Paradigm shift; the emergence of
arbitral forum shopping in CPEC
Rao Qasim Idrees,Rohimi Shapiee and Haniff Ahamat
Faculty of Law, Universiti Kebangsaan Malaysia, Bangi, Malaysia
Purpose –The phenomena of arbitral forum shoppingto resolve a commercial investment dispute is still
under developmentand more complicated in many states. However, for Pakistan, it seemsin an evolutionary
phase, where the country is struggling hard to adopt the best practiceof dispute resolution through forum
shopping clauses. This struggleis even more inﬂated with huge Chinese investment through China Pakistan
economic corridor (CPEC) projectsin Pakistan, which come alongside with commercial investment disputes.
For this purpose, the current treaty or contract-based system between China and Pakistan and litigation
based domestic civil court structurelook obsolete, hence, appear to require reinstatement of forum shopping
clauses underconcerned treaties or contracts for CPEC investment-relatedissues.
Design/methodology/approach –The authors choosea legal research method. The research design is a
comparative analysis between CPEC contracts and dispute resolution mechanism between China and
Pakistan and also the domestic civil court’s litigation system. This analysis selected by the authors due to
inefﬁcient bilateralinvestment arrangements and efﬁcient resolution of future commercialdisputes in CPEC.
While the internationalarbitration system is included in the assessment were particular in the time and space
context. The comparisoncomprises on dispute resolution clausesin free trade agreement (FTA) and bilateral
investmenttreaties (BIT) between China and Pakistan and the system of resolvingdisputes by CPEC clauses.
Findings –The authors ﬁnds that in the absenceof CPEC forum shoppingclause under dispute resolution
system, Pakistan is highly at risk to lose foreign investors, and therefore, set back the goal of long term
economic sustainability in the region. However, China has already made its investment policies safer with
establishing three internationalcommercial courts (also referred to as Belt and Road courts),one in Xi’an for
the land-based Silk Road EconomicBelt, one in Shenzhen for the Maritime Silk Road and one in Beijing that
will serve as the headquarters. These courts will be offering litigation, arbitration and mediation services.
According to oneview, China aims to have all belt and road initiative (BRI)disputes resolved by these courts.
This makes Pakistanposition more awkward and needs proactive measures,as CPEC investment is based on
Pakistan foreign direct investment policies and legal structure. Therefore, it will be complicated and less
favourablefor Pakistan to deal with such cases under ChineseCourts.
Originality/value –The paper’s primary contribution is ﬁnding that comprehensive analysis of
alternativedispute resolution mechanism between China and Pakistanover CPEC investment is inevitable. A
socio-legalresearch combine with an examination of Singapore InternationalCommercial Court functions and
mechanism and CPEC plans further contributes to ascertain the best model of the settlementof commercial
disputes underinvestments in Pakistan. This research paper anticipatesfuture economic and legal problems,
which Pakistanmay encounter.
Keywords China Pakistan economic corridor, Civil court litigation, Forum shopping,
Investment dispute resolution, Hague convention, Investment dispute arbitration
Paper type Research paper
Forum shopping is not a novel thought or model but it has been known and functional for
decades. The concept of “Arbitral forum shopping”has different dimensions and
interpretations. In itsadvance interpretation, the idea of forum shopping is distinctfrom the
Received3 May 2019
Revised23 July 2019
Accepted9 August 2019
Journalof International Trade
Vol.18 No. 3, 2019
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