Asia-Pacific Journal of Business (아태비즈니스연구)

KNU The Institute of Management & Economy Research (강원대학교 경영경제연구소)
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Study on the Applicability of Most-Favored-Nation clause in Investor-State Dispute Settlement under China's BIT

중국 BIT상 최혜국대우조항의 투자자-국가 간 분쟁해결절차에 적용에 관한 연구

  • Zhang, Man (Department of International Trade, Chonbuk National University) ;
  • Ha, Hyun-Soo (Department of International Trade, Chonbuk National University)
  • 장만 (전북대학교 무역학과) ;
  • 하현수 (전북대학교 무역학과)
  • Received : 2019.02.28
  • Accepted : 2019.03.25
  • Published : 2019.03.30
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Abstract

This paper examines the most-favored-nation treatment clause on the BITs concluded by China and examines the attitudes of China on the application of the most-favored-nation treatment clause to the ISDs by period as the scope of arbitration increases. Moreover, this study pointed out the problems that would be exposed if the most-favored-nation treatment clause applies to ISDs and then also suggested solutions. The conclusions of this study are as follows; if the Chinese government strictly restricts the applicable expansion of the most-favored-nation treatment clause to the dispute settlement procedure by considering only the position of the capital importing country, it implies a contradiction against the development trend of the arbitration system related to international investment disputes. Of course, in order to protect the rights of Chinese investors investing abroad, expanding the applicability of the most-favored-nation treatment clause to the ISDs procedure unconditionally may have a negative impact under China's dual status of being a capital-importing country and a capital-exporting country. Therefore, China should clearly define the scope of application of the most-favored-nation treatment clause, the completion of the local remedy for the host country in cases of BIT to be concluded in the future or amended, and also clearly define that the most-favored-nation treatment clause should not be retroactively applied into BITs already concluded as an exception of applicability of the most-favored-nation treatment.

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