For example, there is high-profile foreign investment in the South China Sea (SCS) with major threats of increasing escalation between SCS countries. Specifically, it anchors claims to island groups in the SCS and any maritime rights created. However, when states include a definition of territory in a BIT, they are unlikely to include maritime areas (12/16, indicating a 75% chance, compared to 4/16, 25%).
Therefore, maritime or foreign investments in the SCS may fall within the territorial scope of the BITs concluded by coastal states.
CLASSIFICATION ACCORDING TO THE STATUS OF THE DISPUTE
JOINT DEVELOPMENT AREAS (JDA)
In 2009, Malaysia and Vietnam made a joint submission to the CLCS50 on their extended continental shelf claims under Article 76 UNCLOS. This was referred to as a broad understanding of the division of the respective area by the Malaysian Prime Minister.51 As a result, China and the Philippines issued notes verbales against this submission.52 This study only examined investments in unregulated areas that the potential investor - state affairs in the SCS.
CLASSIFICATION ACCORDING TO THE DISPUTE CONTENT
OVERLAP OF MARITIME CLAIMS
Low Water Status (LTE): According to Article 10 UNCLOS, an island must be above water at high tide. In contrast, a naturally formed area of land above and surrounded by water at low tide but submerged at high tide is an LTE. It may only measure the breadth of territorial waters (Art. 11) or draw straight baselines in certain circumstances (Art. 7(4) UNCLOS).
Disputes over the determination of baselines: Maritime rights may be further claimed when a coastal state draws baselines in violation of UNCLOS or CIL. This is often the case with the misuse of straight baselines (joining selected points with a straight line, instead of taking the low water line along the coast), which is only allowed under certain conditions under Art 7 UNCLOS. After ratifying UNCLOS, China submitted a declaration announcing the use of straight baselines to measure the territorial sea from its mainland and the Paracels.59.
INVESTMENTS IN DISPUTED MARITIME AREAS OF THE SCS AS ‘PROTECTED INVESTMENTS’?
A QUESTION OF JURISDICTION RATIONE LOCI OR RATIONE MATERIAE
In line with this, The Philippines argued in the PCA case that the Gaven Reef and McKennan Reef were LTEs, which the tribunal qualified as rocks.58. The definition of territory in the BITs survey included the maritime zones as established under international law, with some BITs expressly referring to UNCLOS. An exception to this is the UK-China BIT, which only refers to areas over which sovereignty, sovereign rights or jurisdiction is exercised without reference to international law. 62 However, BITs often include an applicable law clause that considers rules of international law , as in the Greece-Vietnam BIT.63 When such clauses are absent in BITs, which provide for ICSID arbitration, Article 42 (1) ICSID Convention allows international law to be applied.
When an investment is made in the territory of the host state, it indicates consent to allow the courts to consider the territorial scope of the BIT by applying international law. However, the Court must decide on matters of maritime sovereignty over which it does not have prima facie jurisdiction, to which States would probably not have consented.64 The next section deals with the Courts' inherent self-imposed limitations on their jurisdiction when dealing with such renvoi clauses. .
THE NATURE OF APPLICABLE LAW CLAUSES AND
The jurisdiction of the investment court is given to decide on the international legal responsibility of host states. Therefore, reliance on rules of international law is permitted, especially where a question of that obligation is governed by international law.69 When interpreting a treaty, Article 31(3) (c) VCLT requires any relevant rules of international law applicable in relations between the parties to be examined. This provision is embodied in the clinical isolation maintained by the WTO Appellate Body on the relationship between the WTO and general international law.70 In the Oil Platforms case, the ICJ took an integral approach as interpreting the treaty71 taking into account the rules for the use of relevant force. on the interpretation of the US-Iran Friendship Treaty.
When applying Article 31(3)(c) of the VCLT, the UNCLOS rules of customary law of the sea applicable to the assessment of disputed sea areas are not related to the host state and the claimant's home state. Rather, they apply between the host state and the protesting state that is not a party to the BIT. In addition, the parties to the BIT agree that their territory is defined on the basis of international law.
This could be an implicit understanding between states' economic relations to refrain from creating an investment environment that is contrary to international law because of the potential political risk.
THE JURISDICTIONAL CONSTRAINTS ON RENVOI CLAUSES IN BITS
THE PROBLEM OF IMPLICATED ISSUES
The court's decision on whether the investment was made in disputed areas that are "in accordance with international law" would still require a preliminary determination. This decision concerns interstate maritime disputes, which are not proportionate to the court's mandate to resolve investment disputes. 74. The problem of the external issues involved may be necessary or incidental.75 Complex issue is necessary when the court cannot exercise jurisdiction over the internal issue.
This would require the determination of an extraneous matter over which the court cannot exercise jurisdiction. Moreover, the complex issue is incidental when the court can exercise jurisdiction over the extraneous matter. Although this is outside the jurisdiction of the court, it makes such determinations because it is related to the internal dispute of the case. 76.
80 Dispute on the rights of coastal states in the Black Sea, the Sea of Azov and the Kerch Strait (Ukraine v. Russian Federation), case PCA no. Even with a return that allows courts to apply the rules of international law in relation to a maritime issue, it does not automatically confirm their jurisdiction over such issues.84 This is because the decision of an investment court on maritime sovereignty or rights would be an act of an inherently ultra vires nature. Therefore, de lege lata, the reference to international law in the territorial scope of the BIT, is not proportionate to the court's jurisdiction ratione materiae.
