DRIVING GROWTH
Shared values leading the way on the Belt and Road
This should be the beginning of a busy year for Wang Guiguo. This year he wants his idea of building a modern legal structure for China’s new-age Silk Road initiatives to come to pass.
Wang, who is the president of the Hong Kong-based International Academy of the Belt and Road, and is a professor of international law in Beijing, Hangzhou and New Orleans in the United States, published a book in October — about the dispute resolution mechanism for the new Silk Road initiatives proposed and led by China.
The new Silk Road project, which cover both the Silk Road Economic Belt and the 21st Century Maritime Silk Road, is called the Belt and Road Initiative.
This year, beginning with US President Donald Trump withdrawing the US from the 12-nation trade deal Trans-Pacific Partnership, the need is becoming more acute, Wang said, for China to work with other countries to structure their own free trade systems and related legal mechanisms.
“In fact, how to build a fair, all-round and workable dispute resolution system for international trade and investment is a common task for governments and legal professionals,” Wang said.
Whether or not the US or any other country stays in or leaves a free trade pact won’t affect the need, he said.
“Globalization is not going to stop,” Wang said.
That is also why ideas such as international dispute settlement and international dispute tribunals are more often heard from judicial forums in Europe, he said.
Since 2013, after the Belt and Road Initiative was proposed by President Xi Jinping, China has signed partnership agreements with some 40 countries in the world.
Overall, the Belt and Road Initiative covers 60 percent of the world population and onethird of the global GDP (around $2 trillion). For the past decade or so, it has shown the fastest growth of all regions.
Owing to their diverse legal systems and practices, the implementation of the Belt and Road-related agreements will inevitably give rise to many issues in the governing of trade and cross-border investment, Wang said.
Last year, upon the publishing of the book that he edited, with contributions from more than 40 legal experts from different countries, Wang’s academy also held a forum in Hong Kong.
An official from the Supreme People’s Court of China spoke at the forum and declared support from the central government to Hong Kong to become a regional dispute settlement center.
Wang argued that the now defunct TPP, although it did contain some words on disputes between investors and their host nations’ governments, “was actually less perfect a dispute resolution model than it was branded”.
None of the dispute resolution mechanisms available in the world today is perfect, he said. Most importantly, they are incomplete in terms of appeal, compensation, or mediation and reconciliation in cross-border investment disputes and rulings.
They have a lack of efficiency and accommodation of the digital technology, he added, “in such things as an online tribunal, for example”.
Now with its new Belt and Road Initiative, China should work with its partners to develop a dispute resolution mechanism to better incorporate common law foundation and some “Eastern values” in practice, those about dispute mediation and reconciliation in particular, Wang stressed.
In the meantime, China and partners in its Belt and Road Initiative will be open to adopt the useful experience from other dispute resolution designs in the world.
Wang said he hoped to see an effort to build up a comprehensive, unified arbitration mechanism that works also well with the civil law system, which most Belt and Road nations are familiar with.
“Unlike trade disputes, which can be settled in a unified mechanism of the World Trade Organization, investment disputes are handled differently by different tribunals, even in similar cases,” Wang said.
The International Center for Settlement of Investment Disputes is a product of the Washington Convention on the Settlement of Investment Disputes of 1965. It deals with disputes between states and nationals, especially corporate entities from other states. But it doesn’t have an appeal system.
“Developing countries would need a court of appeal to ensure the fairness of the rulings,” he said.
Investment disputes are handled differently by different tribunals ...” Wang Guiguo, president of the Hong Kong-based International Academy of the Belt and Road