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Home > Country profiles > China > Articles > Article detail

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Chinese Infrastructure Investment Goes Abroad

Sunday, 10th August 2015

<p>&quot;As Chinese companies expand their operations abroad, especially in the construction and infrastructure sector, they will need to learn and adapt to new legal jurisdictions. This includes restrictions on foreign equity participation in certain sectors or on foreign entity operation of public utilities, national security laws, local content policy, as well as local labor and environmental legislation. Familiarity with this legal landscape and ensuring that they are in full compliance will raise the chances that Chinese infrastructure projects abroad will be successful...<span style="color: #333333; font-family: georgia, serif; font-size: 16px; line-height: 20px">Contractual agreements between companies are typically confidential in nature and not readily disclosed to third parties. That makes it difficult to survey the choice of law and venue for dispute resolution as reflected in the dispute settlement clause of contracts Chinese companies sign for overseas projects. Often, the details of the contract only come to public attention when the project becomes the subject of host government scrutiny or is investigated for alleged misconduct or violations. This was, for instance, the case for the Northrail Project between Chinese SOE China National Machinery and Equipment Corporation (CNMEG, later renamed Sinomach) and Philippine SOE North Luzon Railways Corporation (Northrail). The project aimed to develop a railway service to link the Philippine capital Manila with nearby provinces to the north (on Luzon Island). The infrastructure project was later suspended and then ultimately cancelled due to alleged corruption and a failure to comply with competitive bidding as required by the government procurement process. In the contract&rsquo;s supplementary agreement, UNCITRAL arbitration rules was the choice of law and the Hong Kong International Arbitration Centre (HKIAC) was the choice of venue. This could signal general acceptance of UNCITRAL rules and recognition of HKIAC as a neutral and able venue for resolving contractual disputes.&quot;</span></p><p>Select the link to read this article in full.&nbsp;</p><div><br /></div>

Language: English
Contact: Lucio Blanco Pitlo III

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