Investments overseas, especially in politically unstable countries, may be exposed to the adverse effects of unpredictable actions or omissions of the host government. Political risk insurers can help manage these risks by providing coverage for certain losses related to political causes. If the insured investor's loss satisfies the relevant terms and conditions under its insurance contract, the insurer will compensate the insured accordingly. By increasing confidence and reducing uncertainty in investment planning, the availability of political risk insurance (PRI) in a risky developing country helps investors obtain funding for insured investments and the host state attract more investment, thereby supporting the economic interests of all parties involved. In addition to this contractual arrangement, investors and their investments may be protected by and entitled to compensation under an investment treaty. Thus, on the road to recovering losses from government wrongdoing, PRI providers and insured investors may have to deal with the complicated interplay between insurance and investment treaty regimes.

This chapter will discuss how insurance contracts governed by applicable national law and investment treaties governed by public international law principles may differ on the protections available for risks and losses, and how claims are assessed. These differences are highlighted in the example of expropriation. If an investor is successful with an insurance claim, the insurer may want to recover the compensation paid and consider either stepping into the shoes of the investor to itself claim against the host state in an investment arbitration, which may involve complicated problems with bilateral investment treaty (BIT) subrogation clauses and issues of standing, or making other arrangements so that the investor can pursue investment arbitration and pass the ultimate benefits to the insurer.

I an introduction to the political risk insurance market

Political risks are those associated with government actions or omissions that deny or restrict the right of an investor to use or benefit from the investor's assets, or that reduce the value of the investment.2 According to the MIGA-EIU Political Risk Survey 2013, political risk ranks second place, after economic concerns, among the most important concerns for investors making foreign direct investment in developing economies.3 The top two political risks that worry investors in developing economies are adverse regulatory changes in the host state and a breach of contract by the state.4 An example of the adverse regulatory change includes the Tanzanian government's introduction of new regulations in 2017 to ban foreign exports in the natural resources sector.

Political risk insurers commonly provide coverage to protect against losses that arise from five types of risks: expropriation, transfer restrictions, political violence, arbitral award default (in relation to a breach of contract) and denial of justice.

There are three main types of PRI providers: (1) public state-sponsored providers, such as the Overseas Private Investment Corporation (OPIC), a governmental agency backed by the full faith and credit of the United States, and China Export & Credit Insurance Corporation (Sinosure), a company funded by the Chinese government with the purpose of promoting foreign trade and economic cooperation; (2) multilateral providers, such as the Multilateral Investment Guarantee Agency (MIGA) of the World Bank, the Asian Development Bank and the African Trade Insurance Agency; and (3) private providers, such as Sovereign Risk Insurance of Bermuda and the American International Group of the United States. In the Berne Union – a leading association for the global export credit and investment insurance industry with 84 members (including OPIC, Sinosure and MIGA) – public providers dominate the PRI market in overall amounts insured because of the availability of enormous funding support provided by its sovereign sponsors.5

According to a Berne Union survey, the investment insurance cover provided by its members to new business totalled US$64 billion for 2017, which showed a notable fall versus 2016 levels. The Association of Southeast Asian Nations, the Commonwealth of Independent States and Latin American countries account for 20 per cent each of new business, with the top five countries by business volume being Kazakhstan, Vietnam, Indonesia, China and Uzbekistan. A total of US$232 million was paid by its members under investment insurance policies in 2017 – the most on record for any single year. This figure is dominated by a single recovery claim for political violence in Libya, followed by another recovery in the amount of US$11 million in relation to a claim in Turkey.6 Marking its 30th year of operation, MIGA issued a record US$5.3 billion in political risk insurance and credit enhancement guarantees in 2018.7

As Chinese outbound investments have been robust in recent years, especially in infrastructure projects in developing countries, Chinese investors are increasingly facing political risks in those countries. For example, in 2011, tens of thousands of Chinese nationals were evacuated after a civil riot broke out in Libya, and Sinosure paid compensation of 490 million yuan for 29 companies that suffered losses in the riot.8

It is apparent that PRI has become a useful tool for managing risks to outbound investments in politically unstable economies.

