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19 Indonesian J. Int'l L. 1 (2021-2022)

handle is hein.journals/indjil19 and id is 1 raw text is: Indonesian Journal of International Law (2021), Vol. 19 No. 1, pp. 1-38 https://doi.org/10.17304/ijil.voll9.1.1 THE PROTECTION OF FOREIGN INVESTMENTS IN DISPUTED MARITIME AREAS OF THE SOUTH CHINA SEA Anh Nguyen University of Vienna, Austria Correspondence: ng.hoanganh.mika.2797@gmail.com Abstract This study used a legal framework developed by a recent scholarship to examine the protection of foreign investments in disputed maritime areas. The framework classifies these areas and establishes the jurisdictional challenges faced by investment tribunals in such constellations. For instance, there are high-profile foreign investments in the South China Sea (SCS) with signifcant threats of increasing escalation between SCS states. Therefore, this study aimed to examine investment protection in disputed waters of SCS using this framework. Since BITs of SCS states include maritime areas beyond the territorial sea in their territories, there is need to abide to international law. Therefore, tribunals are caught in a double bind when deciding on their jurisdiction. For instance, they need to assess whether disputed maritime areas fall under the BIT's territorial scope of protection, conferring them to territorial jurisdiction. This necessitate the need to determine the maritime entitlements conformity with international law, which is against the scope of jurisdiction of the investment tribunal. The results showed that tribunals may not overcome this jurisdictional hurdle as a matter de lege lata. In this regard, de lege feranda are promising legal rationales to establish incidental jurisdiction over disputed maritime areas. Therefore, tribunals decide on their jurisdiction over investments in these areas. Keywords : disputed maritime areas, incidental jurisdiction, ISDS, South China Sea Submitted : 6 April 2020 1 Revised : 19 August 20211 Accepted : 8 September 2021 I. INTRODUCTION The Asia-Pacific region receives the largest share of global FDI inflows among developing economies.1 Foreign investors in the South China Sea (SCS) are more concerned about protecting their investments amid the increasing tensions in this region.2 This is because SCS has untapped seabed energy reserves with increasing offshore interests and militarization.3 Therefore, the protection of the existing and potential foreign investments is significant for United Nations Economic and Social Commission for Asia and the Pacific, Foreign Direct Investment Trends and Outlook in Asia and the Pacipc 2019/2020 (New York, United States: UNESCAP, 2020), 2. 2 Territorial Disputes in the South China Sea, The Council on Foreign Relation's Global Conflict Tracker, accessed 31 March 2021, https://on.cfr.org/35aWt9U. 3 International Energy Agency, Offshore Energy Outlook 2018 Report, accessed 22 March 2021, https:// www.iea.org/reports/offshore-energy-outlook-20 18. Copyright O 2021 - Anh Nguyen Published by Lembaga Pengkajian Hukum Internasional

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