Author(s)

Xiangxiu Wang, Yawen Zhang

Corresponding Author

Xiangxiu Wang

Abstract

The case of "Beijing Urban Construction Group v. Yemeni Government" concerning jurisdiction is the first case in which China, as an applicant, initiated arbitration to ICSID arbitration tribunal and won the jurisdiction. Especially, the nature of the Chinese party as a state-owned enterprise is special and more representative. Through this case, three elements of ICSID jurisdiction are emphatically analyzed. The following points are analyzed one by one, i.e., whether the investor (i.e. the commercial nature of Chinese state-owned enterprises) is qualified, whether the state-owned enterprises, especially the state-owned enterprises under the socialist market economic system with Chinese characteristics have the investment behavior meeting the prescribed criteria, whether they are obliged to perform the legal procedures of the domestic laws of the host State, the standard of interpretation of disputes in the agreement between both parties involved, the issue of expropriation and compensation, (most-favored-nation status) MFN in bilateral investment protection treaties and the distinction between claims in basic transaction contracts and claims in treaties. Finally, it is suggested that the Umbrella Clause, the Fork-in-the-road Clause should be stipulated in the bilateral investment protection agreement, and the investment subject status of Chinese state-owned enterprises should be clearly affirmed.

Keywords

ICSID jurisdiction, state-owned enterprises, transnational investment, dispute settlement