Research On The Qualification Of State-owned Enterprises In ICSID Arbitration

The International Center for the Settlement of Investment Disputes(hereinafter referred to as “ICSID” or “Center”)arbitration is based on the “Convention on the Settlement of Investment Disputes Between States and Nationals of Other States” which is also called “Washington Convention”(hereinafter referred to as “Convention”).The purpose of the ICSID is to arbitrate the dispute between an investor and a state.According to the article 25 of Convention,the basic requirements for ICSID jurisdiction including the nature of the dispute is appropriate,the parties to the dispute are eligible and the parties to the dispute agree.State-owned enterprises are often regarded as agents of the state because of their national attributes.Therefore,it is highly likely that state-owned enterprises will not be eligible to submit arbitration requests in ICSID because they are considered as national investors.But as stated by Mr.Broches,who played a central role in the conception and negotiation of the ICSID Convention,“a State-owned entity should not be disqualified as a ‘national of another Contracting State’ unless it is acting as an agent for the government or is discharging an essentially governmental function.”What’s more,the consent of the parties is also one of the prerequisites for the qualification of ICSID arbitration.The consent always provided in the Bilateral Investment Treaty(BIT)or International Investment Agreement(IIA).Although it is rare for Chinese state-owned enterprises to apply for arbitration to ICSID,the role of ICSID cannot be ignored.Especially with the Beijing Urban Construction Group Co.Ltd.won the jurisdiction phase of ICSID arbitration,it is bound to arouse the interest of Chinese state-owned enterprises in ICSID arbitration.The purpose this paper is to solve the problem of ICSID arbitration in China’s state-owned enterprises in order to provide some help to the settlement of the overseas investment dispute of Chinese state-owned enterprises.