II insurance claims versus investment treaty arbitration claims

Insurers will have their own governing policies for the terms of coverage for the five most common types of risks:

  1. expropriation (government acts that deprive the investor of ownership or control rights to its investment);
  2. transfer restrictions (to transferring currency or converting currency at the reference rate of exchange);
  3. political violence (the destruction or disappearance of tangible assets, or the total inability of the investor to conduct operations as a result of violent political or military acts);
  4. arbitral award default (where the government is not complying with an arbitral award against it in cases where it was found to breach a contract with the investor); and
  5. denial of justice (an inability to obtain an award as a result of government acts that render the dispute resolution procedure specified in the contract impossible or impracticable).

From a review of publicly available OPIC arbitral awards and claims determinations, it appears that the precise terms of each insurance contract are negotiated and tailored according to the circumstances of the investment.9

The scope of protection and compensation for loss may be different under a PRI policy and under an investment treaty. Insurance policies exist in the ambit of contract law so the terms and conditions for successful claims and compensation from the insurer are defined by the contract, and interpreted in accordance with its applicable law. As these types of losses arise from government conduct, the investor may also have protected rights and claims under an investment treaty; these claims are assessed on the basis of treaty provisions, in accordance with international law. Thus, the scope of protection available to the investor and the investor's ability to be compensated under a PRI policy may not overlap completely with that under an investment treaty. For example, a loss that could be successfully claimed on the basis of the fair and equitable treatment (FET) principle under a treaty may not be covered by a PRI policy. Also, arbitral award default coverage is unique to PRI policies.

The difference and interaction between the two regimes can be seen in the course of claims determination. Some contracts, such as the MIGA draft contracts, provide that the applicable law should be 'general principles of law',10 which may allow for the consideration of principles of public international law. Other contracts, especially that of national PRIs, may provide for the law of the home state; for example, Sinosure's policy provides that all disputes between the insured and Sinosure shall be resolved before the China International Economic and Trade Arbitration Commission in accordance with Chinese law. A local law may not be as developed, or may even be silent, on certain issues that may find a resolution by applying the more developed jurisprudence of public international law; for example, indirect expropriation. However, the role of public international law in claims determinations under insurance contracts will depend on whether local laws allow for its consideration. Where international law was necessary to resolve a dispute but was restricted from applying by the domestic applicable law, tribunals have in the past invoked the idea of an 'international contract' and stated that it was 'necessary to resort to the general principles of law and to apply them' to resolve the dispute.11 An interplay also happens when the contractual terms of a PRI policy refer expressly to a particular BIT to define the scope of coverage; for example, a PRI policy provides that it covers losses as a result of taxes imposed in violation of the FET requirement under a BIT. Given the complexity of the issue, there will be uncertainties as to how international law principles will be applied by local tribunals.

A review of the OPIC claims determinations published on their website reveals OPIC taking a textual approach to interpreting the insurance contract, as is to be expected. These claim determinations did not involve in-depth discussions about public international law. However, an investor dissatisfied by a rejected claim may instigate commercial arbitration proceedings against OPIC, and the tribunal may treat the international law principles relating to the claim differently to OPIC. For example, in the case of Revere, OPIC determined the investor's actions were the real cause of its loss and the investor was still in control of its assets; however, the tribunal held that the investor's control was no longer effective because it could not continue to make certain business decisions.12

An insurer may wish to be aware of all the nuances of public international law when it drafts its insurance contract and creates guidelines on claims determination. The insurer would then, in turn, be aware of how its own claims determinations may be aligned with or differ from the way (1) a commercial arbitration tribunal might assess an insurance compensation claim under a contract; and (2) an investment arbitration tribunal might assess a treaty claim against the host government at international law. This awareness would help the insurer make an informed decision about defining the scope of its mandate, and avoid, if it wishes to, the likely divergent results it may face in another forum for particular issues. The insurer will also have a clearer idea about which kinds of claims would be likely to be successful at treaty arbitration and are worth pursuing.

