The International Chamber of Commerce (ICC) has launched a dispute resolution commission that will engage with China’s Belt and Road Initiative (BRI).
The mechanism has been established through the ICC’s Court of Arbitration and will seek to resolve international disputes along the route of the BRI.
China is using the BRI to construct land and maritime trade routes connecting Asia with the rest of the world. The BRI was originally mooted to connect Asia with Europe, but has subsequently been expanded to include parts of Africa, Latin America and the Caribbean, and even the Arctic region.
Huge infrastructure investments are planned, with the cumulative investment expected to run into trillions of dollars. This week China agreed bilateral currency swap agreements worth US$224bn with the central banks of 24 participating governments.
The ICC Court is aiming to introduce international mediation standards to any disputes that arise in the infrastructure build and investment, with commission chair Justin D’Agostino telling GTR that it is already “liaising with numerous stakeholders in China, including at the municipal level”.
“The commission’s role is to engage with all these parties, both Chinese and from other jurisdictions along the BRI and beyond, to promote ICC dispute resolution services. As well as arbitration, the ICC offers a well-developed mediation service,” explains D’Agostino, who is global head of disputes at Herbert Smith Freehills in Hong Kong.
He adds: “The Chinese government is actively promoting mediation as a first port of call when disputes arise, with arbitration only if mediation does not succeed. We know that users of dispute resolution services are increasingly keen on mediation, and other ‘mixed-mode’ methods. The ICC is perfectly placed to address users’ needs, with both mediation and arbitration rules on offer, and strong panels of mediators and arbitrators.”
BRI was expected to bring a raft of opportunities for international banks and companies to build, consult and finance projects. Thus far, however, the work has mostly been done by Chinese parties. But as work steps up, international contractors are expected to be more involved, with D’Agostino saying that “there is therefore an increasing number of non-Chinese investors, contractors and developers, as well as sovereign states, involved in Belt and Road projects”.
ICC arbitration is already used by parties in Mainland China who invest outbound and transact with non-Chinese counterparties. Furthermore, China has signed up to internationally recognised conventions on arbitration, while Chinese courts have the power to enforce an ICC award against a Chinese party. This gives the commission confidence that the ICC Court can be an effective and widely-used tool along the BRI route, D’Agostino says.