The Application Of Denial Of Benefits Clause In International Investment Treaty

Denial of benefits clause origins from Friendship Commerce Navigation Treaty concluded by United States on the ground of denial of diplomatic protection. However, the content of this foresaid clause has been perfected as the international investor tends to be various and complex in the condition of prosperous of international investment. Therefore, denial of benefit clause, which is treated as the supplementary interpretation of nationality of investor, aims at revealing the real nationality of investor in dispute and protecting such unqualified investor from obtaining benefits of the treaty.Obviously, denial of benefits clause will protects the contracting parties’s national benefits potentially without putting limitation to the foreign investor actively. And taking this advantage into consideration, this clause has obtained great development and has been accepted by more and more countries, including China. Recent years, China has adopted this clause in several investment treaties. There is not doubt that denial of (?) clause will be widely used in international investment treaties.However, it still exists issues on application of this clause. Actually, there is nearly no concentration on this clause until several international arbitration cases in these years caused discussion by professionals. And it shows this clause has some issues on application for the reason that the content is ambiguous, including interpretation of the terms, how to exercise right of denial of benefits and so on.Therefore, this study tries to analysis and explain those foresaid issues refer to related international investment treaties and arbitration cases, hoping to draw some reference to perfection of this clause while China choose to use it in futural contracting work. Based on this consideration, the author has taken methods of empirical analysis, historical analysis, and comparative analysis to discuss the issue. First, the background and of purpose of this study have been explained in introduction. Second, in the Chapter one, it has stated the concept of denial of benefits, for what purpose the terms is established and this terms’s development history. In Chapter Two, it, based on the arbitrational cases, focuses on analyzing issues of applying this terms; In Chapter Three, according to the discussion by the forementioned content, it provides advice about how to perfect the terms in the future in our country’s international investment treaties. At last, it makes a primary conclusion of this study.