III expropriation – insurance contract terms versus international law

The differences between PRI policies and treaty protection can be seen, for example, in claims assessment for loss resulting from expropriation.

One of the requirements for finding expropriation is an interference by a host state causing the substantial loss of control or economic value of a foreign investment. International law and insurance contracts may differ on the level of deprivation required.

Some contracts contain a sufficiently detailed definition that resembles the widely accepted international law standard of 'total or substantial deprivation'.13

For example, MIGA's draft guarantee for equity investments refers to:

any executive or administrative action or omission, or any legislative action . . . in one or a series of events attributable to the Host Government that directly or indirectly Causes: (a)(i) the Guarantee Holder to be (x) deprived of its ownership rights in, or effective control of, all or a substantial portion of the Guaranteed Investment, or (y) otherwise effectively deprived of all or substantially all economic value of the Guaranteed Investment; or (ii) the Project Enterprise to be deprived of a fundamental right without which it is not financially viable; provided, however, that the diminution of the Project Enterprise's profit does not in itself constitute such deprivation.14

However, coverage is available on a limited basis for partial expropriation (e.g., confiscation of funds).15 Other contracts may make different stipulations. MIGA's draft guarantee for shareholder's loans provides for deprivation of the insured's material rights as a lender or a creditor, and any deprivation of the insured's repayment funds to constitute expropriation.16 Sinosure's policies provide that partial deprivation may fall within the protection of its various policies.17 This calls into question whether the policies provide wider protection than investment treaties. However, Sinosure's policies may tailor their coverage to a limited scope of the government acts.

MIGA's reference to 'a series of events' (see above) also provides coverage for creeping expropriation. Sinosure's policies do not make such an express reference so it may not provide coverage for creeping expropriation.

As another example of the difference between insurance policies and international law, MIGA excludes from its expropriation coverage 'a bona fide, non-discriminatory measure of general application that governments normally take for the purpose of regulating economic activity, ensuring public safety, raising revenues or protecting the environment' so long as this measure is not 'designed by the Host Government to have a confiscatory effect'.18 Recent versions of Sinosure contracts contain similar exemptions. Unlike these contracts, treaties rarely contain such provisions and it is unclear how the scope of these exemptions compares to a state's regulatory power under international law.

Few insurance contract claims determinations discuss international law principles in much depth. An OPIC determination involving expropriation summarised the international law principles and cited jurisprudence that supported its contractual terms, and briefly applied these principles in the determination.19 It further states that the OPIC provision 'comports with customary international law in its recognition of both direct and indirect expropriation'20 and 'reflects a body of international investment law that recognizes the expropriatory effects of state actions that prevent, unreasonably interfere with, deprive, or unduly delay effective enjoyment of an investor's fundamental rights in its investment'.21

In any case, it may be fair to say that insurers have developed insurance policies to be a class of their own, which may or may not correspond to international law standards.

IV Subrogation

Insurers have an interest in recovering compensation paid to the insured, especially when the insured has the right to claim compensation from a host state in another forum. Thus, PRI contracts usually include a subrogation clause, where the insured investor's rights and claims against the host state are assigned to the insurer after payment or with an undertaking to make payment. To seek compensation from a host state in investment arbitration, the PRI provider will also need to rely on a BIT provision that recognises its subrogation right. The next sections will address the subrogation rights provided for in the contract and by operation of an investment treaty. Local laws on subrogation may also operate in the absence of contractual subrogation; however, this chapter will not discuss this.

i Subrogation under contract

A standard contractual subrogation clause may look like this, from MIGA:

