CONTEMPORARY EURASIA VIII (2) ContEurVIII2 | Page 19

SAREN ABGARYAN
which is a high threshold and uncharacteristic of ISDS clauses in the 21st
century.
Legal Urgency of a New BIT Between Armenia and China
The Armenia–China investment treaty follows the old model (first
generation) of Chinese BITs where the countries adopted a protectionist
and restrictive model of the treaty. This restrictiveness is well reflected in
the fact that the BIT does not have a national treatment clause or umbrella
clause. Additionally, the MFN, FET, and FPS clauses provide vague and
outdated wording that can potentially be misinterpreted by investment
tribunals. Most importantly, the ISDS clause provides the possibility for
investors to bring claims against states only concerning the amount of
compensation from expropriation. Those are considerable limitations and
leave many aspects of investor rights protection uncovered by the
agreement.
It is a well-justified objective for Armenia and China to formulate
a new BIT that will be aimed at considerably updating the protective
framework of investments, potentially becoming a stepping-stone for
China to increase outward foreign investments to Armenia. This potential
renegotiation of BITs needs to also beconsidered in the context of the
Chinese BRI, which encourages the participation of state and private
investors in long-term infrastructure deals and projects. Thus, additional
assurances on the protection of foreign investors rights and assets can
give comfort to private investors. Armenia, being at the crossroads of
Chinese initiatives, has an opportunity to be a link between Asian, Middle
Eastern, and European markets thanks to its geographical location.
Chinese rise in the global economic order, its increasing outward
foreign investment, and BRI create a mutually beneficial relationship
between the states that needs to be leveraged to provide a higher standard
of treatment for foreign investors. This will additionally reinforce the
party’s relationship and will encourage Chinese investments in Armenia
under the conditions of investor rights protection in accordance with the
modern developments of investment treaties. Additionally, Armenia’s
recent accession to the Eurasian Economic Union and deepening trade
relationship with Europe provide Chinese investors with a window to
invest, produce goods and services in Armenia, and freely market them in
both CIS and EU markets.
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