Brazil’s New Model of Dispute Settlement for Investment: Return to the Past or Alternative for the Future?

Abstract

This article assesses the contribution of Brazil’s new bilateral treaties on investment, labelled Cooperation and Investment Facilitation Agreements (CIFAs), to the international legal framework for transnational investment. With its CIFAs, nine of which were concluded since 2015, Brazil offers an innovative model of International Investment Agreement (IIA) which does not contain investor-state dispute settlement (ISDS). Instead, CIFAs establish a system that combines dispute prevention mechanisms, creating institutions to ensure continued communication and foster cooperation, and state-to-state arbitration (inspired by dispute settlement provisions common in trade agreements and codified in the World Trade Organization’s Dispute Settlement Understanding). Like recent initiatives put forward by India and the European Union, CIFAs aim not only to regulate bilateral relations but also to positively influence the current debates relating to the reform of the international investment regime. Whether they will become an alternative to the current ISDS-dominated framework will be determined by practice.

China’s Stance on Investor-State Dispute Settlement: Evolution, Challenges, and Reform Options

“…152 Agarwal (2019), p. 11.153 India Model BIT (2015), Art. 15.154 Vidigal and Stevens (2018), p. 485. 155 UNCITRAL Working Group III, Possible Reform of Investor-State Dispute Settlement (ISDS): Submission from the Government of Brazil, A/CN.9/WG.III/WP.171 (11 June 2019), available at: https :// undoc s.org/en/A/CN.9/WG.III/WP.171 (accessed 23 September 2020).156 They include the use of dispute prevention policies, the use of alternative dispute resolution such as conciliation and mediation, the use of domestic courts and domestic administrative review procedures, setting up an ombuds office, state-state cooperation in dispute prevention, and the banning of, or otherwise more transparent, third-party funding.…”

The Future of Investor-State Dispute Settlement: Exploring China’s Changing Attitude

“…If dispute persists, then pre-agreed state-to-state arbitration will come into play. 111 Finally, in view of the problems identified, China makes it clear that it supports a multilateral and flexible approach to ISDS reform. In particular, China has made 6 specific reform options.…”

The Future of Investor-State Dispute Settlement: Exploring China’s Changing Attitude

“…If dispute persists, then pre-agreed state-to-state arbitration will come into play. 111 South Africa terminated most BITs and permit foreign investors to sue in domestic courts or bring mediation claims against the host government. If dispute cannot be resolved, South Africa may later consent to state-to-state arbitration.…”

“…The tribunal further found that "the assertion that 'the Chinese State is the ultimate decision maker' for BUCG is too remote from the facts of the Sana'a International Airport project to be relevant". 42 In the case of China Heilongjiang International Economic & Technical Cooperative Corp. v. Mongolia , the claimants asserted that they are "qualifying investors" under Article 1(2) of the BIT because they are "economic entities" that are "established and domiciled in the territory of the PRC in accordance with the PRC's laws". 43 In denying Beijing Shougang and China Heilongjiang are "agencies" of the Chinese government or exercise "any element of governmental authority", 44 the claimants made an emphasis on the fact that the BIT does not exclude SOEs from qualifying as investors.…”