MIGA shall be fully subrogated, in the amount of any compensation paid for a Loss, plus interest and expenses, to all claims, causes of action, and other rights of recovery that the Guarantee Holder has against the Host Government, the Project Enterprise, or any other person or entity in respect of such Loss. The Guarantee Holder shall not impair or prejudice MIGA's rights of subrogation.22

ii Recognition of subrogation under a BIT

BITs typically contain a provision expressly obliging the host state of the investment to recognise the subrogation of the investor's rights under the BIT to the home state insurer or its designated agency. However, few BIT provisions cover all insurers, so private PRI providers are usually excluded from the subrogation clause. We consider some examples below.

Many BITs contain subrogation clauses similar to Article 7 of the China–Germany BIT 2003, which states:

If one Contracting Party or its designated agency makes a payment to its investor under a guarantee given in respect of an investment made in the territory of the other Contracting Party, the latter Contracting Party shall recognize the assignment of all the rights and claims of the indemnified investor to the former Contracting Party or its designated agency, by law or by legal transactions, and the right of the former Contracting Party or its designated agency to exercise by virtue of subrogation any such right to the same extent as the investor.

Some BITs provide for the subrogation of insurers generally, including private insurers, with the aim of protecting the different types of providers in the home market. For example, the Netherlands Model BIT 2018 at Article 14 states: '[if] the investment of an investor of a Contracting Party is insured . . . any subrogation of the insurer . . . to the rights of the said investor pursuant to the terms of such insurance or under any other indemnity given shall be recognized by the other Contracting Party.'23 Nearly all the Dutch BITs contain such a subrogation clause.24 The Norway Model BIT (draft) 2015 also states: '[if] the investments of an investor are insured against non-commercial risks, any subrogation of the claims of the investor pursuant to this Agreement shall be recognized by the other Party'.25

More interestingly, the Netherlands–Mexico BIT 1998 contains an unusual provision: the subrogation of 'a wholly privately owned and controlled insurance corporation' to the rights of the national (investor) of the same contracting party shall be recognised by the other contracting party and '[o]nly the national or the insurance corporation shall be entitled to exercise such rights and to engage in a dispute with respect to those rights'.26

Some BITs set out the rights of the investor after it subrogates its rights to the insurer. The New Zealand–China Free Trade Agreement (FTA) 2008 provides that 'where a Party (or any agency, institution, statutory body or corporation designated by it) has made a payment to an investor of that Party and has taken over rights and claims of the investor, that investor shall not, unless authorized to act on behalf of the Party or the agency of the Party making the payment, pursue those rights and claims against the other Party.'27 The China–Korea FTA 2015 contains a similar provision and also clarifies: '[f]or greater certainty, the investor shall continue to be entitled to exercise its rights that have not been subrogated.'28

However, the China–Mexico BIT 2008 clearly excludes altogether the availability of arbitration (national or international) for resolving disputes between the subrogee and the other contracting party.29

V the insurer's standing to exercise its subrogation rights in investment arbitration

Where a BIT subrogation clause covers the insurer, the rules of various dispute resolution institutions will determine whether the insurer has standing to bring a claim.

A state-backed insurer may not be eligible to be a party in an arbitration at the International Centre for Settlement of Investment Disputes (ICSID) under the ICSID Convention because ICSID arbitration is only available for investment disputes between a contracting state, or a designated subdivision or agency of the state, and a 'national of another Contracting State' as per Article 25(1).30 As the state-backed PRI provider is usually deemed a governmental entity, it would therefore not be a qualified 'national of another Contracting State'. The drafting history of the ICSID Convention shows that an exception to Article 25(1) was considered in the context of subrogation; however, ICSID deliberately chose to deny party status to an investor's indemnifying state as a procedural matter of standing (but this does not affect the right to subrogation, per se).31

