Title: The Standing of State-owned Enterprises under the ICSID Convention: A Chinese Perspective

Authors: Wang Qing, Xu Lai, Ling Fanghao, Huang Ruotian, Bai Qianqian, He Kaiye, Sun Jiaxuan

Abstract: In recent years, Chinese State-owned enterprises (SOEs) involved in foreign investment have become the subject of increased foreign scrutiny. Within International Centre for Settlement of Investment Disputes (ICSID) arbitration, this scrutiny has manifested in challenges to the standing of SOE claimants questioning whether they are eligible “nationals”. To date, ICSID tribunals have developed two different methods of assessing these challenges, namely the Broches test and the application of attribution rules within the International Law Commission (ILC)’s Draft Articles on Responsibility of States for Internationally Wrongful Acts. This inconsistent arbitral practice, as well as drawbacks of the Broches test, suggests that a combination of both standards would be a more optimal approach. Regarding Chinese SOE investors, further reform of Chinese SOEs and explicit inclusion of SOEs within the “investor” definitions of bilateral investment treaties (BITs) are advised in order to maximize their overseas protection.

Keywords: State-owned Enterprises, ICSID Convention, Jurisdiction Ratione Personae