Abstract: As the world’s second-largest economy and a major nation in both inbound and outbound investment, China’s judicial stance toward international investment arbitration—used to resolve disputes between investors and host states—has drawn significant attention from legal communities at home and abroad. For a long time, because China adhered to the doctrine of “absolute immunity”, Chinese courts were unable to accept applications for the recognition and enforcement of international investment arbitration awards. Moreover, due to the limited scope of cases permitted under the pre-amendment Arbitration Law of the People’s Republic of China, courts were likewise unable to hear applications to set aside such awards. With the Foreign State Immunity Law of the People’s Republic of China taking effect on 1 January 2024, China has shifted to a“restrictive immunity” approach. Although this law is not the foundational legislation governing judicial review of international investment arbitration—and China has long been bound by its treaty obligations under the Washington Convention—the adoption of restrictive immunity will undoubtedly exert substantive influence on China’s judicial review of investment arbitration. The newly revised Arbitration Law introduces provisions related to international investment arbitration, providing a domestic legal basis for Chinese courts to conduct judicial review in this field. These legislative developments have prompted China’s international law community to re-examine China’s previous stance on judicial review of investment arbitration. Seizing this moment, China should promptly implement a series of rule-of-law measures—such as designating a judicial review authority for ICSID awards, adjusting the “commercial” scope defined at the time of China’s accession to the New York Convention, and formulating judicial interpretations and specialized procedural rules under the Arbitration Law. Through these steps, China can establish a new position and build a judicial review system of international investment arbitration with Chinese characteristics.

Keywords: International Investment Arbitration, Judicial Review, State Immunity Law, Arbitration Law, Washington Convention, New York Convention

 

Author: Liu Jingdong, research fellow, CASS Institute of International Law; doctoral supervisor, Law School of the University of CASS; vice chairman, China Society of Arbitration Law;

Source: 2 (2027) Chinese Review of International Law.