To distinguish private PRI providers from public ones, the tribunal in CSOB v. Slovak Republic confirmed that 'for purposes of the Convention a mixed economy company or government-owned corporation should not be disqualified as a “national of another Contracting State” unless it is acting as an agent for the government or is discharging an essentially governmental function.'32 Thus, the determinative criterion for distinguishing public and private PRI providers is whether they administer the PRI system on behalf of the investor's home state.33 While some say 'financial dependence' on the host state is a criterion for disqualification from being a 'national of another Contracting State',34 others say ownership or control of the government will not, alone, disqualify an entity.35 As Sinosure is a state-owned and policy-oriented enterprise, its qualification as 'investor' under the ICSID Convention will be subject to challenge.

If ICSID arbitration is not available, given an effective subrogation clause in the BIT, the state-backed insurer may nevertheless have recourse to ad hoc arbitration if allowable under the relevant arbitration rules. For example, the UNCITRAL Arbitration Rules do not contain a definition of 'investor' and do not reject subrogation rights.36 Interestingly, in addition to the subrogation clause, Annex C of the draft Norway Model BIT 2015 further states that if an insurer does not have legal standing under Article 25(1) of the ICSID Convention, the contracting parties consent to submission by an insurer of a dispute to arbitration under the UNCITRAL Arbitration Rules, but that the procedural rules of ICSID shall apply.37

A private PRI provider covered by a BIT subrogation clause (such as the Dutch and Norwegian BITs) has standing to be a party to an ICSID proceeding in conformity with Article 25(1) of the ICSID Convention. However, many BIT subrogation clauses do not provide for the private PRI, so investment arbitration, at ICSID or otherwise, would nevertheless be unavailable.

VI specific agreements with host states to recognise and exercise subrogation rights

Some public PRI providers will only issue an insurance contract if the host state of the investment meets certain conditions. For example, OPIC may not offer insurance for a project in a country with which the United States does not have an investment agreement,38 and it must determine that 'suitable arrangements' exist for protecting its interest, including its right to subrogation.39 These conditions are fulfilled in the form of an investment incentive agreement or investment guarantee, which provides for ad hoc interstate arbitration for disputes involving questions of international law.40 There is one case of interstate arbitration where the US government issued a Request for Arbitration to the government of India to claim for damages in excess of US$110 million, which is the amount OPIC compensated the investor.41

MIGA issues guarantees for investments in a Member State (a signatory to the MIGA Convention) that flow from other Member States.42 The signatory member is required under the MIGA Convention to recognise MIGA's right of subrogation;43 however, host states have the right to object to the issuance of a PRI contract. MIGA cannot conclude a contract of guarantee with an investor 'before the host government has approved the issuance of the guarantee by the Agency (i.e., MIGA) against the risks designated for cover', and approval is deemed to have been given unless the member objects within a reasonable period after notification.44 MIGA requires the insurer as subrogee to first engage in settlement negotiations with the member host state.45 Failing a resolution, MIGA may pursue ad hoc arbitration with the host state, which shall be guided by the procedures of the ICSID Arbitration Rules.46

Sinosure, however, does not have a membership programme or any requirements similar to the above for the issuance of a contract. Any potential actions against the host state will be based on the clauses of the relevant BIT.

VII when the insurer is unable to claim in arbitration in its own right

If the insurer cannot resort to the subrogation provisions of the BIT, it may still make the following arrangements to support or compel the investor to first make a claim against a host state with the aim of benefitting the insurer.47 The insurer will also have to make arrangements with the insured on the costs of the arbitration.

