Chinese insurer files first international arbitration claim

China’s second largest insurance company, Ping An has filed an international arbitration claim against Belgium in an attempt to recoup losses from the company’s investment in the now defunct financial services group Fortis.

It is the first time a claim has been made by a mainland Chinese company to the International Centre for Settlement of Investment Disputes (ICSID).

Back in 2009, Ping An had a 4.8% stake in Fortis Holdings when the group was sold to BNP Paribas, and issued a statement saying: “We believe that the dismantlement of Fortis, which wasn’t approved by shareholders, violates corporate governance procedures and destroys shareholder value.”

At the time of the sale, Fortis Holdings was under the control of governments in Luxembourg and Belgium. Ping An then threatened to commence ICSID arbitration proceedings, and the arbitration community has since been waiting to see if the company would act.

Eversheds partner Andy Moody said: “This case may turn out to be the first of many future claims commenced by Chinese investors as they increasingly make investments outside China and recognise that they may be able to use bilateral investment treaties to help protect those investments against government interference or expropriation.”