Author
Ms ZHANG Ruohan
Organisation/Institution
City University of Hong Kong, School of Law
Country
HONG KONG (SAR OF CHINA)
Panel
International Investment Law
Title
Plurilateralism in International Investment Law: From Contract Theory to Legitimacy Theory
Abstract
International investment law is undergoing changes that cannot be captured by the traditional bilateral paradigm. Unlike the trade regime, where plurilateral instruments supplement multilateral rules and generate MFN-based spillover, the investment regime lacks a functioning multilateral framework and faces a legitimacy crisis surrounding BITs. States have responded through domestic investment laws and regional dispute-settlement pathways. This research investigates following questions: (1) can plurilateralism function as a substitute for absent multilateralism in investment governance? and (2) how do soft law enable plurilateral ordering despite the regime’s bilateral nature? This paper addresses these questions by situating contemporary reforms within a shift from contract theory to legitimacy theory in international investment law. First, the paper maps emerging practices in investment governance, including how foreign investment laws incorporate regional courts, such as the Arab Investment Court and the OHADA Common Court of Justice and Arbitration (CCJA). Besides, it investigates how cross-sectoral initiatives, including the IFD Agreement, promote plurilateral tendencies. These instruments operate collectively and generate plurilateral effects, even without MFN spillover or open-access institutions. Second, the paper explains why these developments cannot be understood through consent-based contracting. Traditional IIAs relied on state consent to confer investors directly enforceable rights. The crisis of the liberal international order has exposed the limits of this model and reinforced demands for regulatory balance, investor obligations, and public-interest safeguards. Third, the paper shows how legitimacy-based mechanisms encourage regulatory convergence. These mechanisms include domestic legislation, regional cooperation, arbitral jurisprudence, and soft-law instruments. Together, these sources enable convergence without deliberate cooperation, create shared expectations, and support consensus-building that moves investment governance beyond the bilateral model. To conclude, these developments constitute an emerging form of investment plurilateralism, functioning as a governance mechanism in a multilateral vacuum. This re-conceptualization clarifies the normative foundations of post-BIT reforms and offers a framework for future rulemaking.
Biography
ZHANG Ruohan is a PhD Candidate at the School of Law, City University of Hong Kong, where she is a recipient of the Hong Kong Postgraduate Scholarship. Her research focuses on international investment law, specifically the rise of non-treaty-based Investor-State Dispute Settlement (ISDS) and the “domestication” of international economic law. Her recent scholarship includes “Consent without Privity? Reassessing Investor Consent and Sovereignty Reassertion through Domestic Law,” published in theContemporary Asia Arbitration Journal, 18(2) (2025): 267–302. She has presented her research at the 2025 Taipei International Conference on Arbitration and Mediation. Before beginning her doctoral studies, Ms. ZHANG earned an LL.M. from the University of Hamburg, where she ranked first in her class, and a Master of Laws from the China University of Political Science and Law (CUPL). She also completed an exchange period with distinction at Lund University, Sweden. Her professional background includes serving as a researcher for a Ministry of Commerce (PRC) project on trade remedy negotiation rules and receiving recognition as a top-ten advocate in the FDI International Investment Arbitration Moot (Asia Pacific Round). She holds a Bachelor of Arts from CUPL and the PRC Legal Professional Qualification.
