Frustrated Chinese Investors in the OPC & OEPC v. Republic of Ecuador

Abstract

Chinese Investor brought forty percent of property interest of an Ecuadorian Oil Participation Contract owned by a Canadian oil company. The interest was entitled by two American oil companies, who afterwards transferred to the Canadian. The Ecuadorian government rejected the transfer, and terminated the participation contract. The American investors disagreed, and claimed for compensation. The international investment tribunal in Washington D.C. issued award in favor of two American investors, but set aside the Chinese investor’s interests. It is concluded that Chinese investors are under the protection of the Ecuador-China Bilateral Investment Treaty (BIT) instead of the U.S.-Ecuador BIT. However, Chinese investors have no right to apply for ICSID arbitration but an ad hoc arbitration instead under Ecuador-China BIT.