i Assignment

The assignment of an ICSID claim from an insured investor to its insurer should be possible if the necessary jurisdictional conditions are fulfilled by the investor first and the assignment occurs after arbitration is instituted. In CSOB v. Slovakia, the investor CSOB assigned its right to claim against Slovakia under a contract to its home state, the Czech Republic, against a monetary consideration, similar in effect to an insurance payout. Slovakia argued that the Czech Republic had become the real party in interest and that it was disqualified from stepping into CSOB's shoes under Article 25(1) of the ICSID Convention. The tribunal noted that standing is a jurisdictional matter determined by reference to the date the proceedings are instituted (CSOB had standing at that date), and as the assignment occurred after that time, the tribunal had jurisdiction to hear the case.48 However, the issue of assignment sometimes refers to a case where it appears that the assignment was engineered to attract jurisdiction that was otherwise lacking. In such a case, a tribunal will likely react more negatively.

ii Directing the investor to make a treaty claim

The insurer could also request the insured investor to pursue its rights under an investment treaty and arrange for the proceeds to pass to the insurer.

The insurer may require that the insured investor 'exhaust' its rights of recourse to proceedings before receiving compensation under insurance. Such a clause would reduce the attractiveness of the policy, and the insured will undoubtedly weigh up the cost of the premiums to be paid to obtain the insurance and its obligations to recover in another forum. Thus, the more common alternative is conditional payment – namely, the insurance policy provides that the insurer will compensate the insured on the condition that the investor pursues its rights of recourse.

Sinosure's policy for equity investments provides that after it pays compensation, the insured is obligated to file claims in its own name against the host state if so requested by Sinosure. Otherwise, Sinosure has the right to refuse to pay further compensation and ask for repayment of the paid amounts.

MIGA's 2018 draft Contract of Guarantee for Equity Investments provides for similar covenants following claim compensation paid to the insured, and clarifies that if it receives any compensation, the insured must hold those proceeds in trust for the benefit of MIGA.49

The relative market power of the insurers and potential investors, and the motivations of the insurer may affect whether the arrangement is more beneficial to the insurer or the insured, and account for different approaches among PRI providers.

A potential problem may arise against the investor's right to claim in investment arbitration (for the insurer's benefit) when it also has a right to compensation from an insurance provider. The tribunal in Hochteif v. Argentina stated that the insurance payment Hochteif received from the German Government's Federal Guarantees for Direct Investments in Foreign Countries programme should not be deducted from the amount due to Hochteif from Argentina as awarded. The tribunal remarked that the insurance payment 'does not reduce the losses caused by Respondent's actions in breach of the BIT' and there is no principle of international law that 'requires that such an arrangement . . . should reduce Respondent's liability'.50 The tribunal further recognised that the investor itself paid for the insurance arrangement with a third party (the insurer), and the investor may be obliged to hand over the damages recovered, but that was a matter of private contract into which the tribunal has no cause to enquire.51 In Glencore Finance v. Bolivia, where the investor claimed that the host state expropriated its metal mining plants and a mine, the respondent argued that if the tribunal were to award compensation to the claimant, any compensation already received by the claimant from its political risk insurer – which was caused by the same underlying facts – shall be offset from the amount awarded to the investor.52 The case is ongoing and it remains to be seen whether this argument will find any support by the tribunal.

After initiating an UNCITRAL investment treaty proceeding against Colombia in March 2017 pursuing over €1.3 billion in defaulted electricity payments, the Spanish energy company Naturgy reportedly filed in June 2018 an arbitration claim against its political risk insurer after the latter opted not to pay out on the default for over €400 million.53 It remains unclear whether and how these coexisting claims interact.

iii An agreement with the host state regarding the investor

To prevent the type of challenge against investors discussed in Hochteif, some BITs contain a provision that indemnification by a third party would not affect the investor's rights of recourse to arbitration (at ICSID or otherwise).

For example, the Canada–China BIT 2012 provides that 'a disputing Contracting Party shall not assert, as a defence, counterclaim, right of setoff or otherwise, that the disputing investor has received or will receive, pursuant to an insurance or guarantee contract, indemnification or other compensation for all or part of its alleged damages.'54 Other BITs may state that a contracting party cannot 'raise as an objection' that the investor has received indemnity for its losses,55 or that such payment shall not affect the right of the investor in a proceeding.

