Amidst the continued advancement of the 'Belt and Road initiative, China has steadily evolved from being a conventional recipient of investments to becoming a key influencer in shaping global investment regulations. As a result, the dispute settlement mechanism of International Investment Agreements (IIAs) between investor countries and host countries is facing increasingly complex legal risks and institutional challenges. Through a case analysis and literature review, this article identifies the core risks of legal fragmentation, divergent interpretations of provisions, and sovereignty cession in the current Investor-State Dispute Settlement (ISDS) mechanism. It highlights the legal uncertainties in investment governance resulting from factors such as the broadening of national security reviews and the imposition of unilateral sanctions. Given the existing problems, the article proposes the construction of a multilateral appeal mechanism, the unification of legal interpretation methods, and the introduction of the principle of proportionality as optimization paths to enhance the consistency of rulings and the binding force of the law among countries. Concurrently, the article draws on the real-world experience of the 'Belt and Road initiative to mitigate the legal risks associated with IIAs and enhance the mechanisms for risk prevention and management. This paper aims to offer institutional innovations and policy recommendations to enhance the risk management of IIAs under the 'Belt and Road framework, while balancing investor protection and host country sovereignty.
Xingyu Wang (Tue,) studied this question.