• Journal of Arbitration Studies
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• v.34 no.2
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• pp.27-44
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• 2024

The lack of consistency and predictability of arbitral awards in the Investor-State Dispute Settlement ("ISDS") mechanism has long been a subject of criticism. In international investment disputes, arbitral tribunals have frequently come up with different interpretations and results on similar investment agreement provisions. The arbitral tribunal's inconsistent decisions raised concerns not only among the parties to the investment dispute but also amongthe arbitral tribunals in other cases, which ultimately led to legal inconsistencies in international investment law. Arbitration awards may have some degree of disagreement in interpretation. However, the systemic inconsistencies that pervade ISDS risk undermining the purpose of the investment agreement system, which is to provide a predictable and stable framework to protect andpromote foreign investment while maintaining a balance with host state regulations. Therefore, this study proposes a plan to resolve this discrepancy and review standards for practical application. Reform of the ISDS mechanism could be a viable option to reduce, to some extent, the inconsistencies in interpretation, if not completely eliminate them. Reforms such as establishingguidelines, promoting cooperation between arbitral tribunals, and codifying the norms of the agreement can provide a means of reducing interpretive inconsistencies and strengthening the legitimacy of the ISDS mechanism. Reforming the ISDS mechanism will require all stakeholders to carefully consider the issues and the scope, nature, and feasibility of eachpotential reform.

• The Journal of Asian Finance, Economics and Business
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• v.7 no.2
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• pp.157-168
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• 2020

Since the economic crisis sweeps across the world in 2008, the foreign direct investment of various countries has been greatly impacted. Therefore, this paper regards China as an example to analyze China's outward foreign direct investment patterns in terms of Asian financial markets with a panel data over the period 2003-2017. We mainly focus on the money market oriented outward foreign direct investment and foreign exchange market oriented outward foreign direct investment. Using the individual fixed effect model to conduct empirical analyses, the empirical findings indicate that China will reduce its foreign direct investment amount to a country with large money supply and China will increase its foreign direct investment amount to a country with large foreign exchange reserves. Furthermore, when a country has signed Free Trade Agreement with China, China will increase more foreign direct investment amount to these countries than that of a country who has not signed Free Trade Agreement with China. Moreover, the empirical findings indicate that no matter what the money market oriented outward foreign direct investment or foreign market oriented outward foreign direct investment, China will reduce its foreign direct investment amount to these Asian countries due to the global economic crisis.

• Journal of Arbitration Studies
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• v.26 no.3
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• pp.175-230
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• 2016

The controversies that have surrounded the negotiation of both the Comprehensive Economic and Trade Agreement (CETA) and the Transatlantic Trade and Investment Partnership (TTIP) have underlined the difficulties arising out from the adoption of a truly common EU investment policy. Non-governmental organizations have called into question transparency and legitimacy of international investment arbitration during the negotiations. The article presents a reflection about current developments of the EU investment policy addressing, in particular, the criticisms towards the whole investor-to-State system and the EU's efforts in developing a "tailor-made" investment agreement and Investor-to-State Dispute resolution system. Along these lines, the article critically assesses the recently announced proposal for the establishment of an 'Investment Court System' put forward by the EU during the TTIP negotiations.

• Journal of Arbitration Studies
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• v.33 no.2
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• pp.53-83
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• 2023

The investment agreement prepared at the beginning of inter-Korean economic cooperation in 2000 can be evaluated as very ineffective as a product of mutual political and diplomatic compromise rather than an effective protection for our investment assets. South Korean companies suffered a lot of losses due to the freezing of assets in the Geumgang mountain district and the closure of the Kaeseung Industrial Complex, but they did not receive practical damage relief due to institutional vulnerabilities. Currently, North Korea is under international economic sanctions of the UN Security Council, so it is true that the resumption of inter-Korean economic cooperation is far away, but North Korea's human resources and geographical location are still attractive investment destinations for us. Therefore, if strained relations between the two Koreas recover in the future and international economic sanctions on North Korea are eased, Korean companies' investment in North Korea will resume. However, the previous inter-Korean investment agreement system was a fictional systemthat was ineffective. Therefore, if these safety devices are not reorganized when economic cooperation resumes, unfair damage to Korean companies will be repeated again. The core of the improved investment guarantee system is not a bilateral system between the two Koreas, but the establishment of a multilateral system through North Korea's inclusion in the international economy. Specifically, it includes encouraging North Korea to join international agreements for the execution of arbitration decisions, securing subrogation rights through membership of international insurance groups such as MIGA, creating matching funds by international financial organizations. Through this new approach, it will be possible to improve the safety of Korean companies' investment in North Korea, and ultimately, it will be necessary to lay the foundation for mutual development through economic cooperation between the two Koreas.

