ISDS Mechanism Reform Differences And Bridging

After experiencing a transition from "political international investment disputes" to "managerial international investment disputes," it is indicated that the nature of disputes at the center of international investment has changed.Investment arbitration,as a legal means of resolution,has been favored by both states and investors,and the vast majority of international investment agreements have incorporated the ISDS mechanism.However,as international economic and trade cooperation and arbitration practices have deepened,the shortcomings of the ISDS mechanism have continued to emerge,with some developing countries gradually withdrawing from the Washington Convention or even directly giving up the investor-state dispute settlement mechanism.Some developed countries such as Australia,Germany,and the EU have also openly expressed their distrust and restrictions on the ISDS mechanism.Under the surging criticism,the international community is actively promoting reforms of the ISDS mechanism.The international investment dispute resolution center is carrying out large-scale revisions of its arbitration rules,and the UN Commission on International Trade Law has established a third working group to actively promote multilateral reform.Currently,three mainstream reform models have emerged internationally-US improvementism,EU judicialization reform,and Brazil’s CFIA model.There are obvious differences between the three types of reforms,as well as mutual learning,and the parallel development of different reform paths has exacerbated the fragmentation and centrifugation of the international investment law system.Since China’s reform and opening up,it has become an indispensable player in the international economic and trade field,both in terms of capital input and output.However,it still faces challenges such as limited international arbitration experience,weak international investment discourse,the urgent need to improve domestic rule of law,and the need to update international investment agreements.Compared to the previous policies that actively protected and promoted capital circulation,how to reserve policy space for host countries and how to avoid measures taken by governments to enhance the rule of law have become the focus of investors,becoming increasingly critical.The current fragmented and diversified state of ISDS reform is both an opportunity and a challenge for China.We cannot stand idly by and copy the models of other countries,but should actively participate in the multilateral reform process.In 2019,the Chinese government submitted a "Position Paper on Possible Reforms of the System for Investor-State Dispute Settlement" to the third working group of the UN Commission on International Trade Law,clarifying China’s attitude and position,modifying specific rules on the basis of maintaining the investment arbitration mechanism,and establishing a permanent appellate mechanism.The Chinese proposal addresses the shortcomings of the current ISDS mechanism and considers the interests and needs of different countries,choosing a path between improvementism and revolutionism with the potential to be accepted by different factions.Based on this,using the "Belt and Road" platform as a basis,a path of "investment arbitration + multilateral permanent appellate mechanism" is constructed,and multiple dispute resolution measures are introduced to strive to eliminate the differences between different paths,providing an opportunity for China to overtake in the ISDS reform curve.