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Professor Mark Feldman Presented in 2023 CIBEL-SIDRA Conference: Dispute Resolution in the Belt Road Initiative

May 31, 2023 CIBEL-SIDRA Conference: Dispute Resolution in the Belt Road Initiative was held online by China International Business and Economic Law (CIBEL) Centre of University of New South Wales. This panel was moderated by Associate Professor Kun Fan of CIBEL Centre, with Professor Mark Feldman participating as one of the five invited presenters.

This panel focuses on the dispute resolution approach under the framework of Belt and Road Initiative (BRI) promoted by China and discusses the potential implications of a China-led international economic order. China’s modes of governance under the BRI reflect some degree of complexity and internal tension. China is both taking an increasingly strong position in existing international governance institutions, as well as finding new ways of governing and influencing through informal mechanisms. In dispute resolution, China also aims to play a more important role, developing a model that offers an alternative to the US-led model through its pragmatic and flexible approach, and the use of law as soft power and informalism. On the other hand, China also appears to be taking a more legalized approach, not only by furthering its participation in established dispute resolution mechanisms but also by building its institutions.

In his presentation, Professor Feldman discussed an opportunity to develop a Beijing-based international investment dispute resolution hub based on two existing institutions, Asian Infrastructure Investment Bank (AIIB) and International Commercial Dispute Prevention and Settlement Organization (ICDPASO), both of which have global membership. This proposal echoes Professor Feldman’s earlier essay, An opportunity to reimagine investment arbitration in Beijing, which is published as part of the Columbia FDI Perspectives series.

As to the connection between the BRI and international dispute resolution, when the initial vision of the BRI was developed in 2015, the role of international dispute resolution in supporting BRI was not addressed. Later, in 2018, China provided guidance on the development of a BRI international commercial dispute resolution mechanism and institutions, focusing on the role of China’s Supreme People’s Court in establishing a China International Commercial Court, with tribunals in Xi’an and Shenzhen. In the opinion, the proposal of a diversified dispute resolution platform, which integrates litigation, arbitration and mediation services, is distinctive.

As to the ICDPASO, it is jointly established by a range of organizations based in many regions as one of the deliverables of the Second Belt and Road Forum for International Cooperation in 2019. As provided in its charter, ICDPASO anticipates that the scope of its work will include a range of international commercial disputes as well as capacity building and education. Surely some of its work would include BRI-related dispute resolution, but would also go beyond the BRI context. Professor Feldman proposed that one way for this new institution to raise awareness of its services is to see whether its form of arbitration might be expressly mentioned in new investment treaties that could be developed. Besides, Professor Feldman pointed out that the ICDPASO does have the potential to add more regional diversity of arbitrators by increasing regional representation from Asia.

Differing from the ICDPASO, which has already focused on dispute resolution, providing intergrated services on mediation and arbitration, the AIIB has not yet moved into the dispute resolution space. But, Professor Feldman addressed, there is potential for the AIIB to move into international investment dispute resolution, including the potential development of some form of instrument that could be modeled in part on the ICSID Convention.

As to the relationship between the AIIB and the BRI, the former finances projects that are both within and outside the jurisdictions that are participating in the BRI. As commented by the AIIB President, Jin Liqun, “We operate by our standards, by our governance. The Belt and Road Initiative is a marvelous program . . . but we have our standards.” Notably, the AIIB also included consideration of potential work in the area of international investment dispute resolution in its 2019 Yearbook of International Law. Compared to the ICSID, Professor Feldman proposed that if the AIIB as a multilateral development bank wants to support international investment dispute resolution, it could – as the World Bank has done - look to create an “atmosphere of mutual confidence” that may encourage investors to engage in a greater level of investment and thereby advance economic development. In terms of mutual confidence, regional representation, especially from Asia, among decision makers may be an important factor.

Professor Feldman also emphasized that one of the limitations of the ICSID is that it imposes no substantive obligations, which is a deliberate strategic choice. One of the opportunities for the AIIB is to be less modest in the sense of developing substantive obligations and instruments, including consideration of issues such as sustainability.

Author: SUN Fanshu

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