On Territoriality and International Investment Law: Applying China’s Investment Treaties To Hong Kong And Macao
To date, investor-state tribunals have been preoccupied with a range of issues revolving around the territorial application (territoriality) of international investment agreements (IIAs). The importance, as well as the various forms such issues take, has recently been highlighted in the decision of the Singapore High Court (SGHC) in Laos v. Sanum. In this case, the SGHC was asked by Laos to set aside an earlier arbitral award (in Sanum v. Laos), filed by a Macanese legal entity and rendered under the China-Laos bilateral investment treaty (BIT). In approaching the matter, the SGHC set aside the award on the grounds that the China-Laos BIT did not extend to Macao. This decision has provoked mixed feelings, as it may weigh heavily against the territorial application of Chinese IIAs to Hong Kong and Macao. At the same time, from an academic perspective, the decision provides an opportunity to delve deeper into the territorial elements inherent to jurisdiction ratione personae as this pertains to international investment law. Within this setting, this article seeks to provide a conceptual framework for analyzing future investor-state arbitration disputes under IIAs where similar territorial application issues may arise. This article is nevertheless limited to issues of jurisdiction ratione personae. Therefore, the territorial nexus of investments, particularly as it pertains to cases involving sovereign bonds, is not addressed in this article. In addition, this article does not intend to address territorial issues connected to the so-called nationality planning and treaty shopping techniques as well as the various approaches followed in piercing the corporate veil of foreign investors. To be more precise, while this article deals with issues of jurisdiction ratione personae in general, it mainly focuses on the nationality of legal entities to the extent it relates to the notion of territory.