• Journal of Arbitration Studies
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• v.29 no.2
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• pp.3-34
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• 2019

The resumption of economic cooperation between South and the North Korea will be a new growth engine for our economy. Many Korean companies are preparing to invest in North Korea in accordance with the progress of inter-Korean relations. However, there are many risks inherent in inter-Korean economic cooperation, as experienced in previous cases. Specifically, one should be prepared for unfair measures such as the expropriation of investment assets of South Korean enterprises by North Korea authorities. Therefore, it is essential to review the protection measures of investment in North Korea and to review the investment dispute settlement system. The South and the North have an agreement to establish the inter-Korean Commercial Arbitration Committee to resolve the disputes that may arise if one party's investments are lost due to inappropriate or unfair measures due to the other party's authority. However, the Investment Agreement, which governs the Inter-Korean Commercial Arbitration Committee, contains a number of declarative statements that are somewhat ineffective. Even today, nearly 20 years after the adoption of the Agreement, the specific detailed procedures have shown no real progress, such as in the enactment of arbitration rules. Therefore, at present, it is difficult to expect a system that can effectively address the damage of our corporations which have invested in North Korea. When the assets freeze after the suspension of Kumgang tourism and the closure of the Kaeseung Industrial Complex by North Korea, the activation of the inter-Korean Commercial Arbitration Committee is the most important prerequisite for economic cooperation with North Korea. For this purpose, the resolution of disputes through the Inter-Korean Commercial Arbitration Committee has to be made more concrete, with the effectiveness of the dispute settlement system enhanced by means of various efforts.

• Journal of Arbitration Studies
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• v.18 no.2
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• pp.149-171
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• 2008

The purpose of this paper is to examine the Measures against Risks in International Investment Agreement: focusing on Umbrella Clause and MIGA. Umbrella Clauses have become a regular feature of international investment agreements and have been included to provide additional protection to investors by covering the contractual obligations in investment agreements between host countries and foreign investors. The meaning of umbrella clauses is one of the most controversial issues with which international arbitral tribunals have been recently confronted with while adjudicating investment disputes brought before them MIGA issues guarantees against non-commercial risks for investments, such as: currency transfer restrictions, expropriations, war and civil disturbances and breach of contract by host governments, and the case that the investor obtains an arbitration award or judical decision for damages and is unable to enforce it after a specified period. Furthermore, MIGA undertakes a wide range of mediation activities designed to remove obstacles to the flow of foreign direct investment in its developing member countries.

• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.68
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• pp.89-121
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• 2015

Investor-State Dispute Settlement(ISDS) grants a foreign investor the right to access an international arbitrator, if he believes actions taken by a host government are in breach of commitments made in an investment agreement or an investment treaty. The arbitration procedure of ICSID is made specifically to resolve investment disputes, so most of investment disputes have been settled in accordance with the procedure. Owing to limitation of dispute settlements through the ICSID arbitration procedure, several investment dispute conciliation schemes have been emerged as alternatives. In the case of a conciliation, the conciliation procedure will be in progress based on arbitrary agreement between parties, and if both parties agree on a conciliation program, then the arbitrary execution rate is relatively higher than that of arbitration procedures. In addition, it is evaluated that the time duration of conducting a conciliation procedure is in general rather short in 8 to 24months, and its incumbent cost is also rather inexpensive. Most of all, through amicable settlement of a dispute between a foreign investor and a host state, the foreign investor may continue his investment activities without a hitch, while the host state may invite more investment without any risk of losing its external credibility. In conclusion, it is desirable to lead any investment dispute between a foreign investor and a host state settle in accordance with the dispute settlement procedure as specified in the relevant investment agreement. In addition, to make the foreign investor continue his investment activities, it will be necessary to provide a separate investment dispute conciliation system aside from such arbitration procedures to cope any unexpected incident flexibly.

