Exhaustion Of The Application Of Local Remedies In International Investment Law

The principle of exhaustion of local remedies is an ancient international common law rules. Its development process is not plain sailing, but runs smooth. Regularity as revealed in the development of objective things, often in its germination, formation,development, prosperity, decline, alternative, quietly return process. In the early development of international investment, international practices generally follow the exhaustion of local remedies; many international jurists also support the principle. But with the rapid development of international investment, the principle of exhaustion of local remedies meets with stern challenges according to two historical events. In 1965 with the establishment of The International Center for settlement of Investment Disputes and the adoption of The Washington convention, principle of exhaustion of local remedies as an alternative has been greatly weakened. Although according to the Convention on the exhaustion of local remedies and international arbitration can coexist and as a precondition for international arbitration, but after all the practice shows that the host country and the investors rarely choose the exhaustion of local remedies as dispute settlement.The jurisdiction of The International Center for settlement of Investment Disputes is not derived from the contract between the host country and the investor,but is derived from the bilateral investment treaty between the host country and the investor in line with the rise of bilateral investment treaties in the 1880s. International investment disputes resolution center to the jurisdiction of the international status of the fixed by bilateral investment treaty’s extensive practice. The international status of The International Center for settlement of Investment Disputes is fixed by extensive practice of bilateral investment treaties. The principle of exhaustion of local remedies was further laid reduced. The reform and development practice has been carry out in China for 30 years. Our country has been transformed from a capital deficient country into a capital surplus country. And form a capital importing country into capital exporting country. We have gone through three stages according to the policy of our country. Going out is not only a national oriented policy,but also an inevitable choice on the basis of the law of economic development. Capital input and capital output are two kinds of identities. How to deal with the exhaustion of local remedies in the new pattern of "Introduction and going out" is a new key issue. In the capital input,the main investors in China are developed countries. Although China is transforming from a trading big to a trading power,it is still a developing country. Therefore,we must adopt a pragmatic attitude towards the introduction of our country and persist in the exhaustion of local remedies.In the capital output, China’s foreign investment flows to developed countries and developing countries. With the development of The Belt and Road forward, there will be more and more developing countries to cooperate with China. Therefore, in the process of foreign investment, China should cut the dress according to one’s figure about the principle of the exhaustion of local remedies. Insisting on exhaustion of local remedies blindly is neither in line with the interests of our foreign investors nor the strategy of going out.