POL 7030 University of Cincinnati Public Policy Under the Belt and Road Initiative: Essay

Public Policy Under the Belt and Road Initiative: Essay

POL 7030 - Public Policy Implementation and Evaluation

University of Cincinnati

December 3, 2023

Public policy, whether in the domestic or international context, is of

variable scope. It is often referred to as an amorphous exception the

unruly horse. Burrough, J. stating that public policy is a very unruly

horse, and when once you get astride, you never know where it will

carry you. It may lead you from the sound law. It is never argued at all

but when other points fail. It is some moral, social, or economic

principle so sacrosanct as to require its maintenance at all costs and

without exception.

In international arbitration, the function of public policy is seen as that

of displacing the otherwise applicable law, determined in accordance

with the conflict of law rules of the seat of arbitration in other words.

The function of public policy under the Convention is basically to

safeguard the fundamental notions of morality and justice of the

forum. In civil law jurisdictions, the definitions generally refer to the

basic principles or values upon which the foundation of the society

rests without precisely naming them and, in common law

jurisdictions, the definition refers to more precisely identified yet very

broad values such as justice, fairness, or morality. Despite this

expansive character, courts in most jurisdictions have been very

reluctant to invoke the exception to deny recognition to foreign

awards. Public policy plays an important role in international

arbitration in various stages: 1) in giving effect to arbitration

agreements; 2) in the annulment of an award; and 3) in the recognition

and enforcement of a foreign arbitral award. It varies in each of these

stages.

The Belt and Road Initiative spans more than 70 countries, with

variety of jurisdiction including civil law, Islamic law, common law,

hybrid system each of above-mentioned legal system has own concept

and definition of public policy that leads to differences in the notion

and application of public policy. In order to better understanding in

this section public policy in legal system along the belt and road

region will be examined.

As for public policy in China, it worth to note that Chinese domestic

legislation adopted the term 'social and public interest' rather than

'public policy'. The concept of 'social and public interest' appears in

several other bodies of legislation, such as the Law of the People's

Republic of China on Economic Contracts Involving Foreign

Interests, the Contract Law, the Foreign Trade Law and the Civil

Procedure Law as one of the grounds for refusing the enforcement of

arbitral awards. However, none of them define the term 'social and

public interest'. According to the GPCL (General Principle of Civil

Law) and the Law of the Application of Law, foreign law can only be

applied in a foreign-related case, as long as it is not against the ‘social

public interest’ of China. What is clear however is that the Chinese

government has long adhered to the principle that foreign awards

would be recognized and enforced under certain conditions, as

stipulated in Article 282 of the PRC’S Civil Procedure Law.

In some countries, an important and inalienable part of public policy

is Islamic law and these countries will not enforce awards that are

contrary to the Muslim Shari’a. For example, the Civil Code of the

United Arab Emirates provides that public policy includes “rules

relating to personal status such as marriage, inheritance, descent, and

rules concerning governance, freedom of commerce, trading in

wealth, rules of personal property, and provisions and foundations on

which the society is based in a way that do not violate final decisions

and major principles of Islamic Shari’a. It is said that the attitude of

Islamic law towards foreign judgments and awards is based on the

principle that non-Muslims are free to enter into contracts and to have

business relations that are valid according to their own religions

without the need to take into account the concept of prohibition and

authorization in Islamic law; however, if a Muslim is a party to the

contract, Islamic law and public policy apply.

As far as common law is concerned, it should be noted, however, that

EU member states share common values and standards on various

issues, so achieving a transnational public policy seems easier

according to the statement that EU member states have judicial

discretion to determine the essence of the considerations that

constitute their jurisdiction. However, due to the supranational nature

of EU laws and directives regarding EU member states, individual

member states are also obliged to take into account EU legislation

when determining the main content of public policy. The concept of

what would be injurious or harmful to the public good or the public

interest is also conditioned by the unique interplay of the social,

political, moral, economic, and other relevant elements of each state

and this has also varied from time to time and from state to state. For

instance, the common law rule against compound interest has been

abandoned in countries such as England, Canada, Australia, and India

and is no longer against public policy. Russian courts have held that a

penalty does not violate public policy, while on the other hand, the

Portuguese courts have held that imposition of a penalty violates its

public policy.

In sum, the fundamental interest of the BRI, aside from the

development of regional infrastructure, is the bolstering of crossborder

commercial and trade cooperation among the Belt and Road nations.

Regional prosperity, envisaged as an interest of all jurisdictions in the

Belt and Road Asian region, may be facilitated through the application

of harmonized public policy.