At 1 pm on November 15, 2012, Associate Professor of the Institute of International Law of Wuhan University, in the 317 Teaching and Research Section of the School of Law, brought a lecture salon to the teachers and students of the International Law Institute entitled "NEVER WAKE A SLEEPING DRAGON: ON THE JURISDICTION ISSUE OF THE FIRST ICSID CASE AGAINST CHINA, whose host is Professor Nie Jianqiang.

Teacher Lai first briefly introduced the background and significance of the topic. China, as a party to the Convention on the Settlement of Investment Disputes between States and Others (the "Washington Convention") and the second countries with the largest number of bilateral investment agreements, has always been more cautious in the exercise of jurisdiction over ICSID until 2011. On May 24th, ICSID accepted the first case of the Chinese government as the respondent - Ekran Berhad v. People's Republic of China, a Malaysian company filed an arbitration application with ICSID for disputes over land use rights with the Chinese government. As the first case in which the Chinese government was sued in ICSID, Mr. Qi believes that this case is of great research value and will have a profound impact on the formulation of China's bilateral investment agreement in the future. His research focuses on the problems in the exercise of ICSID jurisdiction in this case.

Then, Mr. Qi introduced the basic facts of the case and the current progress. SMCAC, a subsidiary of Ekran Malaysia, signed a land lease contract with the Hainan Provincial Government of China in 1993 and transferred the land use right. However, since SMCAC did not develop the land according to the contract, the local government have withdrawn the land use rights according to the provisions of the relevant land law and thus caused disputes. Although ICSID accepted the case in May last year, the current progress is still unknown.

Then, Mr.Qi focused on analyzing the disputes in the exercise of ICSID jurisdiction in this case. He believes that the jurisdictional dispute in this case focuses on two uncertainties, the interpretation of the scope of the Consent Clause and the understanding of the application of the MFN Clause. There are two points that are particularly worthy of attention regarding the terms of consent. First, according to our traditional understanding, certain disputes mentioned in the relevant provisions of the bilateral investment agreement between China and Malaysia are submitted to international arbitration. “The dispute relating to the amount of compensation” refers to disputes related to the amount of compensation can only be submitted to international arbitration. Submitting international arbitration, but currently international arbitration institutions are increasingly inclined to make a broad interpretation of “relating to”, which makes it possible to include investment-related disputes more in the jurisdiction, not just disputes with compensation amounts. This will put China in a more disadvantageous position. Secondly, Article 25, paragraph 4, of the Washington Convention provides a system for notification of ICSID arbitration for disputes, but the academic nature of the notification is still controversial. Teacher Qi believes that the legal effect of Notification is not so strong, that is, it does not constitute a reservation and withdrawal of the treaty, but it has certain legal effect, which is reflected in the fact that Notification has the function of providing supplementary information. The applicable dispute regarding the MFN clause is mainly reflected in the problem that whether we should interpret the MFN clause as having only the meaning of guaranteeing substantive rights or extending to the convenience of providing procedures. Teacher Qi proposed that the analysis should be conducted in conjunction with the previous practice of the arbitral tribunal. Although the arbitral tribunal's various rulings on the relevant cases are not consistent, there are still rules to follow. In the case of merely excluding procedural obstacles, the arbitral tribunal tends to recognize the procedural significance of the MFN clause; however, if the parties do not reach a clear agreement on the dispute settlement in the agreement, the arbitral tribunal tends to reject the MFN clause to be applicable in terms of procedures.

Finally, the paint teacher made a summary and prospect. In the case, Mr. Qi believes that the case is ultimately more likely to end in a negotiated settlement between the two parties. The more important revelation of this case is that in the future, China should use more standardized and rigorous language in the process of negotiating bilateral investment agreements to avoid ambiguity and vagueness. How China chooses a more balanced investment policy in capital input and capital output is also worth thinking about. After the report, Professor Zhang Qinglin and Associate Professor Shi Lei conducted in-depth exchanges on the legal effects of “Notification.” Associate Professor Xu Xiang expounded his views on the terms of the treaty and the agreement. Professor Huang Zhixiong also contributed to the case by raising significant views. The report ended in a lively discussion. (China International Law Network correspondent: Wu Fang)