INVESTMENT TRIBUNALS’ “INCIDENTAL JURISDICTION” OVER DISPUTED MARITIME AREAS
They could eschew jurisdiction over maritime litigation issues where the internal issue of said ICJ/PCA proceeding is stronger than in an investment dispute. However, there are important policy arguments for the establishment of incidental tribunal jurisdiction over disputed maritime areas, as explored in the next section. The host country and the foreign investor took a mutually calculated risk by investing in disputed areas of the SCS.
Therefore, it would not object to a tribunal's lack of territorial jurisdiction, as this would undermine its naval claim.91 The most notable challenges were raised by the International Court of Justice in the Wall Advisory Opinion and Armed Activity on the Territory of Congo.92 Moreover, the same reasoning could be followed to effectively protect investments in disputed maritime areas. 88 Jarrod Hepburn and Ridhi Kabra, “Investigation: Further Russia Investment Treaty Decisions Uncovered, Taking Broader Window into Arbitrators' Approaches to Crimea Controversy”, Investment Arbitration Reporter, 17 November 2017, accessed 31 May 2018, www.iareporter.com/articles / explore-further-Russia-investment-treaty-decisions-discovered-offer-wider-window-to-arbitrators-approaches-of-Crimea-controversy/.
89 Damien Charlotin, “Russia Fails to Set Aside Two Crimea-Related Awards at Swiss Seat,” Investment Arbitration Reporter, December 17, 2019, accessed May 31, 2018, https://www.iareporter.com/Articles/. 90 Damien Charlotin, “Crimea-Related 1 Billion USD Award Against Russia Set aside as Paris Court Finds Tribunal Lacked Jurisdiction,” Investment Arbitration Reporter, 30 May 2021, https://www. 92 Legal Consequences of the Construction of a Wall in the Occupied Palestinian Territory, Advisory Opinion, ICJ Reports 2004, para.
THE PROTESTING STATE AS AN INDISPENSABLE PARTY TO THE INVESTOR-(HOST)-STATE DISPUTE?
THE MONETARY GOLD PRINCIPLE
CONCLUSION
The study adopted the current international legal framework for foreign investment in disputed maritime areas for investment in the South China Sea. This renunciation of the rules of international law requires tribunals to decide proprio motu on their jurisdiction. Foreign investment and the status of Kosovo in international law.” The Journal of World Investment & Trade 10, no.
Submarine Cables and Pipelines: Investor Protection under International Law.” Journal of World Investment and Trade. On Territoriality and International Investment Law: The Application of China's Investment Treaties to Hong Kong and Macao.” Michigan Journal of International Law 37, no. Safeguarding Offshore Energy Investments: The Bright Sides of Regime Interaction.” Journal of World Investment and Trade.
The Necessity of Transboundary Maritime Governance: Conflict Prevention Strategies.” Indonesian Journal of International Law 15, no. Fragmentation and Consolidation and the Future Relationship between International Investment Law and General International Law.” In Investment Law within International Law: Integrationist Perspectives, edited by Freya Baetens, 482-493. Litigation concerning coastal state rights in the Black Sea, the Sea of Azov and the Kerch Strait (Ukraine v. Russian Federation), PCA case no. 2017-06, Ruling on Preliminary Objections (Feb. 21, 2020).
Natuna chief urges Australia to invest, says Chinese aid not welcome.” The Sydney Morning Herald, June 26, 2020. The Philippines is restarting oil and gas exploration in the South China Sea.” Financial Times, October 18, 2020.
SURVEY OF “COASTAL STATE - SCS COASTAL STATE”
BruneiChinaIndonesiaMalaysiaPhilippinesVietnam ArgentinaNo BITArt 1(5): cat4Art 1(4): with respect to the territory of Argentina: cat 4; with regard to Indonesia'. Brunei, China, Indonesia, Malaysia, Philippines, Vietnam, GermanyArt 1(2): cat1, ca12No definition of territory, but in the protocol to BIT, Ad Art 2: explicit reference to inclusion of cat1, cat2. No definition of territory No definition of territory No definition of territory No definition of territory. inclusion of cat1, cat2.
Art 1(4): in respect of India's "territory" cat1, cat2, ref to UNCLOS; with respect to the "territory" of Indonesia refer to its domestic law. Art 1(1)(f): in respect of India's territory cat1, cat2, refer to UNCLOS but for Malaysia's territory only "land territory and territorial waters". Art 1(6): in respect of the territory of India cat1, cat2, cf. UNCLOS, cf. Constitution of the Philippines.
BruneiChinaIndonesiaMalaysiaPhilippinesVietnam MoroccoNo BITArt 1(4): cat3, cat4Art I (5): pertaining to the “territory” of Morocco: cat3; with regard to Indonesia': reference to national law. Art 1(1)(d): in relation to the territory of Morocco cat3, but for the territory of Malaysia only "land area and territorial sea". Art 1(4): in relation to the territory of Saudi Arabia cat4, but for the territory of Malaysia only "land area and territorial sea".
No BITNo BITNo definition of territory South KoreaArt 1(2): cat4No definition of territoryArt 1(6): cat2,cat4,Art 1(e): in relation to South Korea's territory cat4, but to Malaysia's territory, only "land territory and the territorial sea". BruneiChinaIndonesia Malaysia The Philippines Vietnam SpainNo BITArt 1(4): cat1, cat2Art I(4): respecting Spain's territory cat1, cat2,: respecting Indonesia: cat 4 refers to UNCLOS.
