First Page
161
Abstract
Investment treaty arbitration (ITA), like any other dispute resolution regime, must guarantee the quality if its means as well as offering effective sanctioning of its ends. Thus, any obstacle with respect to post-award proceedings should be dealt with seriously. Due to sovereign immunity, the enforcement against an award-debtor State is more difficult than against a private party. Courts in various jurisdictions have battled with sovereign immunity for many years now and many issues remain outstanding nevertheless. It is for these reasons that sovereign immunity from execution has been said to represent “the last fortress, the last bastion of State immunity.” One major challenge has been the plea of sovereign immunity in the international arbitration context – both from enforcement and execution. Courts in the People’s Republic of China (the PRC) and its territories have been part of that struggle. It is the curious position of PRC that this paper deals with. PRC has been an active participant of the rules-based international world order, in general, and ITA in particular. It was, therefore, surprising that China still adhered to the absolute immunity theory. And this despite having signed the United Nations Convention on State Immunity (UNCSI). This changed on 1 September 2023 when the Foreign State Immunity Law of the People’s Republic of China (FSIL) was unveiled. The FSIL entered into force on 1 January 2024. This paper helps explain how PRC has navigated the intersection between international arbitration law and the law of sovereign immunity since becoming an active participant in international economic law. I submit that PRC, first, took a step forward by actively participating in international commerce, trade, and investment and by signing the UNCSI (“One Step Forward”), secondly, PRC took two steps back by negating the UNCSI and actively promoting absolute immunity from enforcement and execution of foreign arbitral awards (“Two Steps Back”), and finally, more recently PRC have taken three steps forward by signing the FSIL that embraces the restrictive theory of immunity from both enforcement and execution of foreign arbitral awards (“Three Steps Forward”).
Recommended Citation
Ylli Dautaj,
Sovereign Immunity and International Arbitration in China:
One Step Forward, Two Steps Back, and Three Steps Forward
Again,
50 Brook. J. Int'l L.
161
(2025).
Available at:
https://brooklynworks.brooklaw.edu/bjil/vol50/iss2/3
