ANALYSIS OF CONFLICTS ARISING FROM THE BELT AND ROAD INITIATIVE

ANALYSIS OF CONFLICTS ARISING FROM THE BELT AND ROAD INITIATIVE

by Giulio Stefano Ravot

University of Cagliari, Trinity College Dublin

 

Seven years have passed since the launch of the BRI, ipso facto several authors have questioned, even critically, how the disputes arising from the Chinese initiative should be managed and resolved. In this sense, a quote of Professor Malik Dahlan from Queen Mary University of London is very representative: there is an urgent need for a new Asian dispute resolution model.

 

Since the BRI was launched, there has been a frequent lack of familiarity with the structure and operation of contractual terms between cooperating countries. Chinese companies have only been international for a short period of time and are not yet familiar with BRI business dynamics, resulting in huge losses in some cases.

 

Considering the purely commercial nature of the conflicts related to the initiative, it is now well known that since the 1980s, the business community has changed its approach to economic disputes, Fisher and Ury have shown how “win-win” agreements are optimal for maintaining the relationship between the commercial parties in case of conflict.

 

Conflicts concerning the initiative are mainly cross-border and characterized by the presence of multiple parties involved in the dispute, in such circumstances ADRs would allow to solve the problems arising from the clear regulatory differences between the multiple legal views involved in the project.

 

The various ADR methodologies, as dynamic and practical tools for conflict resolution, will take on a position of incredible importance in view of the almost 1,000 billion investments planned for this initiative (according to the Centre for Strategic & International Studies in Washington).

 

Mediation is the preferred tool for the resolution of such conflicts. Formally, arbitration would be the optimal tool for the resolution of BRI disputes, simply for a numerical and uniformity consideration. Specifically, there are more than 70 countries within the BRI, with only 5 countries that are not signatories to the New York Convention, i.e. Iraq, Maldives, Timo-Leste, Turkmenistan and Yemen.

 

Clearly, while formally having a large number of BRI countries adhering to the New York Convention makes arbitration relatively easy to use, for cultural and economic reasons this instrument has been used exclusively as a subsidiary to mediation. In order to emphasize the potential of mediation as a tool for resolving BRI conflicts, it is necessary to highlight how China has identified the Singapore Mediation Convention as a useful but above all a quick tool.

 

China is actively engaging in avoiding any “commercial detachment” by ensuring a series of initiatives aimed at creating a secure environment of dispute resolution methodologies.  To name a few, Regional Comprehensive Economic Partnership (‘RCEP’), the launch of the China International Commercial Court (‘CICC’), The Hague Choice of Court Convention, the Hague Judgments Convention and, as mentioned earlier, the Singapore mediation Convention.

 

In a modern and constantly evolving context such as the current one, the rhythms of the market are focused on the speed of the business relationship, which makes it inconvenient for companies to invest time and economic resources to solve conflicts characterized by exhausting lengthy process system and costs difficult to access.  For this very reason China was one of the first countries to sign the Singapore Convention.

 

A convention that allows an easy and efficient circulation of mediation agreements between BRI member countries, perfectly matches China’s willingness to resolve disputes quickly in order to ensure a rapid continuation of trade. China represents one of the driving forces of the global economy.  Specifically, China and the EU have expressed their mutual interest in the use of mediation as a connecting point for investment.

 

If more BRI countries ratified the Singapore Mediation Convention, significant practical simplifications would be expected.  It can be considered that, in the event that a large scale consensus is actually achieved, mediation will occupy the functional space that legislators around the world have been trying to achieve for years.  This normative provision recognizes the value of international trade and the role of mediation as a conflict resolution tool, and is aware of how it is increasingly used in international trade practice as an alternative to the process.

 

The establishment of a framework of international settlement agreements deriving from mediation and acceptable even by states with different legal-social and economic systems, can contribute to the development of harmonious international economic BRI relations.

 

Exactly in a peculiar way to what is the purpose of the Chinese initiative, the main objective of the Convention is to provide an incentive to mediate in the many cases where mediation might otherwise not be attempted.

 

If this legislation will reach the coverage of the New York Convention with a number of 159 countries having ratified it, it would be clear that mediation could become an even more widely used instrument by countries with a lack of legislation, allowing to connect a large number of actors (belonging to countries without regulatory recognition), with the institution of mediation.

 

The use of the Singapore Mediation Convention among BRI countries could be an excellent “pedestal” to showcase the potential of mediation as a conflict resolution method.  This is why it is hoped that several jurisdictions will support the Singapore Convention, inaugurating a brighter future for dispute resolution in Asia.

 

Obviously, the scope of the Singapore Mediation Convention is not only of particular importance to the Asian world; it would be perfectly suited also to non-Asian BRI member countries.

 

Specifically, (in conclusion of this pindaric flight on the possible influences of the Singapore Mediation Convention at a global level and with reference to the BRI), it is worth stressing the particular importance that such a convention would have in the African continent, where China has invested particularly actively.  In African countries, it is difficult to make cross-border mediation agreements effective, and very often there are lacks in domestic law. Supporting a “pre-established” model of law such as the Singapore Mediation Convention would allow these countries to simply adhere to a model common to other continents. This would greatly facilitate trade between African countries and other BRI countries.

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