How CIETAC’s rules realize party autonomy

By Thomas Tang, JunZeJun Law Offices
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In recent years, with the growth in cross-border investment, investment arbitration cases between investors and host countries have likewise increased accordingly. According to the Special Update on Investor-State Dispute Settlement: Facts and Figures, published by the United Nations Conference on Trade and Development (UNCTAD) in November 2017, there were at least 35 investor-state dispute cases based on investment treaties or agreements between January and July 2017, causing the total number of Investment dispute cases to increase to 817, with a total of 144 countries being involved in one or more such Investment dispute cases.

Consistent with the development trends in international investment arbitration, and with China’s having become a country that both receives investment from abroad and invests abroad, investment dispute cases involving the central government and enterprises have also been gradually trending upwards in recent years. According to figures released by the International Centre for Settlement of Investment Disputes (ICSID), since 2007, a total of six Chinese parties have instituted investment arbitration with ICSID against foreign governments. Additionally, in 2011, 2014 and 2017, the ICSID accepted investment arbitration cases instituted by Ekran Berhand of Malaysia, Ansung Housing of South Korea and Hela Schwarz of Germany, respectively, against the central government.

In contrast to commercial disputes between enterprises, an investor will generally not enter into a dedicated agreement for the protection of its investment with a host country’s government, but requisitioning, nationalization or discriminatory treatment by the host country’s government will usually result in the investor incurring a major loss. For example, in Ping An Bank v Belgian government (ICSID), Ping An Life Insurance Company of China Ltd and Ping An Insurance (Group) Company of China Ltd (China Ping An) acquired shares in Fortis Group for consideration exceeding €2 billion (US$2.3 billion) in total between 2007 and 2018.

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Thomas Tang is a CIETAC arbitrator and a partner at JunZeJun Law Offices

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