The Binding Joint Interpretation Mechanism under the Chinese International Investment Law Framework: Recent Developments, Obstacles and Suggestions for Reform

The Investor–State Dispute Settlement (ISDS) system has attracted substantial criticism over the past decade. One major criticism has been the fact that ambiguous language, unclear provisions and unwritten understandings in existing international investment agreements (IIAs) could give rise to costly litigation and open treaty provisions to incorrect interpretations by tribunals. Against this backdrop, an increasing number of states, including mainland China, have adopted the binding joint interpretation (BJI) mechanism as an innovative solution to reassert control over their IIAs and ISDS proceedings. However, China has not adequately applied the BJI mechanism in the ISDS system. This article highlights an immediate concern that China may be concluding IIAs that use a "cookie-cutter" template of BJI provisions way too hastily with minimal negotiation and consultation. This study provides several suggestions for the reform of China's BJI mechanism in its future negotiation of the new type of Chinese IIAs.