TABLE OF CONTENTS
INTRODUCTION 1307 II. CHINA'S BELT AND ROAD INITIATIVE AND AN ECONOMICALLY 1311 INTEGRATED ASIA A. The Vision of the Belt and Road Initiative 1311 B. Key Institutions of the Belt and Road Initiative 1312 1. Asian Infrastructure Investment Bank 1312 2. Silk Road Fund 1313 C. An Economically Integrated Asia under the Belt and 1315 Road Initiative III. ARBITRATION AS A PRIMARY VEHICLE OF INTERNATIONAL DISPUTE 1317 RESOLUTION A. Disputes Relating to China 1318 1. Disputes Arising within China 1318 2. Disputes Arising outside China 1319 B. Considerations in Selecting the Forum for International 1320 Commercial Arbitration IV. CONTEMPLATING REGIONAL HARMONIZATION OF THE PUBLIC POLICY 1323 EXCEPTION IN ASIA TO ARBITRAL ENFORCEMENT UNDER THE BELT AND ROAD INITIATIVE A. Theoretical Underpinnings of Harmonization 1325 1. Viral Propagation 1325 2. Transplantation 1326 3. Harmonization 1327 B. The Case for Harmonizing Arbitration Laws in the Asia 1328 Region C. The Public Policy Exception under Article V(2)(b) of the 1330 New York Convention D. Common Themes and Grounds Belying the Application of the 1332 Public Policy Exception E. Grounds for Successful Invocation of the Public 1333 F. Harmonizing the "Public Policy Exception" under Article 1334 V(2)(b) of the New York Convention V. DETAILS OF HARMONIZING THE PUBLIC POLICY EXCEPTION UNDER THE 1336 BELT AND ROAD INITIATIVE A. Competing Paradigms: Seat Theory versus 1336 1. Seat Theory 1336 2. Delocalization Theory 1337 3. The Relationship between "Delocalization" and 1338 "Harmonization" B. Drawing from the Experiences of the EU and OH ADA 1339 1. "EU Public Policy" of EU Member States 1339 2. A "Uniform" Public Policy Under OH AD A 1341 C. Substantive Contents of a Harmonized Public Policy 1343 1. Procedural Contraventions of Public Policy 1343 2. Substantive Contraventions of Public Policy 1344 D. Challenges and Other Aspects of Public Policy 1346 Harmonization 1. Compatibility of Legal Systems and National Cultures 1346 along the Belt and Road 2. Creation of a "Transnational" Public Policy 1347 VI. CHINA'S ECONOMIC RISE, SHIFTING POWER DYNAMICS: IMPLICATIONS 1349 OF THE BELT AND ROAD INITIATIVE ON REGIONAL AND INTERNATIONAL INFLUENCE A. Cementing China's Regional Position as a Rising 1349 Economic Superpower B. From Passive Adherent to Active Formulator of 1350 International Norms C. Relevance with International Governance and Chinese 1350 Rule of Law VII. CONCLUSION 1351 I. INTRODUCTION
The policy centerpiece of President Xi Jinping's foreign strategy, China's Belt and Road Initiative (BRI) (officially referred to by the Chinese government as--[phrase omitted], yidai yilu), ambitiously aspires towards expanding regional markets, facilitating regional cooperation and economic integration amongst the nations of the anecdotal Belt and Road map. (1) The BRI presently spans and traverses sixty-five countries in Asia, Europe, and the Middle East. (2)
The formation of this economic bloc exhibits among its features the establishment and operation of cooperation zones, designated funds for infrastructural project financing and investment, as well as a gradual dismantling of trade barriers among the Belt and Road nations. Such an economic bloc has already yielded substantial increases in regional trade volume. (3) In 2015, China's trade within the Belt and Road region reportedly surpassed $1 trillion USD, accounting for approximately a quarter of China's trade value that year. (4) The resulting potential for expanding cross-border commercial collaboration, trade, and investment yields among all the Belt and Road nations a common economic interest--an interest to capitalize on the manifold and multitudinous opportunities produced and stimulated by China's BRI. The strengthening of systems for regional economic cooperation among Belt and Road states and their investors thus promises collateral benefits for people and markets across all of the Belt and Road economies.
