Viewpoint... Chinese investors-host country dispute settlement mediation rules are analyzed.

All kinds of disputes caused by the transnational investment behavior of other countries in the host country are the main forms of international investment disputes. From the main body, it can be divided into disputes between investors and host investors, disputes between investors and host countries and disputes between investor countries and host countries, and this paper mainly explores the more frequent disputes between investors and host countries.

The settlement of international investment disputes mainly depends on the agreement of international investment treaties signed between countries. International investment treaties include multilateral investment treaties, bilateral investment treaties and regional investment treaties. Only the early Washington Convention specifically provided for dispute settlement in international investment disputes.

Mediation as a relief procedure for the settlement of disputes is mainly manifested as follows: the emergence of disputes-the parties choose a third party to intervene in the dispute-the third party listens to the opinions of the parties in accordance with certain standards and procedures, summarizes the focus of the dispute, and puts forward suggestions for settlement-the parties make decisions in accordance with the principle of voluntary legality. [1] In the sense of the modern rule of law, rules are restrictions on autonomy of will, but the soul of mediation lies in freedom and has an "anti-procedural appearance" [2], and while mediation is usually conducive to "open disclosure", it is not an inevitable shortcut to substantive justice. Mediation rules, on the other hand, are standards or principles established by authority and observed; or general standards that prescribe or guide conduct or activity in a particular situation. [3] Therefore, as the carrier of mediation procedure, mediation rules are of great research value, and China can improve the mediation rules in the investor-host country dispute settlement mechanism.

Conciliation rules have a more arbitrary appearance than litigation or arbitration rules, which is determined by consensual, the essential factor of mediation. [4] In conciliation, the conciliator has the flexibility to assist the parties in identifying the dispute, proposing proposals and facilitating a settlement in a variety of ways, without having to follow strict procedural order. Once a mediation agreement is reached, it is often possible to resolve a case quickly.

1. Analysis of the mediation rules in the Washington Convention

For the first time in this convention, the conciliation mechanism is stipulated as one of the ways to settle international investment disputes within the scope of international conventions. Investment disputes between investors of other countries and the government of the investee country in the investee country, there are already a considerable number of bilateral investment protection treaties in the international community to regulate this, that is, the jurisdiction of such disputes to the mutually recognized dispute resolution "center" for processing, the center can conduct mediation or arbitration.

The ICSID Convention also has its mediation rules, namely, the ICSID Convention Mediation Rules (2006) and the ICSID Mediation Additional Facilitation Rules (2006). The two rules are a clarification of the way in which the dispute settlement center applies the mediation rules in the Convention.

In 2011, Malaysia's Yijialan Company registered with the ICSID Secretariat with the Hainan Government of China for a land transfer dispute. The case was settled by settlement (mediation). The case was initiated by the Hainan Provincial Government, which unilaterally recovered the right of Yijialan to develop the land in Wanning City without reasonable compensation. As the land involved in the case is more than 2000 mu and involves international investment, the Chinese side attaches great importance to it, actively carries out consultation with yijialan company, and successfully reached a settlement in the same year. Of course, the reason why Yijialan Company is no longer entangled is that the Hainan government promised to find another 500 mu of land development rights to compensate it. This case is the first case brought against China in ICSID. Yijialan Company quoted the 1995 China-Israel BIT Investor-Host Country Investment Dispute Settlement Clause in accordance with the 1988 China-Malaysia BIT MFN Treatment Clause, which stipulates that investment disputes can be submitted to ICSID for settlement. This case involves issues of jurisdiction and national sovereignty.

2. Analysis of conciliation rules in the Multilateral Investment Guarantee Agency Convention

The rules for the settlement of disputes by conciliation are detailed in article 3 of annex II to the Convention. In the early 1980 s, many developing countries were facing debt crises, which led to frequent international debt disputes due to their inability to repay their debts. In this context, the Multilateral Investment Guarantee Agency Convention came into being. The Convention creatively establishes a system of subrogation claims, which not only exercises the right of subrogation by MIGA, but also indirectly resolves international investment disputes. The Convention stipulates that other disputes between institutions and member states that are not related to interpretation and enforcement must be resolved through negotiation, arbitration and mediation, and expressly stipulates the application of mediation rules. MIGA has played a positive role in promoting the free flow of private capital in China. In 2000, PICC and MIGA signed a cooperation agreement to jointly protect the investment of Chinese investors in other developing countries. In 2006, China Export Credit Insurance Corporation and MIGA signed a memorandum of understanding on comprehensive cooperation to further deepen and regulate the cooperative relationship between the two parties. MIGA has also played a great role in promoting the development of China's investment: first, MIGA provides guarantee for small investment to protect the small international investment behavior of private investors; second, with the improvement of national strength and the support of the "Belt and Road Initiative" initiative, China's foreign direct investment has increased, and MIGA has protected China's foreign direct investment in the sense of international law.

