Investment treaties as a form of protection for Chinese outbound investors

Chinese outbound direct investment (“ODI”) reached new heights in 2013, and the upward trend looks to continue as Chinese investors inject capital into diverse investments and strategic acquisitions around the world. As Chinese investors continue to look abroad for new opportunities and increase the size of their investments abroad, it is increasingly important for them to understand and take advantage of the international legal tools potentially available to protect those investments against interference by host State governments. In a detailed briefing note, we provide an overview of the core principles of international investment law, and of the mechanisms that Chinese investors can employ to help protect their investments.  If you wish to discuss, please contact Jessica Fei, Brenda Horrigan or May Tai.

Upcoming Webinars

There are a number of upcoming webinars which are likely to be of particular interest to clients from across the Asian region.

  • Negotiating the challenges of Myanmar – Thursday, 27 June 2013

In this webinar Herbert Smith Freehill’s Myanmar practice group looks at the opportunities and challenges for companies investing in Mynamar. The speakers will discuss, amongst other issues, the current regulatory environment for foreign investment and some practical challenges and risk management issues as regards market entry in the region.  Please click here for further information on the webinar and how to register.

  • What value your BIT protection now? – withdrawals, annulments and refusal to enforce, 4 July 2013

This webinar is provided by Herbert Smith Freehill’s global arbitration practice and is the second in a series focusing on Bilateral Investment Treaties following on from the successful introductory seminar ‘A Beginner’s Guide to BITs: What are they and why do you need them?’ in April.  The panel will consider what the impact of the backlash against investment arbitration has been and how it will affect investors in the years to come. What does it mean for the Bilateral Investment Treaty protection that many have come to rely on when structuring an investment or venturing into a new market?  Please click here for further information on the webinar and how to register.

  • Enforcing arbitration awards on the fringes of EMEA, 12 July 2013

The focus of this webinar will be on local advice in relation to enforcement of arbitration awards in each of the regions encompassed within EMEA, namely Europe, the Middle East and Africa, using the experience and insight of our partners who cover these regions. Please click here for further information on the webinar and how to register.

China-Taiwan Bilateral Investment Protection Agreement: dispute resolution mechanisms exclude international arbitration

On 9 August 2012, after two years of negotiation, Mainland Chinese and Taiwanese negotiators signed the Cross-strait Bilateral Investment Protection and Promotion Agreement (“IPA“).  The IPA is expected to promote cross-strait economic exchanges, and to attract more Mainland Chinese investors into Taiwan and vice-versa.  Given the sensitivity of cross-strait relations (China does not recognise Taiwan as an independent state), the IPA does not expressly incorporate international arbitration in the list of dispute resolution mechanisms available under the agreement – despite Taiwan having pressed for its inclusion. However, there are a number of other dispute resolution mechanisms, including mediation, available to investors under the IPA.

Please click here to read our post on our Arbitration blog.

Bilateral Investment Agreement signed between Iraq and Japan on 7th June 2012

A bilateral investment agreement or treaty (BIT) between Japan and Iraq was signed on 7th June 2012. This is the first BIT between Iraq and a major economy and is a significant and credible commitment by Iraq to the rights of foreign investors falling within the BIT’s protections.  The BIT will enter into force 30 days after diplomatic notes are exchanged between the two governments confirming necessary national legal steps have taken place.  Please click here to read our post on our Arbitration blog.

Trilateral Investment Agreement signed by China, Japan and South Korea

On 13 May 2012, China, Japan and South Korea signed the Agreement among the Government of Japan, the Government of the Republic of Korea and the Government of the People’s Republic of China for the Promotion, Facilitation and Protection of Investment (“Trilateral Investment Agreement“).  The Trilateral Investment Agreement is the first legal framework between the three East Asian nations regarding investment and once in force, aims to enhance and protect investments made trilaterally, whilst also paving the way for a potential Free Trade Agreement between China, Japan and Korea.  A copy of the Trilateral Investment Agreement can be found here.  Please click here to read our post on our Arbitration blog.

India liable under BIT for extensive judicial delays

An UNCITRAL tribunal in Singapore has held that the Republic of India breached its obligation under the India-Kuwait bilateral investment treaty (“BIT“) to provide investors with an “effective means of asserting claims and enforcing rights” through undue delay in the Indian court system.  White Industries Australia Limited (“White“) had spent nine years attempting to enforce an ICC Award in India, but was subjected to prolonged delays.  It therefore brought a claim under the Australian–Indian BIT but successfully relied on the BIT’s “most-favoured nation” clause to take advantage of the more favourable investor protections in the India-Kuwait BIT.  Please click here to read our post on our Arbitration blog.