Beijing Everyway Traffic and Lighting Company Limited v. Ghana, PCA 2021-15
PCA · Investment (ICSID and treaty) · Ghana · 30 Jan 2023
Why it matters
This award is significant for its strict interpretation of the scope of investor-state arbitration under the China-Ghana BIT. The Tribunal clarified that an MFN clause cannot be used to expand the categories of disputes subject to arbitration beyond those expressly consented to by the state parties. It distinguished between using MFN to remove procedural impediments (as in Maffezini) and using it to establish consent for entirely new dispute categories. The decision reinforces the principle that state consent to arbitration must be clear and cannot be implied through MFN clauses.
Summary
Beijing Everyway, a Chinese company, entered into an EPIC contract with Ghana's Ministry of Roads and Highways for a traffic management project in Accra worth US$100 million. After the contract was rescinded by Ghana's Parliament in November 2020, Everyway initiated two arbitrations: one under the LCIA Rules based on the contract, and another under the China-Ghana BIT (the Treaty) seeking over US$55 million for expropriation, breach of fair and equitable treatment, and violation of the umbrella clause. Ghana objected to jurisdiction, arguing that Article 10(1) of the Treaty only allows arbitration for disputes concerning the amount of compensation for expropriation, not the entitlement to compensation or other treaty breaches. Everyway countered that the MFN clause in Article 3(2) allowed it to import broader arbitration clauses from Ghana's other BITs. The Tribunal, applying the Vienna Convention on the Law of Treaties, held that Article 10(1) is clear and limited: it only covers disputes about the quantum of expropriation compensation, not the fact of expropriation or other claims. The Tribunal also rejected the MFN argument, finding that an MFN clause cannot create consent to arbitrate where none exists; it only applies to substantive treatment, not procedural or jurisdictional matters. The Tribunal noted that the Treaty's primary dispute resolution mechanism is state-to-state arbitration under Article 9. Accordingly, the Tribunal upheld Ghana's objections and declined jurisdiction over all claims. The award on costs was reserved for later determination.
The detail
Parties: Beijing Everyway Traffic and Lighting Company Limited v. Ghana, PCA 2021-15
Case number: italaw/cases/10145
Outcome: The Tribunal upheld Ghana's objections to jurisdiction and found it had no jurisdiction to decide the claims.
Applicable law: China-Ghana BIT (1989), 2013 UNCITRAL Arbitration Rules, laws of Ghana, generally recognised principles of international law
Issues in play: The dispute involved the interpretation of Article 10(1) of the BIT, which limits investor-state arbitration to disputes concerning the amount of compensation for expropriation, and Article 3(2) (MFN clause), which the Claimant argued could extend jurisdiction to other treaty claims. The Tribunal held that the MFN clause could not create consent to arbitrate categories of disputes not covered by the BIT.
Read the full decision at italaw ↗
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