1. Anatomy of conciliation procedures in bilateral investment treaties

Note: On July 29, 2015, China and Turkey signed the Agreement between the Government of the Republic of the People's Republic of China and the Government of the Republic of Turkey on the Reciprocal Promotion and Protection of Investments. The agreement entered into force on November 11, 2020.

2. Application of conciliation rules in bilateral investment treaties

At present, there are 105 bilateral investment agreements in China, of which 12 clearly state that mediation or third party intervention can be sought to resolve disputes. They are China and Uzbekistan, Belgium and Luxembourg, Tanzania, Israel, Turkey, India, Papua New Guinea, Japan, Slovakia, the Netherlands, Russia and Greece, accounting for 11.4 per cent.

Article [7] of the Agreement on the Encouragement and Reciprocal Protection of Investments signed between China and the Greek Government, which entered into force in 1993, provides that disputes between the investor's host country may be submitted to ICSID for settlement through mediation or arbitration, and clearly sets out the application of mediation procedures.

Article 9 of the Agreement on the Promotion and Protection of Investment signed between China and India, which entered into force in 2007, (II) stipulates that if the two parties cannot resolve the dispute through friendly consultation within the period, the dispute may be submitted to judicial, arbitration or With the consent of the parties, administrative agencies can also conduct mediation in accordance with the "United Nations Trade Law Commission Mediation Rules.

Article 12, paragraph 1, of the Agreement with Uzbekistan on the Promotion and Protection of Investments [7], which entered into force in 2011, provides that disputes shall, as far as possible, be resolved through consultations between the parties, including the application of conciliation procedures.

Article 8 of the Agreement on the Promotion and Reciprocal Protection of Investments [8] signed with Israel, which entered into force in 2009, stipulates that if a friendly settlement is not possible, a written request may be made to the Secretary-General of the International Center for Settlement of Investment Disputes to resort to mediation or arbitration proceedings, which can be mediated through the International Center for Settlement of Investment Disputes after the pre-procedure, as well as the bilateral agreement signed with Japan (1989).

Article 13 of the Agreement with the Government of the United Republic of Tanzania on the Promotion and Recitals Protection of Investments [9], which entered into force in 2014, provides that investment disputes between an investor and the territory of another Contracting State shall, as far as possible, be settled through friendly consultations between the parties, including the application of conciliation procedures.

1. Analysis of mediation rules in the China-New Zealand Free Trade Area Agreement

The China-New Zealand Free Trade Agreement [10] between China and New Zealand stipulates that investment disputes between investors and host countries shall be settled amicably as far as possible through consultations between the investor and the other party, and third-party procedures may also be introduced for dispute settlement if both parties to the dispute accept the intervention of third-party procedures. Such non-binding third-party proceedings include conciliation proceedings. This provision, similar to the above-mentioned States of Uzbekistan and Tanzania, places mediation in the context of "friendly consultations" of consultations or negotiations.

2. Analysis of mediation rules in the China-ASEAN Free Trade Area Agreement

The Investment Agreement of the Comprehensive Economic Cooperation Framework Agreement between China and ASEAN is stipulated in the China-ASEAN Free Trade Agreement. In 2015, China and ASEAN reached an outcome document "Protocol" on upgrading negotiations in Beijing, which entered into force in 2016. The Protocol aims to provide a series of guarantees for further cooperation in the field of investment. In order to promote investment facilitation, the two parties have reached a series of consensus on simplifying investment approval procedures, promoting the release of investment-related policies and regulatory information, and establishing a one-stop investment center or related mechanism when necessary, and supporting the provision of business licenses, convenient licensing and consulting for the business community.

Although the rules for the settlement of disputes between parties and investors in the agreement are that the parties involved in the dispute should, as far as possible, resolve the dispute through consultation. If the dispute is not resolved, arbitration may be initiated. There is no direct provision for the application of the mediation rules. However, it is mentioned that the mediation rules of the arbitration institution can be applied after the dispute is submitted to the listed International Center for Settlement of Investment Disputes, UNCITRAL or other arbitration institutions agreed by both parties.

At present, the Trade Law Commission is promoting the reform of investor-state dispute settlement, sorting out a series of problems in the existing system, and China can add its own reasonable propositions or suggestions in the discussion meeting.

First, the mediation procedure can be separated from the arbitration procedure, and the mediation can be separated from the litigation and arbitration. Through separation, it can promote the independent development of mediation, promote the evolution and innovation of mediation rules, form standardized, legal and reasonable mediation rules, play its judicial function, improve the "procedural justice" of mediation, and increase the efficiency of the use of procedures. At the same time, the confidentiality of the mediation procedure can be improved, so that the mediation procedure will not affect the fairness of the litigation or arbitration procedure, and the trial or arbitration tribunal will not make a pre-judgment because of the matters known in the mediation.

