CHAPTER 3 INVESTOR-STATE DISPUTE SETTLEMENT PROVISIONS
3.3 Taiwan as Signatory Party to BITs
Dispute the hampered ability to freely conclude BITs with other countries by Taiwan’s status vis-à-vis China, Taiwan managed to establish take part in the BIT
185 BITs signed between China and other States, available at
http://www.kluwerarbitration.com/BITs.aspx?country=China (last visited Dec.11, 2012).
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trend.186 Distinguishing investment-related agreements on purpose of signatory, the ones that Taiwan signed can be divided into two categories. The first kind aims to promote investment cooperation187 and the second to protect investment (see Table 5).188 As of August 2012, Taiwan, since the “Agreement Dealing with Guaranty of American Investment of Private Capital in Taiwan” in 1952,189 has concluded 29 BITs with other Parties as listed in Table 5.
The latest BIT signed is the one between Taiwan and Japan [hereinafter Taiwan-Japan BIA] on September 22, 2011 and entered into force on Jan. 20, 2012.190 Similar to Cross-Strait BIA which is not signed by government officials by the Parties, Taiwan-Japan BIA was signed by Taiwan’s Association of East Asian Relations and Japan’s Interchange Association.191 Signatory to Taiwan-Japan BIA is significant not only in expanding Taiwan’s role and involvement in international economy,192 but also
186 Stephan Wilske, Protection of Taiwanese Investor Under Third Party Bilateral Investment Treaties —Ways, Means and Limits of “Treaty Shopping”—, 4(2) CONTEMP.ASIAN ARB.J. 145, 148 (2011).
187 A list of such agreements is available at http://www.dois.moea.gov.tw/asp/relation1_3_2.asp (last visited Feb. 8, 2013).
188 See MOEA, ANNOTATIONS ON INTERNATIONAL AGREEMENTS 16 (2012) (in Chinese).
189 Full text in Chinese is available at
http://www.laws.taipei.gov.tw/taipei/lawsystem/lawshowall02.jsp?LawID=A040050080012900-1952062 5&RealID= (last visited Feb. 9, 2013).
190 Full text of “Arrangement between the Association of East Asian Relations and the Interchange Association for the Mutual Cooperation on the Liberalization, Promotion and Protection of Investment,”
available at http://www.moea.gov.tw/TJI/main/content/ContentLink.aspx?menu_id=3613 (last visited Feb.
8, 2013).
191 TAX-News, Taiwan Ratifies Investment Agreement With Japan (Nov. 25, 2011),
http://www.tax-news.com/news/Taiwan_Ratifies_Investment_Agreement_With_Japan____52667.html (last visited Feb. 8, 2013).
192 Economic Connotation of Investment Agreement between Taiwan and Japan [Tai Ri Tou Zi Xie Yi De Jing Ji Yi Han], http://www.npf.org.tw/post/1/9723 (last visited Feb. 8, 2013).
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in granting most-favored-nation treatment to each other’s investors.193
Contracting Parties Date Of Signature Entry Into Force
Argentina 1993/11/30 1993/11/30
Belize 1999/01/16 ---
Burkina Faso 1998/09/10 2003/11/20
China 2012/08/09 2013/02/01
Costa Rica 1999/03/25 2004/10/08
Dominican Republic 1999/11/05 2011/11/27
El Salvador 1996/08/30 1997/02/25
Gambia 2010/06/08 ---
Marshall Islands 1999/05/01 ---
Nicaragua 1992/07/29 1993/01/08.
Nigeria 1994/04/07 1994/04/07
Panama 1992/03/26 1992/07/14
Paraguay 1992/04/06 1992/09/11
Philippines 1992/02/28 1992/02/28
Saint Vincent and the Grenadines 2009/12/17 2010/02/01
Saudi Arabia 2000/10/31 ---
Table 5: BITs between Taiwan and other States in Alphabetical Order194
Source: Kluwer Arbitration Database, Department of Investment Service, MOEA &
193 See Wilske, supra note 186, at 154.
194 In Table 5, the author includes only “bilateral” investment agreements. Therefore the ones with both United States and Malawi are not included here owing to these two are unilateral.
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UNCTAD195
Here, the author takes “Agreement between the India Taipei Association in Taipei and the Taipei Economic and Cultural Center in New Delhi on the Promotion and Protection of Investments”196 [hereinafter Taiwan-India BIA] and Taiwan-Japan BIA as examples in showing the appearance of Investor-State dispute settlement clause under Taiwan’s practice.