VIII Conclusion

PRI policies and BITs provide separate regimes for protecting investors' investments from wrongful government conduct. Investors attracted to the contractual protection of an insurance contract and its other benefits would prefer to obtain compensation under its policy, for which it paid a premium, over the costly and difficult process of claiming against a host state in investment arbitration. However, the insurer will likely want to recover compensation paid. The insurer's right to commence investment arbitration against a host state will depend on an insurance contract clause providing for subrogation, an applicable BIT clause recognising the subrogation and having standing in a particular forum, each of which involves limitations and difficulties. The insurer could instead request the investor to institute a claim and make arrangements for assignment, or for the proceeds to be passed to the insurer. If investment arbitration against the host state is an option, through whichever avenue, the insurer will need to evaluate the claim's chance of success under international law – the government wrongdoing must constitute a breach of a treaty. The possible differences between the substantive protections under an insurance policy and a BIT mean that not every risk insured will attract the same protection under a treaty, and government misconduct that leads to a successful claim under the contract may not give rise to a breach of a treaty obligation, as each jurisdiction applies its own system of legal principles to claims assessments.

Different insurers have different agendas when setting their insurance and coverage policies, and different insurers may invoke and be influenced by public international law principles and jurisprudence in different ways. Though insurers have rarely sought treaty arbitration, with increasing use of PRI (e.g., by Chinese investors investing in infrastructure projects in politically unstable economies) insurers may be more likely to confront situations involving huge claims where investment arbitration would be a worthy pursuit. It will be interesting to see how developments in international law, treaty arbitration and the global foreign investment environment may affect insurance policies and the PRI industry in the future.


1 Huawei Sun is a partner and Chang Liu is an associate at Zhong Lun Law Firm.

2 Glossary of Terms Used in the Political Risk Insurance Industry, available at:

3 MIGA, World Investment Political Risk 2013, page 18.

4 ibid., page 42.

5 ibid., page 32.

6 Paul Heaney, '2017 Year End Data in Review', The Bulletin on international trade, finance and investment from the export credit and political risk insurance industry, pages 4, 7–8.

7 MIGA, 'A Message from the President', 2018 Annual Report, page 6.

8 'Top 10 Events in China Insurance Industry of 2011', available at:

9 See, generally, the arbitral awards published on the OPIC website

10 See, e.g., Article 15.2 of the MIGA Contract of Guarantee for Equity Investments (2018-Forms), October 2018; and Article 14.2 of the MIGA Contract of Guarantee for Shareholder Loans (2016-Forms), November 2016.

11 See, e.g., Saudi Arabia v. Arabian American Oil Company (ARAMCO), (1963) 27 I.L.R. 117; Texaco Overseas Petroleum Company and California Asiatic Oil Company v. the Government of the Libyan Arab Republic, (1975, 1977) 53 I.L.R. 389, 422.

12 See, e.g., Revere Copper and Brass, Inc. v. OPIC, reprinted in 17 I.L.M 1321 (1978).

13 See, e.g., Société Générale In respect of DR Energy Holdings Limited and Empresa Distribuidora de Electricidad del Este SA v. The Dominican Republic, UNCITRAL, LCIA Case No. UN 7927, Award on Preliminary Objections to Jurisdiction, 19 September 2008, paragraph 64; Alpha Projectholding GMBH v. Ukraine, ICSID Case No. ARB/07/16, Award, 8 November 2010, paragraph 408.

14 See, e.g., Article 4.1(a) of the MIGA Contract of Guarantee for Equity Investments (2018-Forms), October 2018.

15 See, e.g., Article 4.1(b) of the MIGA Contract of Guarantee for Equity Investments (2018-Forms), October 2018.

16 See, e.g., Article 4.1(b) to (d) of the MIGA Contract of Guarantee for Shareholder Loans (2016-Forms), November 2016.

17 Based on our review of Sinosure's sample terms, which are not publicly available.

18 See, e.g., Articles 4.1 and 2 of the MIGA Contract of Guarantee for Equity Investments (2018-Forms), October 2018.

19 Memorandum of Determination – Expropriation Claim of Global Forestry Management Group (Russia), OPIC Contract of Insurance No. F339, OPIC, 14 April 2011.