Second, mediation can be set as a pre-procedure to save judicial resources. With reference to the "first mediation" system stipulated in articles 122 and 133 of China's Civil Procedure Law, some discretionary issues between investors and the host government regarding investment can be mediated first, and if they can be renegotiated or discussed, there is no need to sue the court or arbitration institution, in order to save time and cost and judicial resources. At the same time, it should be emphasized that whether a dispute can be subject to mediation procedures depends on whether the dispute focus of the dispute has the possibility of mediation, whether the content of the concession can be determined by the subject of the party, and cannot be forced to mediate. "Priority application" does not necessarily apply the conciliation procedure to solve the problem, and care should be taken to avoid excessive promotion of conciliation. At the same time, attention should be paid to the protection of the parties' right to sue. If the dispute has been deadlocked and it is obviously impossible to resolve the dispute through mediation procedures, the procedure should be terminated in time and transferred to other litigation or arbitration procedures.

Third, a standardized and diversified mediator qualification selection system can be constructed. Successful mediators can choose appropriate methods and methods according to their role positioning, use appropriate communication skills, conduct professional mediation, and properly handle the materials and information obtained in mediation, and successfully promote mediation. Such institutional support will provide a stable external environment for mediation, consolidate the basic functions of the mediation link, and reduce the opportunity cost of the mediation mechanism.

Fourth, provide convenience in the system. First, it can demonstrate the effectiveness and implementation possibility of mediation in international investment, and increase the recognition of judicial justice in mediation through continuous improvement of mediation rules. Second, mediation institutions can be set up completely in practice, the composition of mediation rules is perfect, mediators are qualified and authoritative, and mediation with fair and appropriate results can be evaluated and implemented under appropriate conditions, and pilot projects can be carried out, in order to promote the benign development of the mediation system.

After the above analysis, it can be seen that in the BITs signed between China and most countries, the agreement on the settlement of disputes between investors and host countries does not specify the application of mediation rules, but this provision does not exclude investors from using mediation as a means of settlement of investment disputes in practice [11]. The reasons are as follows:

First, there is no explicit restriction in the treaty on the involvement of third parties in disputes, I .e., the use of conciliation procedures to resolve disputes, and there is no fork in the road clause. The fork-in-the-road clause means that the investor may not resort to another procedure after having chosen a domestic or international arbitration procedure when choosing a remedy. The application of the rules of conciliation is not restricted.

Second, most of the BITs signed by our country clearly stipulate the pre-negotiation procedure, and need to go through a certain cooling period, the parties can reach a mediation agreement in the negotiation procedure, as one of the specific ways of negotiation. This relatively expanded interpretation would neither prejudice the conduct of subsequent relief proceedings nor change existing rules. The ability to take full advantage of mediation enhances the likelihood of successful negotiation.

Third, it is true that the BIT specifies that the negotiation procedure includes the application of the mediation procedure, and that mediation is regarded as one of the negotiation procedures, which is feasible under the current legal framework.

To improve the implementation procedure of the mediation rules, we can try to establish a linkage mechanism similar to the arbitration procedure. Since the most thorough convention on investor-host country dispute rules is the Washington Convention, the following points can be drawn from it:(1) Each State party has an obligation of recognition and enforcement. (2) Each Contracting State shall enforce conciliation agreements drawn up by specialized agencies (without national interest) as if they were final judgments of its courts, without undue review and refusal to recognize and enforce them. This would domesticate the agreement by reference to the award, rather than a foreign decision, since, under international practice, a State is not obliged to recognize and enforce a foreign decision.

In order to realize this rule, there are two main points. One is to establish a mediation institution approved by national agreements. In view of its scientific and standardized mediation rules and its process design, consideration can be given to directly granting the enforcement effect of mediation results. The second is to improve the mediation rules, provide scientific basis and institutional guarantee for the mediation procedure, provide a rationalization basis for internal structure, and solve the credibility problem caused by the shortage of mediation causal control logic. Or, for the sake of prudence, adopt an individual review or ex post facto review mechanism similar to arbitration, and in principle, the review is based on formal review and does not involve substantive review, so as to avoid the dispute in fact re-entering substantive proceedings.

For delayed performance or non-performance, the mediation center may establish an investment credit management mechanism. The credit rating is assessed on the basis of the performance of the dispute settlement mediation agreement of each country, and the failure to implement the mediation agreement will reduce its credit rating and notify it internationally, which will become one of the parameters for investors to investigate and evaluate investment projects, or reduce the inflow of international capital to punish the breach of contract.

Mediation is a strategy based on the willingness of the parties to a dispute. Mediation is not only superior in the system, but is gradually being respected by more and more people. Mediation also plays an important role in promoting China's participation in international legal practice. By studying the multilateral agreements, bilateral agreements and free trade area agreements signed by China involving international investment, this paper draws the text of China's mediation rules for international investment disputes, puts forward suggestions for improving the rules of international investment mediation with selective reference to the formulation of commercial mediation rules, and puts forward suggestions for improving the fairness of mediation procedures and the perfection of enforcement rules. The paper further analyzes the feasible path of perfecting the mediation rules in China, and tries to find a feasible way to improve the mediation mechanism under the current legal framework of international investment in China.