Publish time: Wed Aug 16 16:42:18 CST 2017
On August 9 2017, the 12th In-house Counsel Forum themed “Forum on Opportunities and Challenges of China-related Investment Arbitration” was successfully hosted by the Beijing Arbitration Commission / Beijing International Arbitration Center (the “BAC”). Mr. Reza Mohtashami, Mr. John Choong and Ms. Leilah Bruton from Freshfields Bruckhaus Deringer LLP were invited as the speakers, and Dr. Arthur Dong, BAC arbitrator and Partner of Anjie Law Firm as the moderator and commentator. The event has attracted more than 100 professionals from large companies, renowned law firms and research institutions.
At the beginning of the Forum, Dr. Chen Fuyong, Deputy Secretary General of the BAC, delivered an opening speech. He expressed warm welcome to the audience and the speakers on behalf of the BAC, and pointed out that the BAC has held a number of seminars on investment arbitration related issues focused by the professionals within the industry. This time the BAC invited the legal counsels of the Chinese party in Beijing Urban Construction Group Co. Ltd. v. Republic of Yemen. This reflected the BAC’s continuous attention to the hotspots of the diversified dispute resolution circle and its tireless efforts to provide exchange platforms for colleagues of the circle, looking forward to a good harvest from the discussion of the speakers.
Dr. Chen Fuyong
Thereafter, Ms. Leilah Bruton started her speech. She stressed that Bilateral Investment Treaties are instruments entered into by two states aiming at protecting investment by investors from either state against any improper treatment of the other state. She gave a detailed introduction of the protected objects and the main measures of protection. With the example of the BIT between China and Finland, she analyzed the connotation and extension of “investment” and “investor”. When talking about the protections provided by BITs, she emphasized that each BIT is resulted from negotiation, and thus is different from one another, and the protection measures most frequently seen include fair and equitable treatment, national treatment, most-favored nation treatment, compensation for expropriation and referring disputes to litigation or arbitration. Ms. Leilah Bruton’s clarification provided the audience with a clear and intuitive understanding of the origin cause and background of investment arbitration.
Ms. Leilah Bruton
Mr. Reza Mohtashami as the second speaker made a detailed interpretation of the BITs to which China is a party. Through detailed statistics and vivid case studies, he compared the features of the first generation and the second generation BITs, and also shared his understanding of dispute resolution clauses based on Beijing Urban Construction Group Co. Ltd. v. Republic of Yemen which he has been engaged in. He pointed out that attentions should be paid not only to the wording itself but also the context as a whole when determining whether a narrow definition or a broad interpretation should be adopted to interpret the dispute resolution clause, so as to provide investors with legal protection from the standpoint of the purpose of the treaty. Next, Mr. Reza Mohtashami gave analysis on the qualification of state-owned enterprise claiming for compensation at the ICSID with reference to tribunal’s determinations on jurisdiction, which provided beneficial guides for state-owned enterprises’ participation in similar cases.
Mr. Reza Mohtashami
Then Mr. John Choong, Partner and Chair of China arbitration practice of Freshfields Bruckhaus Deringer LLP, shared with the audience his experience of designing the protection framework of BITs. He said that the “Belt and Road” Initiative might be connected with cross-border investment up to USD 900 billion, and opportunities and challenges coexist in such China-related investments. So it is particularly important to design a proper structure of protection under BITs. His “five steps” proposal including identifying the relevant BITs, checking whether the investor meets the qualifications set forth in such BITs, comparing different provisions on substantive protection and dispute resolution mechanisms and estimating the potential exceptional circumstances are of significant values of reference for investors. When speaking of the timing of restructure investment, he highlighted that “treaty shopping” within a specific scope is permitted. If an investor finishes the investment restructuring before the dispute arises between the host country and the investor, it will not be deemed abuse of procedure. If the dispute can be reasonably foreseen, the investor is expected to cautiously restructure its investment.
Mr. John Choong
The moderator and commentator Dr. Arthur Dong fully agreed on the three speakers’ viewpoints, and shared his own opinions. Based on ever-increasing BITs or Multilateral Investment Treaties, the constant enlargement of the scope of investment protection, and the background of the “Belt and Road” Initiative’s promotion and execution, he shared the application of the “Arbitration without privity” theory in international investment arbitration, clarified the impact of the “De-localization” trend on the concept of “Seat of Arbitration” in international investment arbitration. He also made analysis on whether the Doctrine of Precedent could be applied in investment arbitration, which triggered the audience’s further consideration.
Dr. Arthur Dong
During the Q&A session, the audience had in-depth and beneficial discussion with the speakers on the formation of the arbitral tribunal and the latest development of Beijing Urban Construction Group Co. Ltd. v. Republic of Yemen, the content and features of the third generation BITs, the costs for establishing special purpose vehicles and so forth.
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The Forum
At last, the Forum came to a successful end in the warm applause of the audience.
The BAC In-house Counsel Forum aims to provide an exchange platform for professionals on cutting-edge and hotspot issues within the dispute resolution industry, and endeavors for experience sharing through discussion on practical issues. The BAC sincerely welcomes colleagues interested in diversified dispute resolution to continue to pay attention to and participate in the BAC’s seminars and colloquia. For more information, you are welcome to pay attention to the BAC’s website and WeChat platform.