3.3.1 Taiwan-India BIA
Taiwan-India BIA is composed by two sectors—the agreement197 and the
“Unilateral Declaration by The Government of India for Protection of Investments Made by Investors from Taiwan in India” [hereinafter Unilateral Declaration]. The former instrument contains 14 articles with only clause dealing with disputes between contracting parties in Art. 13 in the scope of dispute settlement. In Unilateral Declaration, Art. 9 is set to resolve disputes between an investor and the government of India.
195 See BITs signed between Taiwan and other States, available at
http://www.kluwerarbitration.com/BITs.aspx?country=Taiwan (last visited Feb. 8, 2013). See also Department of Investment Service, MOEA, List of BITs signed between Taiwan and other States, http://www.dois.moea.gov.tw/asp/relation1_1_3.asp# (last visited Feb 8, 2013). See also UNCTAD, Total Number of Bilateral Investment Agreements Concluded (as of June 1, 2012),
http://unctad.org/Sections/dite_pcbb/docs/bits_taiwan.pdf (last visited Feb. 8, 2013).
196 Text of “Agreement between the India Taipei Association in Taipei and the Taipei Economic and Cultural Center in New Delhi on the Promotion and Protection of Investments,” available at http://www.finmin.nic.in/bipa/Taiwan.pdf (Feb. 13, 2013).
197 This part was done on Oct. 17, 2002.
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Art.9 of the Unilateral Declaration allows all disputes to be resolved through this provision; however it is unique in that this Investor-State clause limits not only the subject State to be only the government of India.198 As for ways of resolving such dispute, amicable settlement, local remedies, and arbitration are the options, as Arts. 9.2 and 9.3 stipulate:
2. Any such dispute which has not been amicably settled within a period of
three months from the date when such dispute arose may, if both the
parties agree, be submitted to the competent judicial, arbitral or
administrative bodies of India for resolution in accordance with Indian
laws.
3. Should the parties fail to agree on a dispute settlement procedure
provided under paragraph 2 above, either party may refer the dispute for
arbitration to: .
a) an adhoc arbitral tribunal in accordance with the Arbitration Rules
of the United Nations commission on International Trade Law, 1976,
subject to the following modifications: . . .
b) if the parties to the dispute failed to establish an arbitral tribunal as
198 Art. 9.1 of the Unilateral Declaration,
Any dispute between an investor and Govt of India in relation to an investment of the former under this Agreement shall, as far as possible, be settled amicably through negotiations between the parties to the dispute.
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referred to in paragraph (a) . . . , such dispute shall then be referred
to the Court of Arbitration of the International Chamber of
Commerce for arbitration:
. . . (emphasis added)
Drawing from the wording of Arts. 9.2 and 9.3, amicable settlement is an parallel option with local remedies that both parties agree upon. If parties fail to agree on a dispute settlement procedure, arbitration sets in. Instead of adopting the “cafeteria style,”
these dispute-resolving channels appear in order without the inclusion of cooling-off period. Inclusion of arbitration is open for any disputes without restrictions at any point, and the two options on where to submit the disputes in arbitration are also in sequence.
3.3.2 Taiwan-Japan BIA
Art. 17 of Taiwan-Japan BIA deals with Investor-State disputes. This article starts by defining “investment dispute”199 and then offers multiple paths in resolving such disputes. Similar to Investor-State dispute provisions in modern BITs, Art. 17 provides a three-month cooling-off period before disputes being submitted to an international conciliation or arbitration.200 It allows local remedies to be one choice in resolving
199 Art. 17.1 Taiwan-Japan BIA.
200 Art. 17.4 Taiwan-Japan BIA.
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investment disputes201 and also stipulates the relationship in application between local remedies and arbitration.202 Art. 17 reads”
2. An investment dispute shall, as far as possible, be settled amicably
through consultations or negotiations between the investor . . . .
3. It is confirmed that nothing in this Article prevent a disputing investor
from seeking administrative or judicial settlement within the Area of the
other Side.
4. If an investment dispute cannot be settled through such consultations or
negotiations within three months . . . the investment dispute, subject to
the mutual consent between the disputing parties, may be submitted to an
international conciliation or arbitration, . . . .
. . . (emphasis added)
From a structural perspective, Art. 17 of Taiwan-Japan BIA is much similar to that of modern BITs, such as the inclusion of cooling-off period and offering arbitration as a channel to resolve disputes with no limitation on what can be submitted to arbitration.