The Peoples Republic of China has exhibited an ever-increasing economic prowess in recent years. The strong growth of the Chinese economy has brought with it a concomitant growth in foreign investment in China. For those contemplating investment in China an important consideration is the effectiveness of protections of such investment against unreasonable and discriminatory treatment by governmental authorities. A significant source of this type of protection comes from so-called the  Bilateral Investment Treaty (‘'BIT'') between China and the investor's country. While 123 countries have concluded a BIT with China, every BIT is not the same. The effectiveness of the substantive protections in a BIT can depend to a large degree on the procedural requirements imposed on an investor wishing to make a claim against the Chinese state. While the Sino-Netherlands BIT is recognized as affording Dutch investors the most relaxed international dispute resolution procedure of any BIT, investors from other countries often do not realize that a ‘'most favoured nation'' clause in their country's BIT may allow them to benefit from the Sino-Netherlands international dispute settlement procedures.

Historically China has been unwilling to accept two provisions commonly found in modern BIT's, namely a guarantee to treat foreign investors no less favourably than Chinese investors and direct access to international arbitration tribunals for dispute resolution. The Sino-Netherlands BIT constitutes a breakthrough in both of these areas. In its article 3, both countries undertake to accord investors of the other ‘'treatment no less favourable than that accorded to investments and activities by its own investors or investors of any third state.'' Equally significant, article 10 of the treaty allows a Dutch investor to avoid the domestic Chinese courts in the event it wishes to assert a claim for actions of state officials in violation of the treaty protections. The investor may submit the dispute to arbitration before a tribunal of the International Centre for Dispute Resolution (‘'ICSID'') under the Convention on Settlement of Disputes between states and nationals of other states or alternatively before an ad hoc UNCITRAL arbitral tribunal.

Over the past two decades, ICSID arbitration tribunals and ad hoc UNCITRAL arbitration tribunals have grown in popularity among international investors and have generated a meaningful body of case law in the area of investor - state rights. One such case has accepted a rather broad interpretation of the operation of a most-favoured nation (‘'MFN'') clause, which suggests that the Sino-Netherlands international arbitration provisions may be open to investors from other countries. Alternatively, such third country investors may likewise seek to invoke similar ‘'modern'' dispute resolution procedures of the BIT China subsequently concluded with Germany.

The Maffezini v. Spain arbitration was the first case to directly determine whether an MFN clause in a BIT allows a claimant investor to obtain the benefit of more favourable dispute resolution procedures included in a treaty between the host country and a third country. The ICSID tribunal in that case resolved that issue affirmatively. That the substantive protections of a third country's BIT could be so invoked through a MFN provision was already well established. Maffezini extended the operation of a MFN provision to more favourable procedural protections as well.

It must be noted that it is not certain that every ICSID or other international investment arbitration tribunal will follow the Maffezini precedent. Indeed, a subsequent ICSID tribunal in the Plama Consortium v. Bulgaria case ruled the other way. It decided that the MFN clause in question was to be interpreted restrictively with respect to dispute resolution procedures.