It is within this context of a steadily increasing volume of cross-border transactions and joint commercial enterprises that a robust legal framework is required to support and facilitate regional economic integration. The reasons are twofold. First, given a projected increase in numbers of multinational civil and contractual disputes arising out of the Belt and Road transactions, mechanisms and institutions for the fair and efficient resolution of cross-border disputes must be in place to resolve inter-party conflicts. In this context, three forms of contractual disputes may arise. These are, respectively, "state-state" disputes, "investor-state" disputes, and "investor-investor" disputes. In addition to facilitating the speedy resolution of disputes, such well-functioning mechanisms and institutions further serve to ensure foreign investor confidence in the BRI, whether such investments are made by state entities or private investors. (5) Second, a well-functioning dispute resolution system yields a secondary benefit of increasing transactional efficiency and reducing transactional costs for private investors and state parties to Belt and Road infrastructural projects. In particular, the minimization of transaction costs among Belt and Road nations operates to create a fertile environment for commerce and business, encouraging the same, and by extension, furthers the goal of economic integration within the Asian region. (6)
It is expected that international commercial arbitration will, under market forces, form a preferred, indeed optimal, primary vehicle for commercial dispute resolution under the BRI. (7) This is in consideration of the traditional distrust and reluctance of investors to utilize foreign courts--with which they may not be familiar--to resolve commercial disputes. Indeed, a further consideration lies due to international commercial arbitration's potential for offering commercially flexible solutions and particular suitability for mitigating conflicts between different legal systems. In addition, taking into consideration the frequently transnational nature of commerce and infrastructural investment under the BRI, the existing system of highly harmonized arbitration laws among countries across the world provides a sturdy basis for utilizing a dispute resolution process untethered to the laws of a particular jurisdiction, and thus more likely to be amenable to all parties involved. In light of the wide reach of the BRI inclusive of the Asian, African, and European continents, investors may have regard to a plethora of indicators of development level, ranging from capacity-building to political and economic indicators, in determining the most appropriate neutral fora to resolve commercial disputes via arbitration, if and when they arise. This Article therefore provides a comprehensive comparative analysis of the Asia-Pacific nations along the Belt and Road for international commercial arbitration.
The prominent level of harmonization already existing among the international arbitration laws of many Belt and Road countries renders arbitration the ideal mechanism of dispute resolution. Moreover, arbitration as part of a harmonized legal framework is necessary to fulfill the collateral dispute- resolution needs of increased commercial trade and investment collaboration, and to further the goal of economic integration. It is against this backdrop that the author contends that the BRI provides a unique opportunity to contemplate the real possibility of a "geo-legal" harmonization of the public policy exception to arbitral enforcement within Belt and Road nations.
The public policy exception, which expresses fundamental policy considerations for non-enforcement of awards within and by national courts, is an exception to the generally harmonized system of arbitration laws. (8) Frequently characterized as an "unruly horse" due to the indeterminacy of its ambit, it yields corresponding negative implications for commercial certainty, business efficacy, and investor confidence in light of the BRI. (9) This shortcoming may be regarded as de facto addressed by jurisdictions' pro-enforcement judicial approaches encompassing narrow interpretation and application of the public policy. Regardless, the high-stake commercial and investment concerns of the BRI, particularly within China herself, are expected to demand greater delineation and definition of concerns prescribed by the exception to enforcement.
In addition, while this Article focuses on harmonization of the public policy concept in the context of international commercial arbitration, its conceptual homogenization is also envisioned to retain relevance in the wider contexts of investment arbitration generally. One notes that from a practical perspective, the feasibility of such harmonization of the public policy exception will depend on receptiveness to embracing the new concept of a "regional" public policy of the Chinese government and judicial system. This may be answered with the submission that such developments, in relation to which China is anticipated to take a proactive role, hold great potential to serve as a positive regional example demonstrating both the feasibility of, and common economic benefits in the regional harmonization of legal norms. Additionally, the implications of the arbitration initiative proposed are themselves far-reaching. While conceived specifically in the context of the BRI, the conceptual harmonization of international commercial arbitration holds exciting potential significance for China's soft power rise from a passive norm adherent to an active norm formulator.
This Article is structured as follows. Part II sets out the salient features and significant institutions constituting China's BRI. Part III proceeds to consider the necessity and attractiveness of harmonization of legal norms from the dual standpoints of a normative jurisprudential perspective, and the practical benefits of...