20 ibid., page 5.

21 ibid., page 6.

22 See, e.g., Article 11.1 of the MIGA Contract of Guarantee for Equity Investments (2018-Forms), October 2018.

23 Article 14 of the Netherlands Model Investment Agreement 2018, 19 October 2018.

24 Chester Brown (ed.), Commentaries on Selected Model Investment Treaties, Oxford University Press, 2013, page 580.

25 Article 22.1 of the Norway Model BIT 2015, draft version, 13 May 2015.

26 Article 7 of the Netherlands–Mexico BIT, signed on 13 May 1998 and effective from 1 October 1999.

27 Article 148.2 of the China–New Zealand FTA, signed on 7 April 2008 and effective from 1 October 2008.

28 Article 12.11.2 of the China-Korea FTA, signed on 1 June 2015 and effective from 20 December 2015.

29 Article 9.2 of the China–Mexico BIT, signed on 11 July 2008 and effective from 6 June 2009.

30 Convention on the Settlement of Investment Disputes between States and Nationals of Other States (the ICSID Convention).

31 Christoph Schreuer et al, The ICSID Convention: A Commentary (second edition) 2009, Cambridge University Press, page 187.

32 Ceskoslovenska Obchodni Banka, A.S. v. The Slovak Republic, ICSID Case No. ARB/97/4, Decision of the Tribunal on Objections to Jurisdiction, 24 May 1999, paragraph 17.

33 Above, 31, page 188.

34 ibid.

35 Above, 32, paragraph 18.

36 See the UNCITRAL Arbitration Rules 2013.

37 Article 22 'Subrogation' and Annex C 'Disputes between a Contracting Party and An Insurer in Accordance with Article [Subrogation] of This Agreement' of the Norway Model BIT 2015, draft version, 13 May 2015.

38 22 USC 2197(a).

39 22 USC 2197(b).

40 Article 6, Investment Incentive Agreement between the Government of the United States of America and the Government of India, signed on 19 November 1997 and entered into force on 16 April 1998, available at:

41 Request for Arbitration Under the Investment Incentive Agreement between the Government of the United States of America and the Government of India, 4 November 2004, paragraph 41(a).

42 Article 2(a) of the Convention Establishing the Multilateral Investment Guarantee Agency (the MIGA Convention), amended and effective 14 November 2010.

43 Article 18 of the MIGA Convention.

44 Articles 15 and 38(b) of the MIGA Convention.

45 Article 57(b) of the MIGA Convention and Article 2 of Annex II thereto.

46 Articles 4(a) and (e) of Annex II to the MIGA Convention.

47 ICSID, News from ICSID, Volume 7, No. 2, Summer 1990, page 5.

48 Above, 32, paragraph 31.

49 Articles 11.3 and 11.4 of the MIGA Contract of Guarantee for Equity Investments (2018-Forms), October 2018.

50 Hochtief AG v. Argentine Republic, ICSID Case No. ARB/07/31, Decision on Liability, 29 December 2014, paragraph 309.

51 ibid.

52 Glencore Finance (Bermuda) Limited v. Plurinational State of Bolivia, PCA Case No. 2016-39, Bolivia's Preliminary Objections, Statement of Defence, and Reply on Bifurcation, 18 December 2017, paragraph 960.

53 'ICSID claimant sues political risk insurer', available at:

54 Article 13(2) of the China–Canada BIT, signed on 9 September 2012 and effective from 1 October 2014.

55 Article 8(1) of the Paraguay–UK BIT, signed on 4 June 1981 and effective from 23 April 1992.