• Journal of Arbitration Studies
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• v.27 no.1
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• pp.131-160
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• 2017

When any investment dispute arises, the investor has to exhaust the local remedies available in the host state, and according to the agreement between the parties, the investor is filed to the ICSID arbitral tribunal to seek arbitral awards. At this time, if the arbitral tribunal decides that the investment agreement has been violated, it normally demands the host state to provide financial compensations to the investor for economic loss. According to the rules of the investment agreement, the host state is supposed to fulfill the arbitral awards voluntarily. If it is unwilling to provide financial compensations according to the arbitral awards, however, the investor may ask the domestic court of the host state for the recognition and enforcement of arbitral awards. In addition, if the host state is unwilling to fulfill arbitral awards on account of state immunity, the investor may ask his own country (state of nationality) for diplomatic protection and urge it to demand the fulfillment of arbitral awards. Effectiveness for pecuniary damages, a means to solve problems arising in the enforcement of investment arbitral awards, is found to be rather ineffective. For such cases, this study suggests an alternative to demand either a restitution of property or a corrections of violated measures subject to arbitral awards.

• Journal of Arbitration Studies
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• v.13 no.2
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• pp.123-156
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• 2004

Settlement of investment disputes is quite different from that of commercial disputes arising from ordinary commercial transactions in view of disputing parties, applicable laws and rules, etc.. Therefore, it is very important to consider the Convention on the Settlement of Investment Disputes between States and Nationals of Other States(Washington Convention) of 1965. The creation of the International Centre for Settlement of Investment Disputes(ICSID), which was established under the Washington Convention, was the belief that an institution specially designed to facilitate the settlement of investment disputes between governments and foreign investors could help to promote increased flows of international investment. Pursuant to the Washington Convention, ICSID provides facilities for the conciliation and arbitration of disputes between member countries and investors who qualify as nationals of other member countries. Recourse to ICSID conciliation and arbitration is entirely voluntary. However, once the parties have consented to arbitration under the Washington Convention, neither can unilaterally withdraw its consent. Moreover, all Contracting States of the Washington Convention are required by the Convention to recognize and enforce ICSID arbitral awards. Provisions on ICSID arbitration are commonly found in investment contracts between governments of member countries and investors from other member countries. Advance consents by governments to submit investment disputes to ICSID arbitration can also be found in many bilateral investment treaties including the Korea-China Agreement on the Encouragement and Reciprocal Protection of Investments(1992), the Korea-Japan Agreement for the Liberalization, Promotion and Protection of Investment(2003) and the Korea-Chile FTA, the latter was signed as of February 15, 2003 and is still pending in the National Assembly for its ratification. Arbitration under the auspices of ICSID is similarly one of the main mechanism for the settlement of investment disputes under the bilateral treaties on investment. Therefore, it is a problem of vital importance that Korean parties interested in investment to foreign countries should understand and cope with the settlement mechanism of investment disputes under the Washington Convention and bilateral investment treaties.

• Journal of Arbitration Studies
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• v.20 no.1
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• pp.109-131
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• 2010

Investment Agreement is to be a part of FTA, as negotiating together both trade and investment. For example, it has a separate chapter about investment in KORUS FTA contract and is more detailed and inclusive than BIT contents which are traditional investment provisions. It is called to the investment norm of FT A. The investment agreement lures a foreign investment by providing the environment which is stable to the foreign investors. Hence, it plans in goal for the economic development of the home country. In international investment, the arbitration award cases are coming out to be divided into two parts applying MFN provisions in investor protective principles and dispute resolution process; the tendency of broad interpretation and the tendency of limited interpretation. In the case of RosInvest Co UK Ltd v. the Russian Federation awarded in 2007, the arbitration tribunal interprets that the application scope of MFN provisions contain the more lucrative dispute provision than other BITs without limitations in entity right of the investor. This judgment is the same view as arbitration tribunal position of Maffezini case. The arbitration tribunal of Plama case has kept out an assertion magnifying the arbitration tribunal's jurisdiction. That is, for applying more inclusive investor-nation resolution method from different treaty, tribunal mentioned that MFN provision had to see clearly a point of applying the investor-nation dispute resolution method. Dispute resolution process providing inclusive MFN provision has both the tendency of broad interpretation and the tendency of limited interpretation. It needs ceaselessly to do the monitoring about cases of arbitration award. In conclusion, the point where MFN provisions are applied conclusively is recognized, but it is still controversial whether or not to magnify the jurisdiction of arbitration tribunal applying MFN provisions. Therefore, it does not exist clear principle in the theory or in the award eases about the application scope for entity protection provision of MFN. Hence, The Korean government of Korea and local autonomous entities needs to keep their eyes on the trend of the international arbitration award cases in relation to the investment dispute for the future. Also, Korean government or local self-governing group must consider MFN provisions when they make a contract of international investment treaty such as writing concretely the application of MFN provisions from KORUS FTA.