Legal & Regulatory

Suzerainty Issues Hold back the West in Embracing China’s Belt and Road

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The concept of “suzerainty”, whereby a dominant state controls the foreign relations of a vassal state, while at the same time allowing it sovereign authority in its internal affairs is hanging over the reluctance to sign up to China’s Belt and Road Initiative.

The Chinese have long stuck to the principal of suzerainty in their claims over Tibet, and have constantly pushed the concept as proof of their legitimate right to rule. That is now coming back as a sticking point on the “Memorandum of Understanding” presented by the Chinese to foreign governments interested in taking part in the Belt and Road Initiative. These agreements may contain references to the authority of Chinese courts in disputes, an issue I pointed out in the article: China Passes Belt & Road Trade Dispute Mechanism – But Who Will Have Final Say? and is further elaborated here:  China to Set up Belt and Road Dispute Courts in Beijing, Xi’an, and Shenzhen.

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China to Set up Belt and Road Dispute Courts in Beijing, Xi’an, and Shenzhen

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Following from last week’s announcement that China would be putting in place a dispute mechanism structure to deal with disputes concerning Belt and Road projects, Chinese news media have reported that the new BRI dispute settlement mechanism will comprise of three international commercial courts. These will be established by China’s Supreme People’s Court in Beijing, Xi’an, and Shenzhen; the headquarters will be in Beijing.

The court in Xi’an will cover commercial disputes along the Silk Road Economic Belt, the land-based route which runs from western China to Europe and the Middle East through Central Asia, while the Shenzhen court will oversee cases arising along the 21st Maritime Silk Road, a sea route which links the Chinese coast to Europe and Africa via Southeast Asia and other waters. The courts will resemble Singapore’s International Commercial Court and Dubai’s International Finance Centre Courts. It is also reported that Beijing’s top legal body is eager to promote mediation to resolve BRI disputes.

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