Principal locus of regulation of FDI is at the national level
Intl law governing investment issues is limited and, in general, focus on issues of protection of foreign investment from improper host state conduct rather than controls over the conduct of foreign investors or their investment
Int’l legal framework (treaties and CIL) is protective of investors and puts limitations on host state’s ability to regulate foreign investment
What law governs? Depends on what forum will decide the question.
Chinese forum might have different answer than intl arbitral tribunal established pursuant to BIT
Treaties have CoL principles, and can say either follow intl law or follow national law.
If a treaty does not contain CoL principle, and claim is brought before ICSID, there is rule in treaty creating ICSID says national law and applicable principles of intl law.
most intl tribunal say you look at both bodies of law, but if there is conflict intl law governs and if there is a gap intl law fills it
Article 42(1) of the ICSID Convention stipulates that in the absence of an agreement between the parties with respect to the CoL, the tribunal shall apply the law of the host State and such rules of intl law as may be applicable.
See page. 437
Article 33.1 of the UNCITRAL arbitration rules provides that in absence of an agreement of the parties, the arbitral tribunal shall apply the law determined by the CoL rules which it considers applicable.
See page. 437
so if no agreement on CoL, tribunal has to figure out what country’s CoL should be applied, and then apply those CoL rules
that will direct forum to substantive body of law
What is an investment? P. 423
tell me what the forum is, find out CoL, get to substantive body of law, look to definition of investment relevant to this transaction
look at broad definition of investment in US Model BIT on page 413.
