This chapter criticizes the strand of recent political science and political theory that claims liberal democracy is under threat from illiberal populism and that this is a wholly unique phenomenon of the present rather than part of recurrent crisis of liberal democracy tied to the political sociology of the Schumpeterian competitive party model. Viewed this way, this crisis is in fact a result of the failure of liberal democracy to offer citizens a defensible principle of legitimacy based on a robust notion political equality, the core principle of democracy. Precisely, what appears to be the source of its robustness, the competitive process of parties and politicians for the popular vote is—when viewed as a recurrent struggle to bring this model back under the control of citizens—the very source of its frailty. The dichotomy liberal democracy-populism blinds us in assessing the actual developments arising from the fragility of liberal democracy. Indeed, it may inform responses that will lead to outcomes quite at odds with the original intentions of those who deploy it.

This chapter reviews China’s BIT-related ISDS cases, in particular the awards on jurisdiction, and the tribunals’ varying techniques in interpreting the ISDS clauses in China’s BITs with a focus on jurisprudential analysis of these cases and the tribunals’ treaty interpretive techniques. In brief, the tribunals have tended to take an expansive approach when called upon to determine jurisdictional issues. Albeit largely jurisprudential, a sense of the tribunals’ treaty interpretation techniques may help shape some foundational underpinnings for China’s policy response to the proposals to reform the ISDS system made by the EU, the USA and others. This chapter also touches on two unique procedural rules in Chinese BITs: (1) those relating to the legal standing of investors originated from Hong Kong and Macau, and (2) those relating to SOEs. Chinese SOEs are often involved in public international law as the governmental instrument triggering state responsibility for breaches of international law due to the rules of state attribution.

International investment law and arbitration has a long history dating back to the nineteenth century. It has since developed and adapted following the political and societal forces at work both domestically and internationally. The balance between the interests of developing States and developed States and, more fundamentally, between public and private interests have played a key role in this process. It can be seen that the balance struck between these interests at different periods of time explains to a large extent the evolutive features of this field of law. This holds true with regards to the set of rules governing both the relations of foreign investors with the States in which they invest and the settlement of the disputes between them.

To make sense of this evolution and for the purpose of contextualising the analysis of international investment law and arbitration provided in the textbook, Chapter 1 distinguishes between three key stages in its history and analyses the respective societal context and legal features pertaining to each. These stages are: (1) the origin of international investment law and arbitration; (2) its emergence as a proper field of international law; and (3) the rise and then crisis this field of law has known since the 1990s.

By way of context to the detailed analysis of investor–State arbitration conducted in Part III of the textbook, Chapter 10 examines in turn the types of investment-related disputes that can arise and the various dispute settlement mechanisms that can be availed of to settle such disputes. For the types of investment-related disputes, it distinguishes between the different types of State–State disputes and investor–State disputes. For the purpose of examining dispute settlement mechanisms, a distinction is made between the mechanisms made available in international investment agreements (IIAs) to settle investment-related disputes and those that have been used prior to or in parallel to the development of IIA practice to settle ‘single’ disputes or ‘sets’ of disputes. Specific attention is paid to the mechanisms that have been established or contemplated in the 2010s to replace investor–State arbitration in the settlement of investor–State disputes as a reaction to the criticism formulated across civil society against the latter.