PRC Investment Treaty Programme

PRC Investment Treaty Programme Emmanuel Jacomy 易傑明律师 19 October 2016

The Past 2

Article 8(3) of the 1985 China Denmark BIT If a dispute involving the amount of compensation resulting from expropriation mentioned in Article 4 cannot be settled within six months after resorting to the procedure specified in Paragraph 1 of this Article by the national or company concerned it may be submitted to an international arbitral tribunal established by both parties. 3

First generation Sources: UNCTAD (2016); MOFCOM (2016); OUP (2009) Copyright Shearman & Sterling LLP 4

Article 9(3) of the 1994 China Iceland BIT If a dispute involving the amount of compensation for expropriation cannot be settled within six months after resort to negotiations as specified in paragraph 1 of this Article, it may be submitted at the request of either party to the International Centre for Settlement of Investment Disputes (ICSID) or to an-ad hoc arbitral tribunal. [...] 5

First generation Sources: UNCTAD (2016); MOFCOM (2016); OUP (2009) Copyright Shearman & Sterling LLP 6

First generation Second generation Sources: UNCTAD (2016); MOFCOM (2016); OUP (2009) Copyright Shearman & Sterling LLP 7

Articles 9(1) 9(3) of the 2003 China Germany BIT (1) Any dispute concerning investments between a Contracting Party and an investor of the other Contracting Party should as far as possible be settled amicably between the parties in dispute. (2) If the dispute cannot be settled within six months on the date when it has been raised by one of the parties in dispute, it shall, at the request of the investor of the other Contracting State, be submitted for arbitration. (3) The dispute shall be submitted for arbitration under the Convention of 18 March 1965 on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID), unless the parties in dispute agree on an ad-hoc arbitral tribunal to be established under the Arbitration Rules of the United Nations Commission on the International Trade Law (UNCITRAL) or other arbitration rules. 8

First generation Second generation Sources: UNCTAD (2016); MOFCOM (2016); OUP (2009) Copyright Shearman & Sterling LLP 9

First generation Second generation Third generation Sources: UNCTAD (2016); MOFCOM (2016); OUP (2009) Copyright Shearman & Sterling LLP 10

The Present 11

First generation Second generation Third generation Sources: UNCTAD (2016); MOFCOM (2016); OUP (2009) Copyright Shearman & Sterling LLP Sources: UNCTAD (2016); MOFCOM (2016); OUP (2009) 12

First generation Second generation Third generation Fourth generation Sources: UNCTAD (2016); MOFCOM (2016); OUP (2009) Copyright Shearman & Sterling LLP Sources: UNCTAD (2016); MOFCOM (2016); OUP (2009) 13

2012 China Canada BIT Definition of investment (objective criteria, negative definition) 14

2012 China Canada BIT 15 4. covered investment means, with respect to a Contracting Party, an investment in its territory of an investor of the other Contracting Party existing on the date of entry into force of this Agreement or an investment of an investor admitted in accordance with its laws and regulations thereafter, and which involves the commitment of capital or other resources, the expectation of gain or profit, or the assumption of risk; but investment does not mean: (k) claims to money that arise solely from (i) commercial contracts for the sale of goods or services, or (ii) the extension of credit in connection with a commercial transaction, such as trade financing, other than a loan covered by sub-paragraph (d); or (l) any other claims to money,

2012 China Canada BIT Definition of investment (objective criteria, negative definition) FET and FPS pegged to minimum standard of treatment 16

2012 China Canada BIT Definition of investment (objective criteria, negative definition) FET and FPS pegged to minimum standard of treatment MFN not applicable to dispute resolution provisions 17

2012 China Canada BIT Definition of investment (objective criteria, negative definition) FET and FPS pegged to minimum standard of treatment MFN not applicable to dispute resolution provisions Exclusion of taxation matters 18

2012 China Canada BIT Definition of investment (objective criteria, negative definition) FET and FPS pegged to minimum standard of treatment MFN not applicable to dispute resolution provisions Exclusion of taxation matters Restrictive definition of expropriation 19

2012 China Canada BIT 3. Except in rare circumstances, such as if a measure or series of measures is so severe in light of its purpose that it cannot be reasonably viewed as having been adopted and applied in good faith, a non-discriminatory measure or series of measures of a Contracting Party that is designed and applied to protect the legitimate public objectives for the well-being of citizens, such as health, safety and the environment, does not constitute indirect expropriation. 20

2012 China Canada BIT Definition of investment (objective criteria, negative definition) FET and FPS pegged to minimum standard of treatment MFN not applicable to dispute resolution provisions Exclusion of taxation matters Restrictive definition of expropriation Denial of benefits 21

2012 China Canada BIT Definition of investment (objective criteria, negative definition) FET and FPS pegged to minimum standard of treatment MFN not applicable to dispute resolution provisions Exclusion of taxation matters Restrictive definition of expropriation Denial of benefits General exceptions (cultural industries, environment, prudential measures, etc.) 22

2012 China Canada BIT Definition of investment (objective criteria, negative definition) FET and FPS pegged to minimum standard of treatment MFN not applicable to dispute resolution provisions Exclusion of taxation matters Restrictive definition of expropriation Denial of benefits General exceptions (cultural industries, environment, prudential measures, etc.) Detailed dispute resolution provisions 23

2012 China Canada BIT 24

2013 China Tanzania BIT Definition of investment (objective criteria, negative definition) FET and FPS pegged to minimum standard of treatment MFN not applicable to dispute resolution provisions Exclusion of taxation matters Restrictive definition of expropriation Denial of benefits General exceptions (cultural industries, environment, prudential measures, etc.) Detailed dispute resolution provisions 25

The Future 26

First generation Second generation Third generation Fourth generation Sources: UNCTAD (2016); MOFCOM (2016); OUP (2009) Copyright Shearman & Sterling LLP Sources: UNCTAD (2016); MOFCOM (2016); OUP (2009) 27

Algeria Brazil Chile Ecuador Kazakhstan Kyrgyzstan Mongolia Sudan Tajikistan Venezuela Zambia Australia Nigeria Peru South Africa Uzbekistan N. Eliasson, The Chinese Investment Treaty Programme, Jurisdictional Challenges and Investment Planning, in W. Shan (ed.), China and International Investment Law, 2015 28

We should speed up investment facilitation, eliminate investment barriers, and push forward negotiations on bilateral investment protection agreements and double taxation avoidance agreements to protect the lawful rights and interests of investors. MOFA and MOFCOM, Action Plan on the Belt & Road Initiative, 28 March 2015 29

PRC Investment Treaty Programme Emmanuel Jacomy 易傑明律师 19 October 2016