The case of Ping An Insurance v. Belgium involved Chinese insurance giant Ping An’s multi-billion euro investment in Belgian-Dutch financial company Fortis in 2007-2008. When Belgium nationalized and sold parts of Fortis during the 2008 financial crisis, Ping An claimed treaty violations. An ICSID tribunal ultimately found it lacked jurisdiction under the China-Belgium BITs. The case highlights issues of temporal application of BIT provisions and treaty shopping. Despite the legal loss, China’s appetite for overseas investment remains strong.
Majority acquisition of Fortis Bank by Belgian authorities during 2008 financial crisis
In 2007-2008, Ping An acquired around 4.8% shares in Fortis for over €2 billion, becoming a major shareholder. When liquidity issues hit Fortis’ banking arm in 2008, Belgium nationalized it and later sold 75% stake to BNP Paribas. Ping An claimed Belgium breached obligations like fair & equitable treatment during this process. The events occurred before the 2009 China-Belgium BIT took effect, so jurisdiction hinged on whether the new treaty covered pre-existing disputes.
Ping An’s reliance on favorable arbitration provisions in 2009 BIT
Ping An relied on the 2009 BIT for jurisdiction, while basing claims on the 1986 BIT’s substantive protections. The 2009 BIT expanded arbitration to all disputes, whereas the 1986 BIT limited it to compensation amounts.Ping An argued the 2009 BIT excluded only disputes already under judicial/arbitral process pre-2009. Belgium countered the 2009 BIT requires disputes to arise after its entry into force.
Tribunal’s decision on non-retroactivity of 2009 BIT’s jurisdiction clause
The tribunal noted substantive treaty provisions aren’t retroactive without clear intent. It found the 2009 BIT’s jurisdiction clause also wasn’t retroactive – its general language didn’t override the presumption against retroactivity. Allowing arbitration over pre-2009 disputes would substantially differ from the 1986 BIT and risk abusive treaty shopping.
Implications for investors and future China BIT practice
The Award underscores careful examination of temporal scope of successive BITs is needed when structuring claims. However, it doesn’t markedly dampen foreign investment enthusiasm in China. The Chinese government continues negotiating improved market access and protection in new-generation BITs and FTAs. But it remains cautious about retroactive application of treaties to existing investments.
The Ping An v. Belgium case demonstrates transitional BIT provisions can substantially impact jurisdiction over investment claims. Chinese investors abroad still face complex legal risks. But with accumulate experience and improving treaty networks, their ability to structure investments and resolve disputes will keep strengthening.