Study On Round-tripping Investment In Investment Arbitration

Round-tripping case is a special category of cases in the jurisdiction of international investment tribunals.Round-tripping investment often has obvious instrumental characteristics,and investors often use it to circumvent the regulations of the host country.Which even use arbitration to influence ongoing domestic judicial activities and interfere the economic planning of the host country.The phenomenon of Round-tripping investment will not only undermine the order of market competition order,harmful to the healthy development of the host country’s domestic economy,but also useless for the orderly development of the international investment environment.In the case of Round-tripping investment,investors often submit purely domestic disputes to international arbitration tribunals,which seriously undermines the rights of the host country.In practice,the lack of consistency and predictability in the jurisdictional decisions of investment tribunals on Round-tripping investment cases has been greatly questioned in the international community.In order to expand the jurisdiction,some tribunals have made unreasonable awards in disregard of the facts of the cases,which resulting in shell companies controlled by nationals of host country obtaining numerous benefits under the investment treaty.In the long run,these will seriously affect the legitimacy and legality of the investment arbitration mechanism,and cause irreparable damage to the international investment field.However,in the context of fragmentation of international investment law,tribunals cannot easily and accurately apply the law to make the correct determination of jurisdiction.The study in this paper seeks to sort out the legal provisions and relevant theories on the determination of nationality of corporate investors.Which attempts to clarify the relationship between the application of domestic law and international law.And intend to provide recommendations to the tribunals on how to accurately apply the law and make consistent and predictable decisions.This paper is divided into four main parts:Chapter 1 introduces the definition of eligible investors and the treaty shopping in the international investment system,then describe the Round-tripping investment besides causes of this phenomenon,as well as the problems arising after such investors resort to arbitration;Chapter 2 focuses on the nationality standards apply on identification of corporate investors in various legal sources and the application of different standards.Then turn to discusses the application of law in jurisdictional decisions,clarify the hierarchy between the priority application of domestic law and international law;Chapter 3 introduces four typical cases of Round-tripping investments in investment arbitration at first,to draw out the introduction of theories in arbitration practice,such as the "foreign control"element,the piercing the corporate veil regime and so on.Then turn to point out the problems existing in the application of these theories,furthermore to analyze how these theories should be applied by host countries in order to effectively block unreasonable arbitration claims by Round-tripping investors.Chapter 4 integrates the discussion in the first three chapters to proposes some improvements on the applicable law in the practice for tribunals and host countries,as well as suggestions for improvements for host countries and China in terms of legislation and investment access.