Court System (ICS) that would create a semi-permanent two-tier court system, which would constitute a significant departure from the existing ISDS system. Indeed, the FTA between Canada and the European Union (Comprehensive Economic and Trade Agreement (CETA)) already contains the ICS proposal.

Submission to Australian Government Department of Foreign Affairs and Trade Review of Australia’s Bilateral Investment Treaties

Since China and the European Union (EU) announced their decision to negotiate a bilateral investment treaty (BIT) at the 14th China–EU Summit in February 2012,3 the two sides have engaged in two rounds of negotiations.4 As the first standalone BIT that the EU has attempted to negotiate and a treaty between two of the world’s largest economies, the China–EU BIT is bound to occupy a unique place in the world history of BIT negotiations.5 This note attempts to assess the key issues that are likely to be involved in the negotiations of the BIT and its global implications. It concludes that, while there are many tough issues to tackle in the negotiations, a successful China–EU BIT is likely to become a symbol for the emerging ‘Global BIT 2.0’.6 Although there are currently BIT arrangements between China and all but one Member State of the EU, the China–EU BIT negotiations would involve far more work than simply consolidating or streamlining ‘the existing BITs between China and the EU Member States into a single and coherent text’.7 Indeed, it can be expected that the two sides will seize this opportunity to update and upgrade their investment treaty arrangements, taking into account the recent world investment treaty practices in general and those of the two sides in particular.

The state-led-economy provisions in the U.S. model BIT, which was released in April 2012, aims to impose strict regulations on the SOEs and exert great influence on state-led economy model. China and the U.S. are now in the midst of negotiating a BIT, and the U.S. government insists on negotiating on the basis of its 2012 model BIT. If China is to accept the 2012 U.S. model for the proposed BIT between the two nations, unprecedented international obligations will be placed in the field of international investment. In this context, in order to provide a reference for the BIT negotiation, the author will analyze, from the perspective of normative jurisprudence, which economic activities are included in the scope of state-led economy provisions, whether China should accept the clauses and the possible impact of accepting it. China’s economy has indivisible relationship with State-owned enterprises (SOEs). At present, most of these SOEs have clustered in those sectors that play crucial roles in the national economy such as energy, telecommunication and finances. Despite several rounds of reform on the SOEs aiming at a separation of governmental functions from corporate management, and a modern market-oriented governance structure, Chinese SOEs remain monopolies or de facto monopolies with exclusive access to many important industries relevant to national economy and people’s livelihood. Further, SOEs can enjoy a lot of privileges in their operation, some even have certain regulatory authority which is supposed to be exercised by the government. This kind of economic model is called State-led economy. The 2012 U.S. model for bilateral investment treaties (BIT) is characterized by the inclusion of the state-led economy provisions, which means that there are more restrictive regulations governing SOEs and their special treatment, and countervailing their competition implication in the host country and their home country. Apart from creating a fair and impartial environment for the investors, this international investment regime, represented by 2012 U.S. BIT model, is in some way, intended to alter the host country’s economic governance regime. In accordance with the decision of the 5th round of the U.S.–China Strategic and Economic Dialogue, both parties are dedicated to proceeding the BIT negotiations (The 5th Round of the U.S.–China Strategic and Economic Dialogue: broad consensus achieved and positive progress made, People’s Daily, p 3, 2013). The U.S. government has insisted that they would base its 2012 model as a blueprint of BIT text negotiation. Seemingly to illustrate, the 6th round of the U.S.–China Strategic and Economic Dialogue has reached a consensus that an earlier launch of negotiation on the negative list will be expected in 2015 (The 6th Round of the U.S.–China Strategic and Economic Dialogue: broad consensus achieved and positive progress made, People’s Daily, p 3, 2014; Ministry of Commerce of the People’s Republic of China, The 14th Round of the U.S.–China Investment Treaty Negotiation is Held in Washington, D.C., 2014). If China is to accept the new BIT model, it will bring China a bundle of increasing obligations under this system and an unprecedented impact on China’s mode for economic development. As a contracting party, China will have to carry out a comprehensively economic reform to comply with the disciplines specified in the BIT. It is also understandable that the incorporation of the state-led economy provision in the China–U.S. BIT will in turn accelerate the domestic economic reforms. In this context, research on the issue of state-led economy in the BIT negotiation will be of significance to China’s dealing with the core issue in the BIT, China’s fulfillment of treaty obligations and its promotion of domestic economic reform via BIT negotiations. In order to provide a reference for the BIT negotiation, the author will identify from the perspective of normative jurisprudence, the economic activities that fall within the scope of state-led economy provisions, project the possible impact of state-led economy provisions and how China should handle negotiation surrounding the state-led economy issue.

Like other bilateral investment treaties (BITs), Chinese BITs establish a set of general standards of treatment accorded to foreign investors by the host state. The most commonly found general standards of treatment include fair and equitable treatment (FET), (full) protection and security (PNS), most favoured nation treatment (MFN), and national treatment (NT). The first two belong to the group of non-contingent standards (or so-called “absolute standard of treatment”), whilst the latter two are forms of contingent standards (or “relative standards of treatment”). Absolute standards do not depend on treatment granted to other investors. In contrast, the relative standards are contingent on treatment given to other categories of investors, nationals of the host state in the case of NT and investors from third states for the MFN. This chapter begins with an examination of the FET standard, focusing on the different approaches of interpretations that have been developed in theory and in arbitration practice. It then analyzes the standard under Chinese BITs and assesses the implications of its standard format and any variations.

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Encyclopedia entry on fair and equitable treatment. Fair and equitable treatment is a legal term of art well known in the field of foreign investment protection. It is a rule of considerable practical importance in dispute settlement on the basis of investment treaties. Judging from publicly available awards, this is the obligation that investment treaty tribunals are most likely to find to have been breached. However, despite its pedigree and importance, the textual formulation of ‘fair and equitable treatment’ is not an example of excessive clarity regarding the legal criteria to be applied to resolving particular disputes. International law has addressed this challenge in two ways: by identifying particular elements (‘standards’) of fair and equitable treatment through jurisprudence constante of decisions in international investment arbitration; and by recent treaty-making that elaborates elements that are present (and sometimes also not present) as part of fair and equitable treatment.